Bruce,Hi Bud!
It seems like China has a lot of their own, locally developed, businesses: their own versions of Facebook, YouTube, Amazon etc.
Can US or EU Bitcoin startups have a successful presence in China or is it too hard? Would they be better off focusing on partnerships, jvs, early expansion, branches or simply hiring people in China and moving forward?
What other advice do you have for entrepreneurs who want to tap into the massive Chinese market?
Thanks for all you do!
Bruce
Thanks for the question. I get this one alot, and in fact I did a talk about it at Scaling Bitcoin Montreal. About the 1hr 53min markHello Marshall,
With the halving coming up soonish, how are your mining companies returns going to be affected and at what point will Bitcoin have to be a particular price for your business models?
Thanks,
CFO
Tim,HI Marshall,
You have an interesting story. What does a typical mining operation look like?
How do miners decide which transactions they mine? Should any of the incentives be split up between the nodes so they are compensated for the network?
Can miners choose to "vote" which version of the Bitcoin code that they operate to use?
Thanks for all the clarity on this.
My ThoughtsHello Marshall,
What are your thoughts on block size debate. Favorite BIP on block size increase?
So in general, we do not ever feel like tx fees can be helpful to us. Right now and going forward they will be and continue to be nominal at best as the ETHOS of Bitcoin seems to be "It's Free" and that is not likely to change, nor should it.given miner's need to transition to tx fee income as block rewards subside, how do you plan to compete with LN siphoning tx fees offchain?
do you think merge mining of sidechains is a viable exercise given how OneName had to abandon Namecoin b/c of the 60% hashing share of f2pool?
how practical is it for miners to have to keep up with the necessary coding complexity of maintaining multiple sidechain mining software implementations?
That's scary to read coming from a supposedly big miner. :SWe do not see fees as ever becoming a real way to drive revenue simply because the mentality of Bitcoin is, "It's Free!".
Good questions and welcome to the forum. Seems like you are new here. Hope you like what Roger is trying to do.Firstly, transacting is already cost money. Secondly, It's in the original whitepaper that fees will compensate for the diminishing block reward in the future. It was satoshi's original vision.We do not see fees as ever becoming a real way to drive revenue simply because the mentality of Bitcoin is, "It's Free!".
It's not about making the network expensive, but gathering a big userbase so the small fees add up.
If not enough people use btc in the future to compensate, then it's basically a failure anyways, and the price won't go up enough to make any business like this profitable in this scenario.
I wonder what do you think about this.
there was a great post on reddit the other day by a guy named "singularityxxx" who calculated how easily a larger volume of tx's per block due to larger blocks would fund current miners. you should look at the numerous calculations that have been done confirming this hypothesis of satoshi's.So in general, we do not ever feel like tx fees can be helpful to us. Right now and going forward they will be and continue to be nominal at best as the ETHOS of Bitcoin seems to be "It's Free" and that is not likely to change, nor should it.given miner's need to transition to tx fee income as block rewards subside, how do you plan to compete with LN siphoning tx fees offchain?
do you think merge mining of sidechains is a viable exercise given how OneName had to abandon Namecoin b/c of the 60% hashing share of f2pool?
how practical is it for miners to have to keep up with the necessary coding complexity of maintaining multiple sidechain mining software implementations?
Regarding OneName, their assessment of the NMC hashing dis-proportionality IMHO was completely and utterly wrong. Many of my colleagues and even my own operation, and some of the other pools are constantly mining NMC. What they should have done was reach out to the miners and confirm their suspicions. NETKI did this and saved an inordinate amount of time and money doing so.
However, I digress. Merge mining is ALWAYS an interesting thing for us to look at because it is effectively an additionally revenue stream potentially for us. The only way we don't merge mine is if the code base is weak and requires constant maintenance and makes our operation unstable. In mining, you get one chance to WOW us as it were because sloppy implementations cost us money on both labor and down time.
Those calculations do not adequately reflect propagation issues in mainland...there was a great post on reddit the other day by a guy named "singularityxxx" who calculated how easily a larger volume of tx's per block due to larger blocks would fund current miners. you should look at the numerous calculations that have been done confirming this hypothesis of satoshi's.
So in general, we do not ever feel like tx fees can be helpful to us. Right now and going forward they will be and continue to be nominal at best as the ETHOS of Bitcoin seems to be "It's Free" and that is not likely to change, nor should it.
Regarding OneName, their assessment of the NMC hashing dis-proportionality IMHO was completely and utterly wrong. Many of my colleagues and even my own operation, and some of the other pools are constantly mining NMC. What they should have done was reach out to the miners and confirm their suspicions. NETKI did this and saved an inordinate amount of time and money doing so.
However, I digress. Merge mining is ALWAYS an interesting thing for us to look at because it is effectively an additionally revenue stream potentially for us. The only way we don't merge mine is if the code base is weak and requires constant maintenance and makes our operation unstable. In mining, you get one chance to WOW us as it were because sloppy implementations cost us money on both labor and down time.
Great question. Was just talking about this last night actually.Just wondering which people in the Bitcoin eco-system you tend to stay in contact with. Do you communicate much with the founders of various Bitcoin exchanges, for example, or with the CEOs of companies like Coinbase or Circle? Have you talked to Gavin Andresen on the phone? (I've listed a tiny slice of people, my question is more general... who do you tend to keep in touch with in the ecosystem)
Hey there,Hi Marshall, thanks for being here,
We know China weighs big in mining. Would it be a plausible scenario that Chinese gov takes control of all mines in China and then be able to break the trust in Bitcoin system by getting the majority of its hashpower?
What do you think about centralization of mining?
Mining is addictive. Do you think we should see psychologists for that?
Kex
Marshall, general question. How will the upcoming halving of the block reward to 12.5 in 2016 affect the mining industry? With smaller reward & presumably lower margins, will we see even more centralization of mining? Will the Bitcoin price pop as the increase to supply of Bitcoin will slow down due to smaller block reward?
The only thing that needs to propagate across the GFW or within the mainland is the block header (e.g. via stratum). That's about 80 bytes, independent of block size. Have you thought of setting up your full node/poolserver in e.g. Hong Kong and using a stratum proxy in your farm?Those calculations do not adequately reflect propagation issues in mainland...there was a great post on reddit the other day by a guy named "singularityxxx" who calculated how easily a larger volume of tx's per block due to larger blocks would fund current miners. you should look at the numerous calculations that have been done confirming this hypothesis of satoshi's.
Very well thought out questions.Thanks for doing the AMA! Two questions:
1. You mentioned the very high latency being a problem for Chinese miners - especially since as it's implemented right now, a block needs to "race" in its entirety from its originating node. However, Bitcoin XT is currently working on implementing IBLT, which enables propagating hashes instead of the full block to compatible nodes, eliminating the need to propagate the full block to nodes that already has relevant tx in their mempools. If the patch comes out, it will obviously benefit low-bandwidth countries like China by a lot - do you see yourself switching to XT (or XT pools) in that scenario? Or would you stick with Core without IBLT propagation for the sake of continuity?
2. As far as I understand Bitcoin in China, as of right now, is mostly mining and speculation, while having very little in terms of economic activity (i.e. buying/selling goods and services, whether legally or illegally). Do you see that changing anytime soon? Does the Chinese community has any advocates of building a Bitcoin economy?
Sorry but that's BS.1. We as miners would never switch the XT. All biases aside, switching our pool servers over would be a massive waste of money.
Neither of those are p2p payments. All of them involve banks and companies.3. BTC is not huge in China. Simply because they have great ways to make P2P payments already IMHO. Alipay, WeXIN Pay, etc.
My best guess is that he's referring to the propagation expense of dealing with >= 8 MB blocks. It seems he thinks that orphan rates and bandwidth expense would grow faster than revenue would with fees. Marshall, is this the case? Are you worried about downstream bandwidth or upstream bandwidth?Sorry but that's BS.1. We as miners would never switch the XT. All biases aside, switching our pool servers over would be a massive waste of money.
XT is a fork of bitcoin core, There is basically 0 difference whether the fork happen or not.
The downtime would be basically non-existent if the migration is planned and executed right, so I'm curious what "waste of money" you are referring to?
XT won't make blocks magically 8MB straightaway....it raises a limit.My best guess is that he's referring to the propagation expense of dealing with >= 8 MB blocks. It seems he thinks that orphan rates and bandwidth expense would grow faster than revenue would with fees. Marshall, is this the case? Are you worried about downstream bandwidth or upstream bandwidth?
Sorry but that's BS.
XT is a fork of bitcoin core, There is basically 0 difference whether the fork happen or not.
The downtime would be basically non-existent if the migration is planned and executed right, so I'm curious what "waste of money" you are referring to?
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