Bitcoin Q&A: Bitmain and the ASICBoost allegations

hi you mentioned a sick boost so I thought I would bring that up what do you think about the allegations against a bit mein and Johan Ruhe and if true what implications will that have if any on the breaking the impasse between core and Bitcoin unlimited I don’t know if the allegations are true however we do know that bit mains mining chips have onboard FPGAs and multi-core CPUs that would be the necessary thing to put on a chip in order to do ASIC boost their CEO said that they put the chips on their ASIC board in order to do basic boosts but then didn’t do it for the good of the network and so they spent all of this money putting these chips on the only purpose of these chips would be to do ASIC boost but they only did ASIC boost on test net and have never done it on main net so you can believe that or you can’t right it depends on your perspective but if you do believe it I have a simple answer to that which is well in that case if you didn’t use it and you won’t use it then you don’t mind if the entire network disables it because no matter who uses it it creates a tremendous impediments to protocol enhancements by making the header itself immutable in its architecture we can no longer add modifications to the header because any modification to the header will be resisted by anyone who’s running covert ASIC boosts because it will reduce their profitability so at that point that’s a threat to the network it doesn’t matter if the motives of running it are simply profit driven and that’s fine that’s the free market you should do optimizations it’s not an attack it’s an optimization great so what we’re going to do to fix it is not a counter attack it’s a counter optimization and since nobody’s using it it’s okay right right right there’s not a hundred million dollars on the table here nobody’s using it it’s okay turn it off you’re not using it turn it off because it is sitting there and it’s a time bomb if nobody is using it right now somebody starts using it in six months they’re going to derail protocol development for exactly the reasons that we suspect or some people suspect that protocol development might be derailed and so I would say turn it off and that way everybody’s happy you can still do over Tasek boost by using the front part of the header in fact there are some proposals to make it more efficient anyone can run that some people object this idea by saying but the free market is optimizing the chips and the free market includes you and I and all of the protocol developer is saying we don’t want that optimization so that’s also part of the free market and in another way you’ve got to think about it’s not really a free market it’s a free market secured by a patent that provides an exclusive economic right over an invention backed by the threat of state force that’s not a free market right a patent is a monopoly by definition that’s what a patent does it secures the exclusive right to the patent owner to use the technology and not let anybody else use it under threat of state force therefore not a free market so if it’s not being used we should turn it off if it is being used we should turn it off and I don’t know if that’s going to change the debate it might not change the debate at all because at this point the debate is not just about profits and technology is also about bruised egos and hurt feelings and you called me this name and I called you that name and six months ago you said and all of that it’s a bit like a divorce right you have this couple in there now six months into the divorce and they’ve spent a quarter of a million dollars fighting over who gets custody of mumu the mini dog right and anybody who’s met MooMoo says why why do you who wants to know take that little dog away from me nobody really wants the dog it’s not about the dog it’s about someone’s feelings have been hurt and they want to spend quarter of a million dollars hurting the other person’s feelings in revenge right and if you focus on trying to think okay how about we get you both cats like you know these are the compromise proposals we see coming out of the Bitcoin community how about we get you both cats I wanted a dog you promised me that I could have MooMoo three years ago here’s the email right and it’s not about the dog and you can’t fix it with a compromise because there’s hurt feelings so this is the problem with a lot of the scaling debate and especially ASIC boost because now we have another ingredient and that ingredient is the possibility of completely undetectable covert action that confers an advantage by the way how many of you have heard of all of this okay great so quite a few people do you understand what it means to have a 20% advantage in energy consumption so first of all most data centers that run mining are not constrained by how many mining rakes they can buy or rack they’re constrained by how much power they can feed into the building that’s always the constraint and as soon as they have more power they can easily buy all of the chips and rack them etcetera and immediately get to a hundred percent of all of the power it’s it’s the gating factor the limiting factor is always the electricity that’s going in if you reduce consumption by 20 percent that means you can install 20 percent more miners which means 20 percent more hashing power but it gets better that doesn’t mean a 20 percent increase in profits oh no because profit margins are less than 1% what happens when your profit margins are less than 1% you spend a million dollars on electricity right so you spend sorry you get a million dollars in rewards from mining and you spend 909 $2,000 on electricity and you make a $10,000 profit if you reduce the cost of electricity by 20% you are in a million dollars in mining and now you spend seven hundred and fifty thousand dollars on electricity and your profit just went from ten thousand to a hundred and ninety thousand a factor of 19 or 20 this is a huge advantage this is an enormous advantage and if ASIC boost is really happening it will allow one miner which one the one that has the monopoly control over the technology backed by the state source to completely dominate the market and knock all of their competitors out of business that is unacceptable if you’re going to do it do it with the overt version everyone can see you’re doing it and adjust their business plan accordingly the covert version damages the market it damages the protocol development and since nobody’s using it let’s turn it off that’s what I think about AC boos thank you [Music] you you

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