The Real Story About The Bitcoin Blockchain
It is sad to see El Reg brainwashed by Bitcoin propaganda that masks the true story about its blockchain. I would love for you guys to dig in to verify that what I say below is true, and then go on to publish a series of "Register Exclusives" about Bitcoin...
Consider paragraphs 3 and 4 of your article:
"Every ten minutes, a new block of data is added to the blockchain, detailing the latest transactions that have taken place. Each block includes a cryptographic hash of all its transactions.
A hash is unique, and is computed based on the transaction data that it represents. If any part of the underlying data changes, the hash changes too. Any fraudster wanting to tamper with a block’s transactions would need to also alter the hash recorded for that block to match the new, fraudulent set of transactions. Given that the computing power distributed around the whole Bitcoin network takes ten minutes to produce the hash, that’s a tall order."
Focus on that last line. Look at the true data here (and be sure to click on the "all-time" link at the bottom of this page):
Exponential growth burnout is strangling Bitcoin. It cannot keep growing in its present form, and changes / patches described in your article to address blockchain bloat are not aiming at the real problem. For the past year, Bitcoin hash rates have been stuck between 300 and 400 million billion hashes per second. Since it takes 10 minutes or 600 seconds to generate the "winning" hash, it takes at least 300 X 600 = 180 thousand million billion trial hashes to generate the actual hash / block that gets added to the blockchain. That's 180 billion Gigahash (GH) currently required to add one block to the Bitcoin blockchain.
Key point: EVERY SINGLE ONE of these 180 thousand million billion hashes generated by the "the Bitcoin network [that] outpaces the world’s top 500 supercomputers combined" can secure the Bitcoin blockchain just as well as ANY OTHER. The "combined effort" of all miners / the "networked Bitcoin ultrasupercomputer" is NOT required to secure the blockchain. Literally only 1 / 180 thousand millon billion or 0.0000000000000000005% (that's 18 zeros) of that expended computer power is required to secure the Bitcoin blockchain. The rest of those cycles and calculations are TOTALLY WASTED.
Wasted calculations means wasted electricity. How much? Well a state-of-the-art Monarch Bitcoin Miner (see: http://www.butterflylabs.com/monarch/ ) uses 480 watts to deliver 700 GH/s. To get the 300 million GH/sec currently needed to run Bitcoin, we thus need the equivalent of 300,000,000 / 700 = 425,000+ Monarch miners burning over 200MW of power. This low-end conservative estimate is one-sixth the entire electrical output capacity of the UK Sizewell B nuclear plant - just to run Bitcoin! Use 400 million GH/s instead of 300 million GH/s, or consider that most of the miners out there aren't running state of the art equipment - the wasted power is even more, possibly even doubled to 400MW. Nobody really knows. And Bitcoin somehow overcoming its current exponential rut to expand further is a prospect that is nightmarish.
So if ONLY ONE HASH is needed to secure Bitcoin, why generate 300 thousand million billion of them per block? To distribute prize money (currently 25 bitcoins worth around $6000 total) to the ONE lucky Monarch mining computer out of 425,000+ that gets a hash that just coincidentally has the agreed-upon number of leading zeros in its byte file. The miners are literally playing a lottery that declares a $6000+ winner every ten minutes. The Bitcoin protocol selects 144 such winners per day and around 50,000 such winners per year. At least 375,000 mining computers out there (and probably a much higher number since most are not Monarchs) are going to run 24/7 for a whole year and never contribute a single block to Bitcoin.
Bitcoin miners are no different than gamblers shooting dice in a back alley, only they use computers instead of dice, they use leading zeros in their hash data file instead of dots on the dice face, and they use the Internet instead of a back alley.
Thus Bitcoin mining is illegal gambling in most countries, tho its technical obfuscation has prevented it from being widely recognized as such. This will change soon.
In the US, gambling law is handled by the States, not the Federal government, and so far the States have not been made aware that Bitcoin and other proof-of-work coins like the upcoming Etherium are actually running illegal lotteries. And they are doing so by diverting attention from the truth by getting people to believe that "a supercomputer network is required to secure the blockchain" and "gaming network video cards can mine our coin for rewards". See:
The real future of cryptocoins is in small, low-cost, low impact that concentrate on actually SECURING THE BLOCKCHAIN instead of RUNNING AN ILLEGAL LOTTERY SCAM. One such coin is Crypti, which I support. As a so-called Distributed Proof of Stake (DPoS) coin, we have a circle of 100 computers that COOPERATIVELY add blocks to our blockchain every 10 seconds. Good things are coming for Crypti even tho we are currently relatively unknown as our development proceeds. Please read more about us here:
Crypti and other DPoS coins are the mice that will outlast the coming fall of the COMPETITIVE Proof of Work (PoS) ten-minute-per-block dinosaurs like Bitcoin and Etherium.
Somewhere above is a story or two worthy of further El Reg investigative coverage, no?