Subject: Re: [Bitcoin-development] death by halving

From: Alex Mizrahi <[email-masked]>
Date: Sat, 25 Oct 2014 22:08:05 +0300

> The hashpower market is maturing in the direction of
> financial instruments, where the owner of the hashpower is not
> necessarily the one receiving income.  These are becoming tradeable

instruments,

Meni Rosenfeld issued tradeable mining bonds back in 2012:

https://bitcointalk.org/index.php?topic=65569.0

So this is hardly new stuff. But it definitely won't help.
The contract specifies how many bitcoins bondholder would get depending on
difficulty and other factors.
But, usually, bondholder doesn't care (and cannot check) where these
bitcoins come from.

Thus the owner of the mining equipment can temporarily turn off that
equipment off, and instead buy them on the market, as he needs to spend
less money than he would spend on electricity. Then he can pocket the
difference.

> Simplistic models cannot predict what hashpower does in the face of
> business-to-business medium- and long-term contracts.
>

Ah, yes, let's forget game theory, business people know it better!