Bitcoin Forum

I was wondering if there is a particular exchange price that bitcoin can rise to to keep the GPU and FGPA Miners still in the bitcoin game?

You have to look at diff and power cost as well.

If there's room for GPU/FPGA then there's room for more ASICs which will over time displace the older hardware.

In the the end the rise of Bitcoin price may keep GPU and FGpA in the mix a little longer but when more ASIC are deployed they will eventual leave the game?

As a GPU miner i am still making 300% profit, so we will have to see a difficulty of 9 million before i'm not profitable at current prices. 

I could very easily see a scenario where the price of bitcoin goes up fast enough to keep me profitable. at least for another 60 days or so. but i don't know how likely it is.

 Well, if there is a rise it will keep GPU miners longer in the game, and you have to keep in ming, that unless majority of miners are asic, asic miners dont have any benefit of being the majority, maybe keep like 20-30% of network. When all become ASIC, network will adjust the difficulty to 6 blocks/hour, and they will be making less money than gpu miners do now. At that point, lot of people will stop using bitcoin, price will drop with no support. What happens after that I have no clue. This way it was the "power to the people" thing, after that it becomes a rich people game.

As long as it doesn't concentrate too much power on too few hands, increasing difficulty and GPU mining becoming unprofitable shouldn't lead to a crash of the BTC price. Does the perceived value of gold go down because it becomes harder and more expensive to mine? On the contrary.

However, what may crash the value of BTC is when
- fewer people feel they need it for buying things
- when speculators (who don't use it to buy things but only hold it) get cold feet and cash out in mass.

At the moment, ASICs are being sold in BTC, but it's not their mining power but rather how one preorder round lasting a few minutes becomes a large part of the economy, that really affects the value of BTC vice the USD. The guys who preorder aren't holding on to BTC after their order has been confirmed, and the ASIC vendors probably aren't holding BTC either - they need to pay their employees, parts suppliers, shipping companies, etc.

The value of a currency - in addition to any numismatic or inherent raw material value - comes from what you can use it for. Since there's no raw material in a BTC, you must either want to exchange it for something now, hope that somebody else will pay for it in the future, or want it because you think it's a neat thing to have. (Like a coin collector who values coins that were subject to a manufacturing defect that makes it invalid as fiat currency, but more valuable as a collector's item.)

When the BTC rises, mining becomes more profitable, but only as a part of a zero sum game with all the other miners.

No, miners with GPUs will either stop mining or move on to litecoin.  Mining LTC is already 30% more profitable for me, I don't know why anyone would still be GPU mining BTC at this point.

can ASICs be used on litecoin?

Not currently.

is it just some software tweak or is it something all LTc miners would need to agree on?

Bitcoin use another algorithm.

So an ASIC can be built specifically for litecoin?

Yes, but it's significantly more difficult than for BTC and will likely not be 100x faster/more power efficient

See www.tarsnap.com/scrypt/scrypt.pdf

I have been saying the same thing since I started but not so eloquently.  Folks just don't want to accept it. Price of BTC is all that can save us now.

Very interesting.  I have never heard of LTC but if it is 30% better for GPU miners like myself I will look now!
Thanks.

 Currently a big part of btc trade is based on shady bussines, and the other big part is based on people, wanting to get something for almost nothing. Those are mostly gpu miners. People follow the logic - I want to pay for mega, why would I? Let the gpu make some money, and pay with it. It costs almost nothing. When these people leave, there will be a huge gap. What happens after the gap, I dont know.

nahhh miners will hoard their coins untill selling is profitable, ASIC mining will be profitable for a long time.

If someone has free electricity they could still make a profit with GPUs

 True, but in case of difficulty going up 10X or more, it is more profitable to sell cards

I was speaking of a situation where someone is mining during their gaming rigs downtime.

 Ah that :). Sorry. my brain doesnt work that way :D

understandable

No quit now.

that's a well-kept little dirty secret in the mining industry  ;)

What? LTC is your dirty little secret to success in the age of Bitcoin ASICs? LTC is old news, and isn't really going anywhere. It hasn't been going anywhere for a long time, now. The only reason it's even still around is because it was the most popular of the alt-coins, which isn't really saying much.

Pass reading comprehension exam and get your GED first.

Which part of the sentence of "Mining LTC is already 30% more profitable for me" you didn't understand?

And what sites accept LTC that aren't a trading platform?

Why should miners care? You mine, you sell, you make money. No need to get philosophicalish complicated.

If you try to find a place for ltc-bashing, this is the wrong thread.

I know, it's this terrible alternative currency that has made more more money than bitcoin mining has over the past 6 months.

New to the game and the board.

Seems like the rise in difficulty for mining BTC will move older gen hardware out of profitable BTC mining.  That hardware may sit idle but looks like many people may elect to move to LiteCoin mining to maintain profitability, even if profitability is speculative at first.

Wouldn't more people mining for LiteCoins increase demand for LiteCoins?  Then people can exchange litecoins for Bitcoins or for fiat.

This seems to be a normal progression of the rise in difficulty in mining for BTC.  As opportunity cost rises more people will look for a cost that works for their situation and opportunity will follow demand.

Maybe I have this all wrong just my questions/thoughts.

Orly? Did you forget about the massive LTC roller-coaster after the BTC reward half? People jumped onboard cuz it was more profitable, and then jumped off when the network adjusted and everyone (literally, everyone) was mining at a loss. Up down up down. You're really looking forward to that again when BTC difficulties hit 10M+ and GPUs aren't even profitable with BTC anymore?

No, more people mining litecoin would increase supply, not demand. This will certainly profoundly impact litecoin. Prices will drop, and the difficulty is already projected to rise 35%. In the long term, there is no saying what will come out of this.

Mining only has an indirect effect on price. People mine to make money, the value of their currency does not inspire them and they want their mined coins to be valuable, so some of them branch out into other ventures which actually do affect price, such as selling goods with their currency etc. If people don't do the latter, the price will not rise, as the value of the currency is determined by speculation and trade, NOT mining. By virtue of the way Satoshi designed the original successful cryptocurrency (obviously BTC), mining doesn't affect production either. Production varies slightly from difficulty to difficulty, but overall is relatively constant.

As for the original question [Can the the rise of bitcoin price keep GPU and FGPA in the mix?] - that question is easy to answer: No.

Isn't LTC supply set at a fixed rate over time like BTC?  

So if one person was the entire system/network and doing all the mining they would get all the coins just as fast as if 100 people are mining.  If one person has all the coins there would be no demand for the coins unless others see a perceived value which is generally based on the perception of the scarcity of the item.

If 100 people tried mining the coins, people who wind up with fewer coins will want more coins and will be more open to trade items to get the coins.  That's the demand I'm talking about.  That gives the item value, like when people decide Beanie Babies have value, or Tulip bulbs.  The demand is really driven by people with less wanting more and people with more trading for things they value in exchange for the item with the people who have less.

I think then as the cost for mining BTC goes up for people with GPU and FPGA systems they will search for greener pastures and mine LTC which will give LTC value to that group of people.  It is a function just like people selling items in any MMORPG.  The items have a lot of value to people in the game, then more people get involved to try and profit and all the sudden there are auction sites and exchanges.  

To me this is no different than a MMORPG, other than some businesses outside the supply chain, economy, of the game are starting to accept BTC for goods or services that have nothing to do with the game of BTC.  These businesses accept BTC because of liquidity that is derived from so many people wanting more BTC that they are willing to trade currency for the BTC.

I know BTC is considered a quasi currency, but until governments accept BTC as payment for tax debt then it is just another commodity.

Just my 0.00000002 Bitcents.

Sounds like someone's jimmies are rustled

Well sort of. I don't have anything particularly against LTC, at least not more than I do against any other alt-coin, except for the fact that people view it as their salvation for GPU-leftover-woes when the BTC difficulty goes up.

When I see someone mining LTC, I don't see a Kh/s making LTC stronger, I see a missing Mh/s that could be making the BTC network stronger, but isn't. As ckolivas said, the real strength of Bitcoin is that it's a currency, and it grows and is stronger when people use it as such. Buy. Sell. Trade. Whenever people buy or sell with LTC, that's another transaction that could have furthered the adoption of BTC.

I would much rather see people sell their GPUs, buy ASICs, and keep the BTC network strong than switch those GPUs to LTC.

The Btc network is already more powerful than any supercomputer in the world...

Just sayin'...

For people in the United States, i think alot of GPU miners will go offline that are paying for their own power. In the winter you can leave a window open and have your room cooled. But with summer your overhead will go way up trying to keep a computer room cool.

Interesting thing, I dont have to cool the rooms before its 40C at some point in the day. People usually go for mass cooling, instead of lowering the core on cards. If you lower your 1000MHz core on 7950, to 900MHz, it does wonders too. Also work on proper airflow, use extenders to pull apart cards. Usually is much cheaper then buying 24000 BTU air conditioning that runs on like 1.7kW (if you buy an efficient one)