RESEARCH: Bitcoin Halving 2020 the 'Arms Race' for Miner Efficiency Intensifies
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 25 April 2020
⏱️ 39 minutes
🧾️ Download transcript
Summary
In this episode of the Bitcoin Halving 2020: Miner Perspective podcast series, we take a trip down memory lane back to the early days of bitcoin when miners first began competing for network rewards.
“I think the introduction of [Application Specific Integrated Circuits] was a watershed moment in terms of changing the way bitcoin was mined and secured,” said Galen Moore, senior research analyst for CoinDesk. “If you know that a more powerful machine will get you more reward, make your business more profitable, you’ll be looking for the next more powerful machine all the time knowing that your competitors are doing the same.”
Dave Carlson who participated as a bitcoin miner in the arms race for more advanced cryptocurrency mining machinery back in 2012 and 2013 admitted that at the time “the Chinese engineering firms and Chinese producers of this technology far surpassed our ability and speed to get something to market.”
However, there was a turning point in 2015 and 2016 when mining operations in China started to subside and coalesce in other regions parts of the world such as North America. More efficient power production, Carlson said, was the primary motivation for this shift.
In lead-up to the next bitcoin halving event in May, some bitcoin miners are looking at leveraging what Moore and Carlson describe as “surplus energy” to make operations even more cost-effective. Surplus energy is the run-off or waste fuel released by natural gas and hydro power plants that can be repurposed to mine bitcoin for zero cost. This could be a major technological breakthrough for mining if proven to work at a large scale, Carlson said.
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Transcript
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| 0:00.0 | Mining is kind of the slow and steady wins the race approach. |
| 0:05.0 | There's a misconception that the miners have huge amounts of Bitcoin. |
| 0:09.0 | And it's not true because the miners are producing it slow and steady over time. |
| 0:15.0 | Their reward for doing that is the cost of production is way, way low. |
| 0:20.0 | If you've set up your operation correctly, |
| 0:22.8 | your cost of producing a Bitcoin is orders of magnitude less than the retail price on the |
| 0:29.5 | market. Hello, everyone. Welcome to the fourth episode of CoinDesk's Bitcoin-Having 2020 podcast series. |
| 0:40.0 | On this episode, I'm joined by Dave Carlson, the co-founder and CEO of FPGA mining startup |
| 0:46.4 | altered Silicon. Since 2012, Dave has run megawatt-scale cryptocurrency mining operations |
| 0:53.0 | in North America and has consulted for other |
| 0:55.8 | large-scale mining projects. Also joining us on this episode is Galen Moore, senior research |
| 1:01.6 | analyst at CoinDesk. Gaylon helped write the CoinDesk Research Explainer Report on the Bitcoin |
| 1:06.8 | halving and has been doing additional research on the use of surplus energy in Bitcoin |
| 1:11.8 | mining. |
| 1:12.8 | It's great to have you too on the show. |
| 1:14.9 | How have you guys been holding up so far in this time of social distancing? |
| 1:18.9 | Dave? |
| 1:19.9 | Pretty much staying close to home and away from people, but that's my normal lifestyle |
| 1:25.4 | anyway. |
| 1:26.4 | So not too much of a change there. |
| 1:29.3 | It really hasn't been that much of a change. |
| 1:32.3 | Well, that's good. |
... |
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