At the CoinGeek Toronto 2019 scaling conference, Kristy Leigh Minehan used her time on stage to tell everyone how Bitcoin SV (BSV) is changing the mining industry for the better. CoinGeek’s Becky Liggero joined her on the sidelines to further discuss how important miners are to the Bitcoin ecosystem, and how BSV is finally treating them right.
As Minehan sees it, miners have always been a crucial part of what makes Bitcoin work, but they’ve been underappreciated. “A big part of it is that mining is about a social contract, inherently with your ecosystem,” she explained. “So the rules of mining are simply that, as miners, we are going to expend a lot of economic resources in electricity and hardware costs. And in turn, our chain is going to do its absolute best to ensure that we, as miners, can secure revenues, but also that infrastructure providers will keep upholding the infrastructure of the network. Things like nodes, things like, you know, datacenters, colocation, hosting. So these three participants in the mining ecosystem are incredibly valuable.”
“Right now, part of the problem is no chain has gotten mining right. No chain has understood that it’s not simply a financial or economic game, it’s a social and psychological one, and it’s a wonderful, brilliant ecosystem that has to be nurtured,” she added.”
The mutual responsibility different groups in the Bitcoin ecosystem have for each other is an important dynamic to understand. “Miners have a responsibility,” she said. “They have to contribute economic resources. They also have to start investing in a bit of nodes and infrastructure. The chain, on the other hand, has to ensure that miners can get the appropriate transactions per second with secure revenue to secure an ultimate source of income outside of the block rewards. And then it’s incredibly important that, especially as an infrastructure, but like Core Scientific, that we support that.
How does Core Scientific achieve that? “We invest in trying to get revenues up for miners, and not only electricity price low, but ensuring that an effective electricity cost or an effective hosting cost is also quite low,” she told Liggero.
What has Minehan really excited is the way BSV is changing the game for miners, and for the better. “So right now, BSV has the opportunity to do this right, which is why I’m kind of here on behalf of a lot of miners, speaking and educating the BSV ecosystem,” she told Liggero. “So right now, on the [BTC] chain, there’s around $100 million dollars daily that’s missed, which is around $15 million lost transaction fees or lost miner revenue. So that’s important right there. The other piece is that BSV has a chance to give miners a voice.”
Making miners an important part of the decision making process will be a game changer. “Historically, miners are seen as second class systems in the ecosystem, that they’re just profit chasers or mercenaries,” she notes. “BSV has a chance to change that, and actually listen to them, and actually understand what they want.”
Minehan gave a specific example of how miners were screwed in the past by BTC:
A great case in point in Bitcoin history was SegWit. SegWit removed the fact that miners could use ASIC boost/ to lower their power consumption, specifically covert ASIC boost. Now that meant miners were forced to make a choice. Do I chase transaction fees in the hope that there’s going to be transaction volume, and have to pay a higher electricity cost? Or do I stay with the lower electricity cost, and instead just invest in the transaction volume.
Miners shouldn’t be forced to make that choice, especially when a large amount of them are not educated on the ecosystem.
You know, stereotypically, there is a divide between miners and the politics and the network, the chain. So this is one of the things that BSV has the chance to get right, and it’s exciting, because it’s for the first time in 10 years that the chain is listening to miners.
Liggero asked Minehan where the BSV community could make the biggest splash in recruiting willing miners to join the ecosystem, and China was the obvious answer. “So 70% of the mining ecosystem is currently in China; that needs to be captured,” she answered. “Secondly, I talked about how there was nomadic miners and tribalistic miners. Capture the tribalistic miners because they are important for Proof of Work (PoW) chain security. Tribalistic miners to stay locked in to the network. And then, after you’ve captured the tribalistic miners, start focusing on how do we increase the economic incentives to capture the nomadic miners as well, so people that just chase profit.”
The Genesis protocol upgrade on February 4, 2020 is a monumental step in the history of Bitcoin, and will see BSV returned as close as possible to the original protocol as envisioned by Satoshi Nakamoto. Visit the Genesis Hard Fork page to learn more.
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