Bitcoin Forum

You SERIOUSLY need to spend much more time in the Economics/Politics section of this forum. You have a lot to learn. This was a very long and very thought out post, and you should be proud of it, but there are just so many misconceptions in it regarding the way people and markets work that it would take for ever to address them all. Sorry.

Hello fellow MineCoinians,

      I am a true believer in the pure and honest morality of freedom and even though I am fairly new to the crypto-currency community, for this reason I am very excited about the ultimate potential of the Bitcoin ideology. Though I hold no religious theology as true and absolute, I do believe that man has, over the eons, collected a great deal of wisdom and that wisdom is most of often found in the various religious text of history. One of the most quoted religious phrases from the hebrew and christian bible is that 'money is the root of all evil.' You most likely have heard this phrase many times before, but that phrase does not exist. What is actually written is that 'the LOVE of money is the root of all evil.' It is this fragment of ancestrial wisdom that I wish to bring to lite so as to address the logic behind my assertion. Decentralization, the very foundation of the Bitcoin ideology, is at serious risk of annialation.

      First and foremost I want to be honest about what brought me to this moment in my life. I am a college student studing for a double major (computer enginering and physics) and working towards an eventual PHD. Because of past mistakes I have serious financial trouble so holding a job wouldn't be worth it after creditors and uncle Sam take their cut from my paycheck. I was searching online for a way to make an income that would not take to much time away from my studies when I came across bitcointalk.org. I immediately downloaded and installed bitcoin-qt and the bitminter client and fired up my GTX690. After some days passed it became apparent that it was going to take awhile to make very much money at all so I started to research my options. This research of course revealed the world of FPGA mining rigs and the latest holy grail of miners... the ASICs rig. At that point I became very discouraged, not so much because FPGA and ASICs hardware was too expensive and out of reach, but that FPGA and ASICs hardware was too expensive and out of reach for me in my situation. This fact is the critical link that enduced my awarness of the major point I wish to make in this article.

     I did alot of brainstorming trying to figure out a way to improve my situation and I came to one inevitable conclusion, I cannot do it alone. The best option I could imagine was to set up a special mining pool just for raising funds to build/purchase an ASICs mining farm soley to provide all the mining participants in the pool with their own ASICs rigs. This is another key to my argument, as I conducted my research on mining pools I became highly aware of the negative impact that a scarce supply of ASIC mining hardware will have.

     There will always be disparity between classes in wealth, thats just the nature of life. Bitcoin mining has offered a more level playing field because with careful planing and proper financial structuring an individual could start a small mining venture and grow that effort and diligence into operating rigs that have a respectful hashrates. ASICs technology threatens the balance that has exists because it is disrupting the level playing field. Those who can afford to pay a premium to adopt ASICs hardware early have such a massive hashing advantage that even the advantages of the best FPGA setup will rapidly evaporate as difficulty level rise at an exponential rate. This leades the FPGA miners scrambling for extra FPGA units and trying to squeeze out every last drop of effency from their FPGA setup. The run on ASICs and FPGAs raises the prices and causes an increasingly diminished supply of ASICS and FPGA units.



     GPU miners tend to be the types of people that have limited resources, dual purposing by using their rigs for gaming and mining or are trying to earn enough coin to upgrade to better mining rigs. Humble GPU mining can still be (to an ever decreasing extent) vaible for some miners and a few short months ago had pretty decent hashrates but not for much longer. The GPU miners are rapidly being left out in the deep, cold emptiness of crypto-mining space with warp drives that are failing because of a quantum shift in the alternate laws of mining physics.

     These GPU miners are being further disparaged by the scarcity and rising prices of FPGA and new ASIC hardware. This furthers the class divide between GPU miners and those who can afford to pay a premium and adopt ASICs hardware early and FPGA miners who are able to keep up and eventually transition to ASICs hardware because GPU miners generally cannot afford or cannot aquire the hardware to upgrade. By the time the few remaining GPU miners are able to upgrade many of them may never be able to catch up because the hardware requirements to make mining feasible have continued to increase at an exponential rate without their participated. To further the STAR TREK analogy, these straggling GPU miners will be droped from the warp conduit simply because they ran out of antimatter while trying to catch up to bigger, faster and more advanced starships leaving them disparagingly adrift forever in the sameness of space as the the other GPU miners that preceded them.

     This is the type of situation that has historically given rise to desperate levels of poverty in ordinary societies, it is simple economics coupled with human self protectionism. A digital future is our worlds destiny and whether or not bitcoin will survive far into that future is irrelevant, but the conduct of the bitcoin community will greatly influence the nature of humanities destiny within that future and is instrumental in laying the foundation for what kind of society humanities future is built on. So how we, the bitcoin community, behave during this transitional shift has profound significance for the quality of life of future generations. The question I pose to you is this; are we, at this profound and criticle moment in history, going to perpetuate the blind sins of the past because of short sighted self preservationizm and greed or are we going to create a revolution in the human condition for the benifit of all of man.

     The core principle of Bitcoin ideology is the decentralization of currency, and for what pupose? We all know the answer to this question. It is because we all know the evil that men drunk with power will do to his very own blood let alone what he would do to you. But what do you think it means if crypto-coin mining becomes just another resource that only rich corporations can afford to harvest? How different do you think that this situation will be from the way things are now, or the way things have always been? Once a viable crypto-currency is embedded into a culture it becomes no different than any other essential resource and is subject to the same jurisdictions. If crypto-mining is only available to an elite group of wealthy individuals, then it becomes subject to the concerns of the elite. History shows us that elitist tend to be unfair, greedy self preservationist who are susceptible to and often the very architects of political pressure. Ask yourself this question and answer yourself honestly. If you had invested years of your life mining a substantial amount of bitcoin wealth and suddenly you find yourself faced with the decision to either protect the principles behind Bitcoins Ideology and loosing all the wealth you had worked so long to acquire or forsaking the ideology of Bitcoin and keeping all your acquired wealth, minus some taxes and fees, knowing that you'll likely live well the rest of your life, what would YOU do? Again, history shows what most people would do, its a simple matter of self preservationizm. This is why decentralization is so critical.
     
     I think we all agree that we do not want the situation to get to that point, but that is the course it is presently taking and only together can we stop this decent of such a noble endeavor. So what is it that we can do? In many respects the solution is simple in concept, its the execution thats more challenging. The hardest element to overcome is at the core of the human instinct to survive, and that is the instinct of self preservation. This instinct is of course very strong and because human beings are intellectual creatures this instinct is often triggered when our ideas or sense of self are in intellectual danger even though our bodies or lifes may not be. This is the major cause of human irrational behavior. So for the sole sake of logic it stands to reason that if smaller and smaller groups continue to control larger and larger portions of a finite pool of resources then you either must exponentially increase the quantity of the reasources or you must equalize the method of gathering the resources to a broader group of people. Fortunately in this case the resource is is a fabrication of man.

     So with that being said, lets open this up for discussion...  I release it to the floor...

________________________________

The bureaucratic mentality is the only constant in the universe.
-Dr. McCoy, Star Trek IV: The Voyage Home

You SERIOUSLY need to spend much more time in the Economics/Politics section of this forum. You have a lot to learn. This was a very long and very thought out post, and you should be proud of it, but there are just so many misconceptions in it regarding the way people and markets work that it would take for ever to address them all. Sorry.

The easiest solution to your problem are the pass through shares and mining pools available for sale on one of the bitcoin stock exchanges. You can be a part of a mining pool or gain a share in a mining company for a very small investment and when you have enough you will be allowed to vote on the key issues for that security.

If you look at the distribution of blocks right now it is clear that their is a fairly good distribution of mining power. Unfortunately your late arrival to the game makes it impractical for you to start mining without a significant capital investment. As you said this is the way of the world and if you want to get exposure to mining their are still ways to do it, just not through direct personal investment.

Great read thanks a bunch!

Hello fellow MineCoinians,

      I am a true believer in the pure and honest morality of freedom and even though I am fairly new to the crypto-currency community, for this reason I am very excited about the ultimate potential of the BTCitcoin ideology. Though I hold no religious theology as true and absolute, I do believe that man has, over the eons, collected a great deal of wisdom and that wisdom is most of often found in the various religious text of history. One of the most quoted religious phrases from the hebrew and christian bible is that 'money is the root of all evil.' You most likely have heard this phrase many times before, but that phrase does not exist. What is actually written is that 'the LOVE of money is the root of all evil.' It is this fragment of ancestrial wisdom that I wish to bring to lite so as to address the logic behind my assertion. Decentralization, the very foundation of the Bitcoin ideology, is at serious risk of annialation.

      First and foremost I want to be honest about what brought me to this moment in my life. I am a college student studing for a double major (computer enginering and physics) and working towards an eventual PHD. Because of past mistakes I have serious financial trouble so holding a job wouldn't be worth it after creditors and uncle Sam take their cut from my paycheck. I was searching online for a way to make an income that would not take to much time away from my studies when I came across bitcointalk.org. I immediately downloaded and installed bitcoin-qt and the bitminter client and fired up my GTX690. After some days passed it became apparent that it was going to take awhile to make very much money at all so I started to research my options. This research of course revealed the world of FPGA mining rigs and the latest holy grail of miners... the ASICs rig. At that point I became very discouraged, not so much because FPGA and ASICs hardware was too expensive and out of reach, but that FPGA and ASICs hardware was too expensive and out of reach for me in my situation. This fact is the critical link that enduced my awarness of the major point I wish to make in this article.

     I did alot of brainstorming trying to figure out a way to improve my situation and I came to one inevitable conclusion, I cannot do it alone. The best option I could imagine was to set up a special mining pool just for raising funds to build/purchase an ASICs mining farm soley to provide all the mining participants in the pool with their own ASICs rigs. This is another key to my argument, as I conducted my research on mining pools I became highly aware of the negative impact that a scarce supply of ASIC mining hardware will have.

     There will always be disparity between classes in wealth, thats just the nature of life. Bitcoin mining has offered a more level playing field because with careful planning and proper financial structuring an individual could start a small mining venture and grow that effort and diligence into operating rigs that have a respectful hashrates. ASICs technology threatens the balance that has exists untile now because it is disruptive to this level playing field. Those who can afford to pay a premium to adopt ASICs hardware early have such a massive hashing advantage that even the advantages of the best FPGA setup will rapidly evaporate as difficulty levels rise at a sudo exponential rate. This leades the FPGA miners scrambling for extra FPGA units and trying to squeeze out every last drop of effency from their FPGA setup. The run on ASICs and FPGAs raises the prices and causes an increasingly diminished supply of ASICS and FPGA units.

     GPU miners tend to be the types of people that have limited resources, dual purposing by using their rigs for example; gaming and mining, or are trying to earn enough coin to upgrade to better mining rigs. Humble GPU mining can still be (to an ever decreasing extent) vaible for some miners and a few short months ago had pretty decent hashrates but not for much longer. The GPU miners are rapidly being left out in the deep, cold emptiness of crypto-mining space with warp drives that are failing because of a quantum shift in the alternate laws of mining physics.

     GPU miners are further disparaged by the scarcity and rising prices of FPGA and new ASIC hardware.  GPU miners generally cannot afford or cannot aquire the hardware to upgrade. This furthers the class divide between GPU miners and those who can afford to pay a premium and adopt ASICs hardware early and the FPGA miners who are able to keep up then, eventually, transition to ASICs hardware. By the time the few remaining GPU miners are able to upgrade, many of them may never be able to catch up, mstly due to the hardware requirements making mining feasible have continued to increase at an sudo exponential rate without their participation. To further the STAR TREK analogy, these straggling GPU miners will be droped from the warp conduit simply because they ran out of antimatter while trying to catch up to bigger, faster and more advanced starships leaving them disparagingly adrift forever in the sameness of space as the disenfranchised GPU miners that preceded them.

     This is the type of situation that has historically given rise to desperate levels of poverty in ordinary societies, it is simple economics coupled with human self protectionism. A digital future is our worlds destiny and whether or not bitcoin will survive far into that future is irrelevant, but the conduct of the bitcoin community will greatly influence the nature of humanities destiny within that future and is instrumental in laying the foundation for what kind of society humanities future is built on. So how we, the bitcoin community, behave during this transitional shift has profound significance for the quality of life of future generations. The question I pose to you is this; are we, at this profound and criticle moment in history, going to perpetuate the blind sins of the past because of short sighted self preservationizm and greed (https://bitcointalk.org/index.php?topic=208507.msg2434715#msg2434715) or are we going to create a revolution in the human condition for the benifit of all of man.

     The core principle of Bitcoin ideology is the decentralization of currency, and for what pupose? We all know the answer to this question. It is because we all know the evil that men drunk with power will do to his very own blood let alone what he would do to you. But what do you think it means if crypto-coin mining becomes just another resource that only rich corporations can afford to harvest? How different do you think that this situation will be from the way things are now, or the way things have always been? Once a viable crypto-currency is embedded into a culture it becomes no different than any other essential resource and is subject to the same jurisdictions. If crypto-mining is only available to an elite group of wealthy individuals, then it becomes subject to the concerns of the elite. History shows us that elitist tend to be unfair, greedy self preservationist who are susceptible to and often the very architects of political pressure. Ask yourself this question and answer yourself honestly. If you had invested years of your life mining a substantial amount of bitcoin wealth and suddenly you find yourself faced with the decision to either protect the principles behind Bitcoins Ideology and loosing all the wealth you had worked so long to acquire or forsaking the ideology of Bitcoin and keeping all your acquired wealth, minus some taxes and fees, knowing that you'll likely live well the rest of your life, what would YOU do? Again, history shows what most people would do, its a simple matter of self preservationizm. This is why decentralization is so critical.
    
     I think we all agree that we do not want the situation to get to that point, but that is the course it is presently taking and only together can we stop this decent of such a noble endeavor. So what is it that we can do? In many respects the solution is simple in concept, its the execution thats more challenging. The hardest element to overcome is at the core of the human instinct to survive, and that is the instinct of self preservation. This instinct is of course very strong and because human beings are intellectual creatures this instinct is often triggered when our ideas or sense of self are in intellectual danger even though our bodies or lifes may not be. This is the major cause of human irrational behavior. So for the sole sake of logic it stands to reason that if smaller and smaller groups continue to control larger and larger portions of a finite pool of resources then you either must exponentially increase the quantity of the reasources or you must equalize the method of gathering the resources to a broader group of people. Fortunately in this case the resource is is a fabrication of man.

     So with that being said, lets open this up for discussion...  I release it to the floor...

________________________________

The bureaucratic mentality is the only constant in the universe.
-Dr. McCoy, Star Trek IV: The Voyage Home

Thanks for the advice, I know your trying to help and I appreciate it a lot. If you read a little closer you might see that I already understood most of what you advised.

I see you edited your original post and made some great revisions. Again, great read keep up the good work and post more!

FIXED: The Biggist Threat To My Beer Money And The Student Loan Re-Painment

Good luck with the PhD, you can do it! :--)

The Ninja edit, works wonders when tying to prove you are right!

I see you edited your original post and made some great revisions. Again, great read keep up the good work and post more!

What is actually written is that 'the LOVE of money is the root of all evil.' It is this fragment of ancestrial wisdom that I wish to bring to lite so as to address the logic behind my assertion.

Therefore, I was only trying to be less wrong through clarification, I think this is the process in any honest debate,... No?

You SERIOUSLY need to spend much more time in the Economics/Politics section of this forum. You have a lot to learn. This was a very long and very thought out post, and you should be proud of it, but there are just so many misconceptions in it regarding the way people and markets work that it would take for ever to address them all. Sorry.

“did you say it’s the love of money that’s the root of all evil? To love a thing is to know and love its nature. To love money is to know and love...

Nice concise summary of the function of money but I would add to this concept by saying that money represents time. We spend time to acquire ____________(write anything.) But even this is not quite right, the true equation is

were;

       (life SPENT)  is equal to Life Span - {Life Span + [years:months:days:hours:minutes:seconds of work done to acquire ____________(write anything.)]}

                   and value is equal to (what we are willing to take as compensation for life SPENT that will never be experience again).

Therefore we get this function for greed (if we define greed as purely a moral nagative acquaintances (i.e. selfish action without any real positive or intended benefit for others beyond ones inner circle of acquaintances),

were;
                
Greed is not necessarily intentional, it can happen over time and catch an individual unaware. Yet once at the point of being greedy it is hard to stop because of the human instinct for self preservation and resource protection.

Then why not just make another post with clarifications, or make your edits clear so newcomers to the discussion would see both he original and the edited? To do otherwise smells of intellectual dishonesty, but that's just my 2 satoshis.

By the way, I'll just add that ideally, or at least long-term, bitcoin mining profit should approach zero. It doesn't matter if you are mining with CPU, GPU, or ASIC, as long as there is any profit at all, more people will start mining, until the difficulty gets high enough to where everyone only makes just enough to cover their costs. So in that sense, even if you do get an ASIC, you will rapidly be left in the cold, still, as other people also get more ASICs, and then you may end up with an expensive hardware device that you have no means to pay off.

Human nature dictates that breaking even is not sufficient.

Currently bitcoin transactions must be confirmed and the higher the confirmation fee paid the faster the transaction. Confirmers can set the priority of confirmations based on the amount confirmation fee. This can create the same issue even if all bitcoins have been mined. Those with large confirmation capacity have the advantage.

They could charge less because of the volume and speed they offer yet make more money.

Over time you may end up with large "clearing houses" and few if any smaller operations. At that point the stage is set for a monopoly and price fixing/gouging.

Also, what you express, if true, only holds true with the assumption that only bitcoin is involved or even exists in the future. Even now there are many alt-coins and new alt-coin are being created almost constantly. It is easy to see how relying on bitcoin alone cannot be the answer.

we haven't paid for people efforts and labor in centuries.

 
Of course. We all always strive for more, but there is usually only so much to get,...

This is the way it is in all business: long-term profit tends towards zero, because other companies join in to compete, and drive your prices down until you can sell your stuff only for exactly what it cost you to make it...

This is also what drives people to innovate and figure out how to get just a little bit more than what has been previously available. This can be a more efficient production method, cheaper material, or more innovative product. Those people are the ones who earn more, because they discover something new, that others want, and that benefits everyone, and they do this by using their heads, instead of just their brawn.

 
I don't think "confirmation capacity" is an issue. You can store an enormous amount of confirmations in 2 gigs of ram, and that's a fairly cheap thing for anyone to own.

 
Miners don't charge, they just accept whatever fees are available. They can choose to only accept higher fee transactions, but that would exclude the lower fees from their profits. Everyone else will likely include all the fees, including the lower ones, too. So the only way they can make more money is by having more hashing power.

Over time you may end up with large "clearing houses" and few if any smaller operations. At that point the stage is set for a monopoly and price fixing/gouging.

Clearing houses? For what, mining transactions into a block? How would that lead to price fixing? Unless you are talking about the price everyone has to pay to get a transaction processed (mining fee), and they have a monopoly on mining power (51% of the hashing power), in which case it's a 51% attack that has been discussed at length. Someone having that power will put uncertainty in the Bitcoin system itself, possibly causing Bitcoin value to crash, and would hurt them in the process, too.

 
 
Try to find and read some information online about "network effect." It's what explains eBay, Facebook, Windows, Blue ray, etc. Bitcoin has it, and it's why alt-coins will likely always fail, or at most be second best.

 
I'm not sure what may be happening here. I am wondering if I have somehow connected to a blog from the future! The following statement doesn't seem like the familiar world I have grown up in... "we haven't paid for people(s) efforts and labor in centuries"...? Were do you live cause I want to live there!
 
Obviously you have not worked much as a laborer, I can attest to having to work at mindless, physically demanding jobs that do not justly compensate for the blood (literally) sweat and brawn that I had to provide to make an income, and I assure I am not a centurion so I did not hold those jobs "centuries ago".

 
Yes and no. Generally speaking, people do not put forth effort if there is a guarantee of a loss for their efforts, specifically in terms of not being able to achieve bare basic returns, e.g... making a basic living. Individuals (including those who own or work for a company) who produce a product or provide a service will also try to protect their resources which includes their incomes so there is an incentive to inflate prices, manipulate markets, bolster advertising with exaggerated or false claims and will use many other tactics to at least stay at a level income.

 
Exactly on target, but not quite there. One misconception is the fact that most innovations do not benefit the innovator as much as those innovations line the pockets of savvy business types that pray on optimistic people who have invented something new. Most often what occurs is that a new idea is evaluated by an entity and if its profit potential looks good, that entity will make an offer to the ideas creator to purchase or license the idea. To maximize profit potential, the entity usually understates the ideas potential value, convinces the ideas creator that the entity is doing them a favor by taking a SUBSTANTIAL RISK that may loose money for the entity. Which is just a old salesmens trick used to justify a shockingly low offer for an idea that has amazing potential.

Perhaps, but I do not see how that negates my statements. So lets say at some point memory is free to all, even then being faster than someone else at confirming transactions through the use of more advanced hardware still makes you faster than someone else and that means more volume and higher volume means higher profit even if you have the lowest price (think Walmart). The confirmer at a disadvantage is not the one who charges the least, but the one who has to charge the most.  I don't see what storage capacity has to do with confirmations, at least not for new transactions. Every transaction must be confirmed, so a new transaction must still be confirmed even if the value included in the new transaction was confirmed in a prior transaction. A confirmation uses (strictly speaking) compute cycles just the same. Couple this fact with your statement above about competition and how that spurs innovation and I think you have gone a long ways to proving some of my assertions.

 
I'm sorry, but I do not see the distinction, the ability to choose a payment level for the confirmation service is tantamount to the same thing. Even though miners may passively confirm transactions its still part of the profit incentive to mine and will be the only way to earn money when all bitcoins are mined. So what do you think a miner will do with all that hardware they had invested in so that they could mine? And what will the miner do to maximize their return? Easy, refuse to confirm any transaction unless it is some X% of the transaction, or at least set transaction fees much higher than they are currently. Seems like something you get in the mail from your bank telling you that they are unilaterally raising every fee they have and saying its necessary. Once enough people decide to do the same, then you have a base rate that almost all charge for the service. Except those who have the fastest confirmation speeds, they might charge around 3% less. Even though 3% doesn't sound like much, its still the lower fee so do you think most people will decide to pay that 3% more or the 3% less? Thats how it works today in all the fiat systems.

 
Yes, thats correct, but rather it is more apt to call it a "confirmation fee." On the 51% attack, as I understand it, thats more like theft. Think more along the lines of "The Big Three." Most major industries have three top selling companies that control the majority of the market for their product. A 51% theft would require a collusion of the top confirmers to agree to conduct the theft and is less likely. But why bother with a 51% attack when the largest confirmation clearing houses silently agree to fix prices? Will it happen that way? I duno. There is historical precedence for this type of activity, so, would you prefer to just close your eyes and pretend the risk isn't there or would you prefer steps are taken early enough to negater the risk as much as possible?

 

 
What makes you so sure that bitcoin will be the sole survivor. You don't think crypto-currency can be innovated any further?

 
What makes you so sure miners will not abandon bitcoin in droves when you can't mine it anymore in favor of some other crypto-currency that lets them return to mining for profit?

 
 If to many jump ship who will confirm all those transactions?

 
Do you think people wont just switch to the new pop currency or do you think people will just love bitcoin to much to let that happen?

Well, yah.  That's what I was thinking.  Obviously intelligent and capable, but not having read Hyack, Simons, Grisham, ... wait...

That's a lot of work.  How about just checking out some Peter Schiff youtube videos?

or some other youtube?  What's the quickie intro to economics of the under?

     I am a college student studing for a double major (computer enginering and physics) and working towards an eventual PHD.

The proof of work mining should be used to balance the network, otherwise the network with naturally clump into larger and larger nodes. That's why a good businessman is all about connections.

I'm not talking about penalising nodes for being big, I'm talking about load balancing to cancel out the natural network effect.