On May 6, Kurt Wuckert Jr. and Michael, aka ‘Root,’ stopped by the Brittany Bitz Podcast to talk about BSV, mining, GorillaPool, and more.
Mining 101—the basics
The conversation starts with a high-level overview of what mining is, how it works, and why it matters.
“It’s a race to solve a puzzle in order to show that you care enough to secure the network,” Kurt begins, likening miners to digital accountants. He explains that nodes are competing against one another to be the one that reconciles the state of the ledger every 10 minutes. For that, they’re rewarded with a block reward subsidy plus the transaction fees inside each block.
Brittany prompts Kurt to break it down further, asking him to imagine he’s explaining it to someone who doesn’t have any technical experience, such as a grandparent. He explains that miners compete to build blocks and send transactions across the Bitcoin network. They want to solve the puzzle first and propagate the transactions efficiently to other nodes in the network.
“Bitcoin is a competitive accounting system,” Kurt remarks.
The best way to learn about Bitcoin mining, according to Michael, is to do it. There are YouTube resources and a few websites, but most miners keep their secrets close to their chests as they don’t want their competitors to know what they’re doing. Kurt notes that Satoshi Nakamoto never gave any guidance on mining. Michael explains how he learned by trial and error, even forking Litecoin to play around with it back in the day.
The early Bitcoin mining days—experiences and regrets
Brittany then asks what both men wish they’d known earlier, and they both answer that they wish they’d known about ASICs sooner.
Kurt explains how he was always six months too late as far as mining hardware went. While Michael dispels the myth that mining back in the early days was easy, sharing a story about a friend who spent 100 BTC on a mining rig that was virtually obsolete by the time he got it.
Both lament that miners ended up focusing on block reward subsidy mining. Kurt says that if he had one criticism of Satoshi, it would be that the subsidy is too long. This has allowed miners to live a lavish lifestyle on subsidies and has allowed them to put off scaling Bitcoin for longer.
Found Fresh Bananas 🍌🍌
Size: 3.65 GB
Tx count: 2,512,670
Average fee: $0.00038
Total fees: 9.76 BSV
Total revenue: 16.01 BSV
Revenue from fees: 60.96%https://t.co/tbY59NdZvf
— BananaBlocks™ by GorillaPool🍌🍌 (@banana_blocks) April 4, 2022
How does the price follow hash power, and what is the significance of that?
Kurt says that to date, price is the number one indicator to where hash power will be. Hash power follows profit, he explains, saying that when BSV has much larger blocks full of transaction fees, hash power should follow the money regardless of token price.
Going deeper, Kurt explains that theoretically, the only limits on block size are those imposed by physics, and nobody knows what those limits are yet. In the future, he sees a world of petabyte or exabyte blocks full of data that will be “absurdly profitable to mine.”
Brittany asks how anyone interested in adding hash power to the network can get started. Kurt explains that GorillaPool has a turnkey solution in the $10,000-$12,000 range, and there are second-hand options, but they can be frustrating. As for ROI, it’s likely to take 12-24 months to get the money spent on equipment back, but it also depends a lot on the token price, and you have to hope someone doesn’t create a much more efficient machine in the meantime.
We’re going to start aggregating ASIC sales. If you want to benefit from discounts and economies of scale, you should definitely let us know your budget in the CONTACT US form at https://t.co/iTw4lhPdwD https://t.co/iTw4lhPdwD#bitcoin #bitcoinmining
— GorillaPool.com🍌🍌 (@MineLikeAnApe) May 4, 2022
What is mAPI?
Brittany asks one of the two guests to explain what mAPi is and why everybody is talking about it. Kurt takes the question, explaining that mAPI stands for Merchant API and allows merchants to receive payments and forward them to a miner of their choice. This would allow them to request that only well-connected nodes process their transactions, allowing them to prove double spends instantly, among other benefits.
However, Kurt does not think mAPI has been well implemented. It switched programming languages, and it doesn’t do what it was designed to do reliably. He notes that 98% uptime sounds good until you’re doing five million daily transactions, in which case there are a lot of rejects.
Michael adds that there needs to be working solutions to allow merchants to process transactions to miners directly. However, he adds that he’s not a fan of keeping transactions private for various reasons, including that it increases their orphan risk for a smaller mining pool like GorillaPool.
On Gorilla Pool and its goals for the future
Michael explains how he and Kurt connected after he had followed him on social media for a long time. Once he heard about the Gorilla DAO, he saw an opportunity to get more actively involved and “work his way towards the center of the network,” and he took it.
Brittany then asks about the short, medium, and long-term goals for GorillaPool. Kurt answers that short term, it’s all about the little sticks in the fire, such as completing the website, launching APIs, tightening up infrastructure, and more. In the medium term, it is surviving until the next halving is the number one priority. In the long-term, “absolute global domination” is the goal. GorillaPool wants to be a world-class data processing company.
Kurt explains how he believes miners will be thought of like ISPs such as AT&T, Verizon, and others in the future. He believes that as long as GorillaPool stays lean, mean, and profitable, it will someday be a massive company. Michael agrees, adding that one of the medium to long-term goals is to compete with TAAL (CSE: TAAL) (FWB: 9SQ1) (OTC: TAALF) and other large transaction processors.
Kurt wraps up by explaining that GorillaPool is there to help, is open to hearing from anyone using BSV if they have questions or need assistance, and that spreading the word about GorillaPool is the number one way to help in return.
Watch: CoinGeek New York presentation, A Study of Bitcoin & Blockchain Energy Consumption
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.