Sorry for the late response, I read it at your suggestion, I think all these points are argued against by shinobi in his recent episode with stephen livera.
The article presupposes that sidechain blocks will be built by proposers, rather than miners. The miners have an economic advantage in creating sidechain blocks because they are already bringing the hashpower, so they dont need to pay what the proposer would to get that block approved, winning a higher profit, so I would expect that the sidechain block production will be dominated by mining pools. Pools that have better tools to exract value from mining sidechains will dominate the mining industry, and make it unprofitable to mine without sidechain mining, let alone mining for anybody but the top pools.
The miners have an enhanced ability to reorg the sidechain too, and proposers lose their spent bitcoin in that case, but miners never needed to pay to create sidechain blocks because they mine it themselves.
You could say, as this article does, that every miner is engaged in finding these side hustles that effect the profitability of mining for everyone. Its not a *good* thing that mining companies are finding economies of scale or side gigs that screw with the economics of bitcoin, it causes miner centralization. We shouldnt look at that and step on the gas pedal, like "ah fuck it, lets just go full send because load shedding is a thing".
Further, these side hustles or tricks like having newer miners all revolve around having more hashing for less electricity. MEV presents a novel price incentive to mining that cant be compared to load shredding or mining on curtailed energy, because those grid issues are everywhere. Mining on ercot has been lucrative for iris, but eventually the texas grid will evolve to not need the miners and the incentives will evaporate, replaced by incentives posed by other grids like microgrids in africa.
When these discussions picked up the line was that it doesnt pose a risk, it seems clear that it does pose a risk. Maybe you consider the risk worth it, but I don't; it adds too many unknowns to the incentives around mining, the lack of clear explanation of why miners wouldnt create the sidechain blocks is the most obvious issue I see.
/ Geist
npub1u3…g0nsw
2023-10-05 10:55:11
in reply to nevent1q…et74
Author Public Key
npub1u3ud495fjw9xf0lfjezu4l2rvkccn58dyr9w9e8f4jkr3xz590nqtg0nswPublished at
2023-10-05 10:55:11Event JSON
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"content": "Sorry for the late response, I read it at your suggestion, I think all these points are argued against by shinobi in his recent episode with stephen livera.\n\nThe article presupposes that sidechain blocks will be built by proposers, rather than miners. The miners have an economic advantage in creating sidechain blocks because they are already bringing the hashpower, so they dont need to pay what the proposer would to get that block approved, winning a higher profit, so I would expect that the sidechain block production will be dominated by mining pools. Pools that have better tools to exract value from mining sidechains will dominate the mining industry, and make it unprofitable to mine without sidechain mining, let alone mining for anybody but the top pools. \n\nThe miners have an enhanced ability to reorg the sidechain too, and proposers lose their spent bitcoin in that case, but miners never needed to pay to create sidechain blocks because they mine it themselves.\n\nYou could say, as this article does, that every miner is engaged in finding these side hustles that effect the profitability of mining for everyone. Its not a *good* thing that mining companies are finding economies of scale or side gigs that screw with the economics of bitcoin, it causes miner centralization. We shouldnt look at that and step on the gas pedal, like \"ah fuck it, lets just go full send because load shedding is a thing\".\n\nFurther, these side hustles or tricks like having newer miners all revolve around having more hashing for less electricity. MEV presents a novel price incentive to mining that cant be compared to load shredding or mining on curtailed energy, because those grid issues are everywhere. Mining on ercot has been lucrative for iris, but eventually the texas grid will evolve to not need the miners and the incentives will evaporate, replaced by incentives posed by other grids like microgrids in africa. \n\nWhen these discussions picked up the line was that it doesnt pose a risk, it seems clear that it does pose a risk. Maybe you consider the risk worth it, but I don't; it adds too many unknowns to the incentives around mining, the lack of clear explanation of why miners wouldnt create the sidechain blocks is the most obvious issue I see.",
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