Wednesday, January 5th 2022 - Issue #1140

A lesson from Kazakhstan

Last night, we wrote about the ongoing (what I now feel comfortable to call) uprising in Kazakhstan that seems to be a result of a rapid increase in the price of gasoline combined with a slow growing resentment of the incumbent government by the Kazakh people that finally came to a head. We're writing almost exactly 24-hours after yesterday's rag dropped and a lot has happened. The Kazakh people have successfully forced the incumbent government leaders to resign, but not before that administration attempted to stomp out the uprising by completely shutting down the Internet within the country.

The situation is still ongoing and I'm sure a lot will happen between now and the medium-term, but the move by the government to shut down the Internet may have had an affect on the Bitcoin network as it seems hashrate dropped a bit after the Internet blackout was initiated. Many of you freaks may not be aware of this, but a combination of historically cheap energy and last year's ban on mining by the CCP has drawn a material amount of Bitcoin network hashrate to Kazakhstan. Many estimate that the country is home to ~18% of the hashrate dedicated to the Bitcoin network.

If you look at the amount of blocks mined by the top pools in the last 24 hours and compare that to the amount of blocks mined by those pools over the last five days, it seems that block production slowed as many Kazakh miners were unable to send hashes to minnig pools after the government cut off the Internet.

Foundry, AntPool, F2Pool, Slush, and Luxor seemed to have mined less blocks than they probabilistically should have had hashrate remained relatively steady, which may verify that Kazakh miners were essentially cut off from the network, at least temporarily. If true, it begs the question; how can miners and the industry at large act to ensure this type of attack doesn't perturb block production in the future? Considering the last two years the world has experienced, your CRAZY Uncle Marty doesn't think it's too far fetched to believe that governments around the world could potentially coordinate to cut off centralized access to the Internet across the globe as Kazakhstan just did to its people if they ever deemed Bitcoin a serious threat worth dealing with.

This scenario is probably an extreme edge case, but extreme edge cases are what distributed systems should be fine tuning for if they plan to be sufficiently robust and anti-fragile. Taking this extreme edge case into consideration, it is probably important that miners with a lot of capital at risk work to ensure that they can propagate valid hashes via as many avenues as possible so that they can increase the certainty of their revenue streams. This means not being dependent on very centralized Internet Service Providers to relay their messages to mining pools and/or the overarching Bitcoin network.

This means having miners spin up their own ISPs, leveraging Satellites, using short wave radio to bounce messages off the moon, and tapping into mesh networks that can route around the Comcasts, Verizons, and Google Fibers of the world. No one avenue is perfect, but if each avenue is open and accessible to miners and they are given the option and fail safe options to utilize a number of transaction relay methods, it will be much much harder to prevent them from getting their valid hashes to the rest of the network. Which should ensure the network operates as smoothly as possible.

Let me be clear, Kazakh miners getting kicked off the network wasn't a major attack on Bitcoin, but an attack on the Kazakh people. Bitcoin miners happened to be collateral damage of these extreme measures. However, Bitcoin miners should design their operations to be unaffected by the extreme measures governments will take to limit the spread of freedom in the form of information. Don't have single points of failure when it comes to delivering valid hashes to the rest of the network. Find those hashes and then send them via massive ISPs, private ISPs, Satellite, short wave radio, Ham radio, and mesh networks. It's the ultimate way to secure your revenue streams.

Man I love this shit.

Final thought...

A mid-week lunch with the wife should be mandatory from here on out.

Share

Forward

Hope you enjoyed today's issue. If you have any friends that are looking to find out more about Bitcoin have them sign up for this newsletter here:

Get Ƀent

Ƀent noun 1. direction taken, as by one's interests; inclination.

Thanks for reading Marty's Ƀent, a daily newsletter containing all the information I found interesting in the Bitcoin world in the last 24 hours.

Marty's Ƀent - January 5th, 2022 - Issue #1140

A lesson from Kazakhstan

Older messages

Marty's Ƀent - January 4th, 2022 - Issue #1139

Marty's Ƀent - January 3rd, 2022 - Issue #1138

The Sat Standard - Bitcoin Weekly - Jan 1 2022

Marty's Ƀent - December 29th, 2021 - Issue #1137

Marty's Ƀent - December 28th, 2021 - Issue #1136

You Might Also Like

Cardano’s Charles Hoskinson reacts to White House crypto summit snub

Monthly Update on Blockchain Technology: Pectra testnet activation, zero-knowledge gossip, BNBChain roadmap

Reminder: White House Schedules First Ever Crypto Summit

Donald Trump to reportedly unveil Bitcoin reserve strategy at White House crypto summit

DeFi & L1L2 Weekly — 🚀 Cronos pioneers seamless crypto-to-debit transfers; Virtuals Protocol saw a 95% drop in tr…

DeFi & L1L2 Weekly — 🚀 Cronos pioneers seamless crypto-to-debit transfers; Virtuals Protocol saw a 95% drop in tr…

Global Crypto Mining News in February：U.S. Customs Increases Scrutiny of Chinese Bitcoin Mining Machines, Bitdeer …

Crypto traders lose nearly $1 billion as US-China trade war overshadows Trump’s crypto reserve initiative

Analyst Spotlight Solana Overview

ETH Denver Conference Impressions: VC Indifference, Lackluster Narratives, and the Disillusionment of Idealism