[ExI] Sell your Bitcoins!

[Jason Resch]

On Thu, May 21, 2026, 7:48 AM John Clark <johnkclark at gmail.com> wrote:

> On Wed, May 20, 2026 at 9:37 AM Jason Resch via extropy-chat <
> extropy-chat at lists.extropy.org> wrote:
>
>
>
>> *> It's already fallen over 93% to 3.125 bitcoins per block, from it's
>> initial 50. That has accordingly made Bitcoin use 93% less electricity than
>> miners would otherwise be spending on it.*
>>
>
> *Your logic is correct but your conclusion is incorrect because
> you're starting with a faulty premise. The dollar value of the block reward
> is what matters to miners, NOT the bitcoin quantity.*
>

The value of (and therefore the maximum energy cost miners will rationally
expend in)  mining a block is: (Bitcoin price times the number of Bitcoina
in the block reward) + transaction fees.

If the number of Bitcoins in the block reward were still 50 rather than
3.125, the value of mining a block would be mucher higher than it is today
it is today and therefore Bitcoin's energy demand would also be greater.

Since Bitcoin's price can't continue to double every four years for the
next 106 years, it's total energy cost will decrease in the future.

* In 2012 the block reward was 50 bitcoins which were in total worth about
> $650, by 2016  25 bitcoins were worth about $16,000, and today just 3.125
> bitcoins are worth well over a quarter of a million dollars.  That's why in
> the early days bitcoin could be mined on an ordinary laptop using a trivial
> amount of electricity, but today bitcoin miners must use more electricity
> than many medium-size countries.*
>

For how long do you think Bitcoin's price will outpace the halvings of the
block reward?


>
> *>>  the cost of a 51% attack is proportional to the hash rate and that
>>> is proportional to how profitable mining is. So as block subsidies decline
>>> mining becomes less profitable and that causes the hash rate to drop and
>>> that causes the cost of a 51% attack to become economically viable and that
>>> causes one individual to be able to engage in double spending and that
>>> causes the complete destruction of any trust the general public had in
>>> bitcoin. *
>>>
>>
>> *> A 51% attack isn't very profitable. It allows one person to
>> temporarily double spend their own bitcoins that they already have, and
>> that is for someone who only waits 10 minutes to confirm a transaction, for
>> every additional 10 minutes they wait it becomes twice as difficult to
>> perform that attack.*
>>
>
> *10 minutes is a long time, more than enough time to do something that
> would be VERY profitable. A 51% attacker would have at least 10 minutes to
> deposit $500 million in bitcoins to an exchange, use that to buy $500
> million in gold, and then reverse the transaction, so he would end up with
> $500 million in gold AND still retain ALL the original $500 million of
> bitcoins.*
>


I was wrong about what I said above about waiting additional 10 minutes for
further confirmations. This only provides additional protection against
attackers with strictly less than the majority of mining resources. An
attacker with the majority of resources could rewrite the chain anytime
after they attain and maintain the majority of hash power. But they would
be limited in how many changes they could make.

The only guard against this is that it remain more profitable for the miner
to collect block rewards and transaction fees than it would be to conduct
fraud with the coins at their disposal.

*And that would just be the sideshow, the attacker could also short bitcoin
> just before the attack and make more money from the ensuing bitcoin price
> collapse than from the double spending. *
>

To get 51% of mining resources today would require about $20 billion in
mining equipment if I've done my math correctly. Why hasn't anyone done it
yet if they could make so much more by collapsing Bitcoin?


> *And in the real world he would almost certainly have longer than 10
> minutes because for large transactions most exchanges require at least
> three confirmations which would mean about 30 minutes. Satoshi's original
> whitepaper recommended 6 confirmations, but paradoxically more
> confirmations help the attacker because it gives him more time.*
>

Waiting longer helps when attackers have less than a majority of the hash
power, because to reverse six transactions back requires you to find 7 new
blocks in the time it takes the rest of the network to find 6.

If you only had 20% of the network's hash power, the chances of this would
be ~(20%)^7


>
> *> It is true that rhodium is rarer and more expensive than gold per
>> ounce, but that's irrelevant to my point. Consider that currently gold is
>> more valuable than platinum (which is significantly rarer). Can you explain
>> why that is?*
>>
>
> *Easy. Compared to gold the supply of platinum is greater than the demand
> for platinum, and the supply of rhodium is less than the demand
> for rhodium.*
>

It follows then, that if the demand for gold were less (e.g. people had no
interest in hoarding it in vaults) it's value would fall. Do you agree?

Jason

>
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