Michael Saylor, the founder of the American software company MicroStrategy, is a well-known Bitcoin supporter, and as of now, MicroStrategy is still the company with the largest Bitcoin holdings among all listed companies, holding a total of about 138,955 Bitcoins.
Increased holdings again on March 27: Micro-strategy operation, paid off the Silvergate loan at a discount, and increased Bitcoin again
However, Michael Saylor's recent discussion on Bitcoin mining and security has sparked widespread discussion in the community. Erica Wall, chief investment officer of cryptocurrency hedge fund Arcane Assets, publicly mocked Michael Saylor for his views on bitcoin chip mining machines, calling him a "fake expert."
And Michael Saylor himself defended his point of view under Erica Wall's tweet, saying:
"On this matter, we disagree. As the computing power of the entire network increases, the network will become more secure. At the same time, with the improvement of ASIC technology, J/TH (a measure of the energy efficiency of mining machines) will be reduced, and the network will become more energy efficient. The key to long-term security is that Bitcoin PoW can take advantage of advances in custom silicon (such as Apple).”
As soon as this remark came out, it immediately sparked widespread discussion in the community. Sassal, the co-founder of EthHub, directly tweeted a message mocking Michael Saylor, as the biggest evangelist of Bitcoin, investing billions of dollars in Bitcoin, and the Bitcoin Mining Committee. The main members of the company don't even know the principle of Bitcoin mining.
Saylor, who is one of the biggest Bitcoin shills, has invested billions into BTC and is one of the key members of the 'Bitcoin Mining Council', does not understand how Bitcoin mining works.
Absolute clown world https://t.co/RiAA10F6D3
— sassal. ETH 🦇🔊 (@sassal0x) March 26, 2023
So where did Michael Saylor go wrong? There are two misunderstandings in his view.
The first is "the advancement of ASIC technology will promote the increase of the computing power of the entire network and increase the security of the Bitcoin network." The measure of Bitcoin network security is directly related to the cost of attack (cost of electricity and hardware). Assuming that after 5 years, the computing power of the entire Bitcoin network increases, but at the same time the cost per unit of computing power relatively decreases, which means that the security of Bitcoin may not increase during these five years.
On the other hand, compared with the size of computing power, the distribution of computing power has a greater impact on the security of the Bitcoin network. Assuming that the computing power of Bitcoin is 5 times that of the present in 5 years, but 40% of the computing power is controlled by a single entity, then the security of Bitcoin will not increase but decrease.
Regarding Michael Saylor's second point of view "Advancement in ASIC technology will help reduce energy consumption of the Bitcoin network", it seems reasonable at first glance. Advancement in ASIC technology will improve the energy efficiency of mining machines, and the Bitcoin network will It should be more energy efficient, right? But in fact, there are also misunderstandings in this view.
Increased energy efficiency of mining machines means lower energy costs for mining (as less electricity is required). But while your cost is reduced, the cost of your competitors who use the same mining machine as you is also reduced. Advances in mining equipment will entice other miners to enter the market, which increases competition and reduces each miner's revenue, and in order to maintain the same level of profitability, other miners will be forced to increase inputs to maintain profitability, including adding More miners.
This can be easily verified from the history of Bitcoin. The energy efficiency of Bitcoin mining equipment has been greatly improved from the original CPU to the current ASIC chip mining machine, but the energy consumption of the overall network has not been reduced.
At the same time, the community also stated that energy consumption is directly proportional to network security, and it is quite strange to claim that the future energy consumption of the Bitcoin network will decrease but the security will increase. In addition, in terms of energy, Bitcoin should focus on improving the utilization rate of green energy, rather than how to reduce the energy consumption of the entire network.
