diff --git a/ch10.asciidoc b/ch10.asciidoc index aa8d32bb..da3a5e9d 100644 --- a/ch10.asciidoc +++ b/ch10.asciidoc @@ -1798,45 +1798,18 @@ smaller share of the overall reward, but typically get rewarded every day, reducing uncertainty. Let's look at a specific example. Assume a miner has purchased mining -hardware with a combined hashing rate of 14,000 gigahashes per second -(GH/s), or 14 TH/s. In 2017 this equipment costs approximately $2,500 -USD. The hardware consumes 1375 watts (1.3 kW) of electricity when -running, 33 kW-hours a day, at a cost of $1 to $2 per day at very low -electricity rates. At current bitcoin difficulty, the miner will be able -to solo mine a block approximately once every 4 years. How do we work -out that probability? It is based on a network-wide hashing rate of 3 -EH/sec (in 2017), and the miner's rate of 14 TH/sec: - -++++ - -++++ - -...where 21240 is the number of blocks in four years. The miner has a -98% probability of finding a block over four years, based on the global -hash rate at the beginning of the period. - -If the miner does find a single block in that timeframe, the payout of -12.5 bitcoin, at approximately $1,000 per bitcoin, will result in a -single payout of $12,500, which will produce a net profit of about -$7,000. However, the chance of finding a block in a 4-year period -depends on the miner's luck. He might find two blocks in 4 years and -make a very large profit. Or he might not find a block for 5 years and -suffer a bigger financial loss. Even worse, the difficulty of the -bitcoin Proof-of-Work algorithm is likely to go up significantly over -that period, at the current rate of growth of hashing power, meaning the -miner has, at most, one year to break even before the hardware is -effectively obsolete and must be replaced by more powerful mining -hardware. If this miner participates in a mining pool, instead of -waiting for a once-in-four-years $12,500 windfall, he will be able to -earn approximately $50 to $60 per week. The regular payouts from a -mining pool will help him amortize the cost of hardware and electricity -over time without taking an enormous risk. The hardware will still be -obsolete in one or two years and the risk is still high, but the revenue -is at least regular and reliable over that period. Financially this only -makes sense at very low electricity cost (less than 1 cent per kW-hour) -and only at very large scale. +hardware with a combined hashing rate of 0.0001% of current the total +network hash rate. If the protocol difficulty never changes, that miner +will find a new block approximately once every 20 years. That's a +potentially long time to wait to get paid. However, if that miner works +together in a mining pool with other miners whose aggregate hash rate is +1% of the total network hash rate, they'll average more than one block +per day. That miner will only receive their portion of the rewards +(minus any fees charged by the pool), so they'll only receive a small +amount per day. If they mined every day for 20 years, they'd earn the +same amount (not counting pool fees) as if they found an average block +on their own. The only fundamental difference is the frequency of the +payments they receive. Mining pools coordinate many hundreds or thousands of miners, over specialized pool-mining protocols. The individual miners configure their