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TFTC: A Bitcoin Podcast
The Difficulty Adjustment (and Target) | Pierre Rochard, Center of Hash E006
Marty Bent • Technology
Marty Bent • Technology

Value for Value ⚡️

Machines Are Getting More Efficient

Episode Summary

Pierre Rochard, CEO of the Bitcoin Bond Company, discusses the functional importance of bitcoin’s difficulty target and adjustment, how it works at a technical and practical level, and why it is relevant collectively to the energy consumed by the bitcoin network, transaction finality and the issuance schedule of bitcoin’s fixed supply. https://www.nasdaq.com/articles/bitcoin-magazine-launches-bitcoin-corporations-show-hosted-pierre-rochard-ceo-bitcoin-bond https://www.linkedin.com/company/the-bitcoin-bond-company/
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Transcript

Chapters

  • Difficulty Target & Adjustment
  • The Function of Mining
  • 21 Million Bitcoin
  • Bitcoin Inflation
  • History of Monetary Economics
  • Entering the UTXO Set
  • Miner's Function With 21 Million Bitcoin
  • Decentralized System
  • Mining Function and Final Settlement
  • What is a Subsidy?
  • Bitcoin Mining Company
  • Exploiting SPV Mining
  • Coinbase Transaction
  • Namespace Collision
  • Slightly Less Than 21 Million Bitcoin
  • Security Budget
  • Transaction Finality
  • Double Spend and Finney Attacks
  • Attacks That Steal Revenue From Other Miners
  • Security vs. Transaction Finality
  • Bitcoin's Security Budget is Decreasing?
  • Mining as a Cost Center
  • Transaction Finality as Decentralization
  • $20,000 Bitcoin
  • The Hashing Side of Bitcoin
  • Honest Node
  • Proof of Stake vs Proof of Work
  • One Dude in His Parents' Basement
  • Explaining the Difficulty Adjustment
  • Miners Competing With Each Other
  • Preventing Seniorage
  • No Proof of Authority
  • Bitcoin is Just a Database?
  • Censorship Resistance
  • Each Node Checks Block Validity
  • Case Study
  • Miners are Not in Charge
  • Game Theory
  • Concept of Most Work
  • Satoshi's Mining Setup
  • Block Every 10 Minutes
  • Difficulty as a Number
  • Difficulty Increases
  • Hashing is Random
  • Block Header Data
  • Summarizing Block Transactions
  • Bitcoin as Immutable
  • Transaction ID
  • Merkle Tree
  • Chaining Blocks Together
  • Building on Top of the Previous Block Header
  • Satoshi and the Genesis Block
  • Difficulty Target
  • Difficulty Target in the Block Header
  • Adjusting Back to 10 Minutes
  • How Miners Arrive at a Difficulty Target
  • Satoshi Picking a Difficulty
  • Probability of Finding a Number
  • Getting Heads Five Times in a Row
  • Average of the Difference Between Those
  • Significance of the 10 Minutes
  • Initial Bitcoin Issuance Schedule
  • Soft Fork to Remove the Subsidy?
  • Incentive to Co-Locate
  • Block Propagation Perspective
  • Adding to Metadata Overhead
  • Bitcoin Nodes Setting Difficulty
  • Bitcoin Timestamps Aren't Precise
  • Global End Bits
  • Mind-Boggling
  • Bitcoin Node Verification
  • More Work, More Power
  • Bitcoin isn't a Clock
  • Bitcoin Miners vs The Mining
  • Hash Power Metrics
  • Understanding Metric System
  • 1 Peta Hash
  • Exa Hash
  • Gigawatts and Power
  • Time vs. Power
  • If You are Mining...
  • High Level
  • Broadcast That Valid Hash
  • Building On Sand
  • You're Further in the Future
  • Work and Power
  • Machines Are Getting More Efficient
  • One-Third of the Texas Electricity Grid
  • Importance of Final Transaction
  • Ensuring That There's Some Cost To It
  • Profit Motive
  • Commoditizes the Bitcoin Mining
  • Currency System
  • It Has To Be Valid
  • To Ensure that We're Within the Frequency
  • Ensure There's a Period of Time Distributed
  • Limits Per Day
  • Scarcity Space
  • Power Consumed
  • More Compounding
  • Last Question
  • Fixed Monetary Policy
  • Difficulty Adjustment
  • Without the Fixed Supply
  • Centralized Time-Stamping Service
  • Solving Problems and Providing Value
  • There Is No Mining Going On
  • Death Spiral
  • 21 Million
  • Bait
  • There Are a Lot of Dollars Out There

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