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ASICMINER’s Threat to Bitcoin’s Model

All your Bitcoins are belong to us:

How much of an impact on the difficulty of Bitcoin mining such super miners will have is difficult to say. The Bitcoin algorithm adjusts the difficulty every 2016 blocks to keep the rate at about 10 minutes to solve a block. It the hardware improves then the difficulty goes up to keep the rate constant. So introducing super hash farms, such as this one, will make the problem harder and make it increasingly difficult for less well equipped miners to succeed.

The article points out that if ASICMINER ends up with most of the remaining bitcoins, it would end up defeating Bitcoins’s decentralized model, allowing ASIC to act as a Bitcoin Central Bank. ┬áThis may screw Bitcoin, but it doesn’t obviate the interest in some independent store of value.

Posted in SciTech.