Bitcoin Forum

These are just my feelings on the whole Idea of Bitcoin. In all honesty I see a very hostile environment. As a new person to bitcoin I can't see this as a welcoming forum. I see the same as every other aspect of society.

The leaders seem to be on the take, the manufactures of devices either only accept bitcoins which someone who is starting does not have or accept pre-orders and ship after ROI has almost vanished. The difficulty is rising so fast that in order to make more than breaking even one must make a large sunk cost to have any chance.

There is no avenue for small investors that empathizes with the motto of Bitcoin decentralization. At the same time I don't want to say I am naive to believe that companies and or organization would give out free opportunities. So why would anyone want to invest in something that is so hostile to new people.

As the only reason why I sit here on this forum is to see how this all ends up. Me being curios is the only reason as to why I sit here and watch the worst of humanity conducts its business.

GPU's are dead
small Asics are sold in large batches to stay above the difficulty curve to be able to make money. I don't know about you but I don't trust group buys
Asics are going to less decentralized members

There is no room for me. To be honest I think I never was in and although I have tried and have given bitcoin more than enough of my attention I have seen the worst in people.

I'll watch some more and then go on to other things. Hope that does not happen in a large scale.

Bitcoin is money, not an investment opp.

And, you will experience whatever your mind focuses on.

+1

I completely agree with this. If your interest in bitcoin is because you think you can make a quick buck, you're here for the wrong reasons. However, there are still opportunities to make money in bitcoin, but it should not be viewed primarily as an investment or get rich quick scheme.

It's actually both.

Do not buy bitcoins at the current low price.

You mean: leave more for me? ;)

You're kidding, right?  Anyone in the world, anywhere in the world, with as little as a couple hundred $ to invest can have their own mining rig set up and working for them.  To invest in bitcoins you need nothing more than your own computer and an internet connection.

;)

Sell some junk on Bitmit if you want to earn coins

No that is not true. I have mined litecoins and bitcoins and many alt derivatives of such. The investing of present computer power is wasted. I also said new to bitcoins.

GPU's are out. Obsolete. Asics are throwing difficulty higher and faster than before when GPU's were all the rage. 22% jump in difficulty every 2 weeks is very hostile to any miner. Especially the emerging miner as I was.

Litecoin difficulty has only been tempered due to price of under 3.00. There is no place in which a new miner can fit in when old miners are in flux between bitcoin and Litecoin.

The alternate coin currencies get their value from Bitcoin. Alts are never worth mining unless you hold and you need to understand which to hold. Spending 200 dollars in electricity on a hunch that it will increase is not what I consider an investment.

Although I sound bitter I am not I'm giving my perspective on this whole idea. One I see very hostile to new comers.

you seem to have a one track mind revolving around mining.

bitcoin is a whole economy, imagine it like a new country being born with its own currency. there are training opportunities, retail opportunities, manufacturing, freelance opportunities, etc etc. the bitcoin world is your oyster. if you can't afford a mining rig then set up a shop selling groceries, clothing, DIY products, rent out apartment complexes, offer many other services like electrician, cable TV installers, plumbers.

bitcoin is not just about mining

Nothing guarantees the value of the coins that you mine so mining has never been an investment, it's always been a gamble.

Get over yourself thinking that you've missed out on something. As a newcomer to Bitcoin (or any of the other alt coins) you face the exact same risks as all the newcomers who came before you.

this. Why everybody wants to invest in mining. Sure its great because you set up your miner like fire and forget rocket and just count your bitcoins. But people really need to offer more services for bitcoin than just mine. Most people would earn more if they sell stuff for bitcoin or just buy bitcoins instead of mining rigs.

Keep in mind that it might just be a bubble - people might be expecting a high ROI on their mining gear that will never materialize, so they buy on credit. The guys "selling shovels" might be the ones getting rich today. During this time of year mining will be more profitable in the southern hemisphere, and even poor Australians have enough credit to buy an ASIC rig.

If you feel like the numbers aren't adding up, you could be right. The price will never be perfect, but by saying "enough" you're contributing useful information that will prevent it from becoming that much higher. If you could ALWAYS make a profit by mining, something would be wrong.

I don't mean to be hostile, as that would be essentially proving your point, but the one thing I see over and over again regarding "investment opportunities" and purchasing mining rigs is a cost-effectivity analysis regarding power usage, cost of hardware, and projected difficulty.

While all of that is true, the issue is the barrier of entry to purchasing bitcoins directly, legally and safely.


There is only incentive for those who are mining to not encourage others to mine. Bottomline.


The often omitted fact is that you could essentially project bitcoins to multiply in value over the next few years. Remember the bubble projections of $1,000+ by January 2014? How about by January 2020?

At that point, sure, mining is still less efficient than purchasing outright. But it is far more self-sufficient and doesn't have the tons and tons of issues people of all "skill level" have encountered. Yes, you're converting electricity bills and equipment into BTC, partially, but the point is the BTC have the potential to multiply in value.

Some folks like the idea of mining versus the risk/issues involved with purchasing outright.


And to qualify your statements further: sure, bitcoin mining is hostile to newcomers. So is gold mining. So is inventing MooCdollars.

But bitcoin itself? The main hostility here is that "most people" are currently resigned to accepting fiat, centralized cash, zero privacy for consumer protection and whatever fees these tools we need declare fair.

Bitcoin as an internet bartering system where you are using digital tokens when providing services or goods is fine. But the folks who are currently using bartering systems (that haven't been shut down as illegal) are not necessarily computer savvy, they're more hippie-ish and communist. And then the vast majority of people need that exchange between fiat and btc in order to make use out of btc.

since, again, most people in the world don't offer "goods" or "services" outside of where they work, that isn't exactly an inviting loop, because money always involves other people. You're telling PERSON A to invest in a system that requires PERSONS B-ZZZZZZZZZZZZZZZZ to recognize its value. That is where the hostility comes into play.


FUD against bitcoin, perceived hostility against bitcoin, and the few places on the web where there is consistent information about bitcoin mostly being flat out garbage, are a counterforce to the steady adoption rate. Add in the clear incentive to keep anyone adopting it out of the picture as long as possible for those using bitcoin strictly as an investment/profiteering instrument and of course it seems hostile.


If you, however, consider bitcoin to be the asking of the question "What if bitcoin...?" then here we are. Any assertion as to what it is supposed to be or do is fair game, and there are forces that have more authority or influence over that than say, you or I might have. In the end perhaps where it ends up and why it ended up there will be transparent and "known to all."

But, I mean, crypto... so, you know, "they" will be sure to spin the eventualities to "their" profit. Seeing as how excruciatingly near 100% those engaging with bitcoin, watching it, whatever have 0 idea of its true origins and steering, and any answer as to what it was would always be doubtable... in short, no, we can't know these things. So making assertions about what it is are equally fantastic, because any individual might have a unique experience based on so many factors... the "general experience" is irrelevant.

This forum is not Bitcoin.

Nor, if it's ever going to be generally accepted money, is mining Bitcoin.  Mining remains a considerably high risk activity that many will not engage in.

If you don't want to mine, just buy a few bitcoins and operate a bitcoind node.

Oh, another one that goes away after realising he will not get rich in 2 weeks, but not before posting to the forums how disappointed he is with this whole bitcoin thing.
Godspeed!

If we go with your "new country issuing its own currency," we wind up in this ridiculous place:
Imagine a new country is born, with no industry, no possessions, and ... no land, and starts issuing its own currency -- BTC.  When other countries, in an understandable state of wtf, ask wtf, the new country tells everyone else to start (your list of suggestions to the OP).  
Please understand that currency, to be accepted, needs *something* to back it -- cows, land, threat, *something*.  You're putting the cart before the horse -- first currency, *then stuff*.

The way I see it paranoia will be the destruction of Bitcoins. Everyone has NO TRUST in ANYONE.

You're right, the state of mining is rather sad right now.  But it is a competitive industry, by design.  No one is guaranteed a profit.  And there's not really even much reason for hardware manufacturers to sell their designs to you.  So, if you can do better, do it.  Otherwise, what do you want us to do?  The point of Bitcoin isn't to attract newcomers.  It's to have a free economy.  This is what it looks like.  It's not always perfect, but it's getting better.

  So you expect me to believe that people will just mine these coins for free? Last time I checked mining was an integral part of Bitcoin and with out enough miners you can't even service all the transactions passed to buyer to seller. I'm may be new to mining as I have only been doing this for about 3-4 months however I understand many aspects of crypto currencies. I understand how they work.

I am seeing a disturbing trend of hostility towards miners. It was open to anyone who could put a computer together however now asics are very narrow and unavailable to all. Only to people who are willing to put down large payloads of money. This is also in the light of possibly losing money through a difficulty increase that is jumping at a rate that will be a surprise to many. This is not a healthy tred imo.

Now lets say this continues for while and everyone begins to look at their expense report after a year only to realize that the money is not in mining. What happens to bitcoin and litecoin?

I have stopped mining for over a week now. How long you think my wallet will take to be removed?  How many other people will move on if they can't have some of the pie? Do you see my point now? Less miners less pools less people using wallets less decentralization.

I agree its a competition. I was told we were decentralized but this is turning out to not be the case. This trend will hurt in the long run. There is nothing that can be done. I know that I also know that in the end it will not be a surprise to see large players in charge of transaction processing(fewer players as well). Is this acceptable to you?

Let's use an analogy to see clearly what's going on.

Imagine a large gold vein is discovered in a nearby mountainside.  At first the gold is so plentiful that anyone can get in with nothing more than a pie pan and pan for gold (CPU mining for BTC), and make a profit doing so.  People see these other people mining the cheap and easy gold and jump in, but the cheap and easy gold starts to go away, and mining becomes more difficult.  Mining with a cheap pie pan isn't worth it anymore, so some people quit, while others buy more expensive equipment, say a sluice or dredge and get to work obtaining the more-difficult-to-mine gold (GPU mining for BTC).  As more and more gold is mined, eventually even this equipment doesn't get you much, and now folks either have to buy more expensive equipment to mine the gold, or quit.  Some people invest in large scale mining plants to get the difficult-to-mine gold (ASIC mining for BTC), while those with pie pans complain that it's too hostile for new miners to make any profit.  They have no right to complain, the time of easy pickings is gone.  Does this mean that gold will cease being a valuable currency?  No, it just means you either have to invest real money into machines that can mine profitably, or don't mine at all and just buy BTC outright.

Every node verifies every transaction. Mining just establishes the order in which transactions are processed. Not that I think this hyperbolic scenario is likely, but even a single dominant miner could handle the exact same transaction volume as a thousand miners. Pool operators pretty much do this already.

What's so hard about buying a single USB miner stick secondhand? Do you think mining hardware speculators are all conspiring to charge more, or do you think the price will reflect the risk/time/effort involved in buying wholesale from a manufacturer?

anybody who is quiting bitcoin, feel free to send me you unwanted coins and fragments. account in sig.

I really like your analogy, here in Central South Australia there are lots of isolated, heavily guarded, gold mines, where mining companies have invested hundreds of millions of dollars to extract Gold and Silver Copper and other minerals, I liken them to the ASIC miners for BTC., (btw, they provide lots of employent in the meantime, plus royalty cheques for the local landowners) every one benefits, including the economy.

Meantime there's old mate in Central Victoria, who makes a very nice living panning for Gold, and has done so for years, problem is, he's the only one that benefits, not even his family as he's a single bloke, I liken him to a GPU miner.

To my mind the ASIC miners are an integral part of BTC, without them BTC will founder and if you follow the block chain to its logical conclusion, eventually, (not in my lifetime) the only return the miners will get is the transaction fees.

Sure the big miners make huge profits, but in the meantime everyone benefits, no doubt several people will tell me this is not a good thing, but then I'm not an economist, but ever the optimist.

Conspiring? No I don't think that at all. I just would not support bitcoin if it was centralized with a few mining farms. You make it sound like mining is not a very important part of bitcoin. I'm just saying that it will come to a point where the effort in keeping miners will be a concern and by then it will be too late. The trends of bitcoin losing smaller miners is not something that should be taken lightly. After all it was a big issue at its conception.

I know it seems petty now and not very important but this is just the begining of Bitcoin's start with Asics. Difficulty has jumped higher and quicker than it has ever. To all those that are saying just send you coins if your leaving. You may get your wish as many more people leave they will leave all their coins for you.

If no one uses the coins then what value will it have. Have you seen bitcoins price? It can't get any higher than 100 lately, and it won't until asics find it difficult to mine enough to hord them. They won't if the price keeps falling or stays put. After all they have to pay for the miner. You know that dam ROI.

Just a heads up when people can't win at a game they tend to leave. If they feel they have not had a fair shot they refuse to use it.

You can get 5GH for only $350, so ASICs aren't only for a handful of people.

I guess that's why we all use gold to buy our gas and groceries. I have to admit this is a very good analogy like NedKLee said however gold does not need a miner to process transactions. However gold is called a barbaric relic now by the central authorities now. Will bitcoin be a barbaric relic or worse a fad that weened away to another system that has been created with a central system just like bitcoin would be soon?

Yes I understand that but do you understand that with difficulty jumping at 24% every 2 week the time from profit to break even will be shorter. Its not like GPU's took over a year to realize you need equipment. Every time a new technology shows up the diff shoots faster and high than before. It will come a time that the money you make will be needed to purchase new equipment and after all has been said and done you end up playing a zero sum game. This will also get to a point where instead of many miners it will be fewer miners and so on.

Like the central banks of today right? Is it not that the reason why bitcoin was created to combat that very thing? So why are we mining a decentralized currency?

Exactly, just like central banks or even political parties both want us to believe wealth will trickle down (we should know better by now) ...

Don't like a pool go mine on other pool ... That is like telling a us citizen to go vote for 3the party ... and like they experienced in Belgium, if that third party ever gets a big vote count the others will just ban together to keep them out ... Decentralized my ass, Just like current democratic political/economical system, It was a nice concept but it failed. (or is failing/ slipping away)

You see! Someone else gets this. I believe after a few years under our belts we get the picture. Also as I was saying before when a bit of time passes and enough people see that mining is not profitable the very few will be left and the rest move on and leave the few with the most.

Which will later be seen as of no worth.

This is sort of like gold has lost all its value and nobody can buy or sell it any more because it is difficult to mine?

Eh, more like he's saying that it's so difficult to mine that it's all controlled by a few people.  I think diamonds are a better analogy.

Reminds me of Occupy Wallstreet Sentiment.

Is this the start of Occupy Bittalk??

Reminds me of a movie: Oliver said "Please sir can I have  bit more ?" ...


Tarnished Image - Bitcoin Promotion:
* Anonymous: Fail, at best it's pseudo, but with current generation of exchanges even that's gone. (at least for masses)
* Decentralized: Fail, with pools the power ends up in hands of few ...
* Micro Transactions: Fail, with anti dust changes micro transaction will be unprofitable.
* Everyone can participate (vote): Fail, you need to buy specialized hardware to have a chance.

With every chance we had to improve some of these key benefits the exact opposite happened as a result key benefits are being removed one by one. Whats next ? I don't know ...

Bitcoin is designed to make mining a zero sum game. Saving/exchanging is more profitable when you use a currency with a lower miner surplus.

How far are you extrapolating? If BTC ends up anything like gold, IMHO there would be plenty of miners:
http://en.wikipedia.org/wiki/Gold_mining#Business
http://www.24hgold.com/english/listcompanies.aspx?fundamental=true&commodity=PL

Basically I think we don't need to be as decentralized as possible, just decentralized "enough" as defined by the consumer market for cryptocurrencies. There are plenty of other coins that are ASIC-resistant if and when this becomes an issue. If you think there's a systemic risk in BTC's security model that is less pronounced in other coins, you might want to convert a portion of your savings.

That's simply false.


Gold value doesn't depend on existence of miners for its value.  No miners -> gold value goes up.  No miners -> Bitcoin value crashes.


That's false in many ways.  The most obvious being that the market can't "define" anything.  The only way for a market to signal dissatisfaction is through lowered interest (lowered demand -> lowered value).  That's simply not eloquent enough -- a huge dump on MtGox crashing Bitcoin prices doesn't scream "decentralize!"


A frightening argument, that.  Along the lines of "when the boat starts sinking, just buy a different boat."  (Protip:  The best time to sell your Titanic is *before* it hits an iceberg.) ;)

If that were the case, all trade via bitcoin would cease. There has to be some level of trust for any trade at all.

mooc I get it, so listen and dont take offence to this. youve been around long enough to think you understand enough of bitcoin but you dont. you think youve done enough research but you havnt. your at the point of disillusion and frustration but there is light at the end of the tunnel. Learn more and research more, Dont get down in the dumps due to your current level of understanding, as you learn more that will change. Do yourself a favor and dont get too focused on the ideas you have now where you have to defend them to the death because i can almost guarantee everyone here has been wrong about allot of stuff relating to bitcoin at some point in time. This rise in the hash rate has been expected from the start and its still got another 700-800TH/s to go before it will even have a chance of leveling out. ultimately prices of asics, competition and efficiency will weigh in on this. but for now we have a unknown number of random people pre ordering asics for an unknown profit margin in the future. people are guessing they will be able to make a profit or are planning on waiting for prices to go up more to sell those bitcoins. its all about research ans risk assessment. Personally i chose not to ride that crazy train, too much risk for me.

I hope you stick around and find something else to focus on. there is allot to bitcoin, certainly allot more then just mining.

Exactly!

:)

This is very true!

Say this would be true. How will this destroy anything?

What do you expect? Free money for everyone? You need to step up your game, if you want an edge. Why should you be previleged in contrast to any other miner? If you want to earn, you why have to stand out. Even with an increse of 24 % there will by ways. Why do you dislike chip sell and groupbuys? It's the cost efficient and best technology you (and almost any other miner) can buy right now, so your "share" should be "fair".

Higher difficulty will decrese miners? So will the difficulty afterwards, which makes that argument invalid.

Anyway, I feel your frustration and if you don't want to invest in something risky as mining, you could invest in mining companies like ASICMiner for example. They have a great history and honor transparency, without much effort you should be able to see, that they actually pay most of the mined coins to their shareholders.

Many may say we all should still consider ourselfs as the lucky ones, who saw the oppertunity Bitcoin early enough, even if it's already 2013. :)

To be honest I don't take offense to someone who has an opinion on things and delivers it this way. I also don't want to create the image of me being angry or fustrated or like acting like a 6 YO. I was only trying to say I see a trend of the way bitcoin was moving. I see this spurt of technology as a necessity but where I see a problem is the amount of technology as the disruptive type.

I find if they came out in a slower pace and gave people time to digest it it would have been even better for manufactures and bitcoin. Instead of coming out with Ths units made them the same and gpu's without the power consumptions of a gpu. Making small increments of power and slowly drawing more people in to the bitcoin community. This would strengthen the base.

What they are doing here is more harm than good.

I see in the future the miners that are jumping in now will need to get a second generation asic before the 1st gens have paid off. the jumps are just too quick and will be to often.

heh If I was a conspiracy guy I would almost think it was intentional to weaken bitcoin. Then again it could just be greed and lack of regulation of bitcoin and just plain human nature.

I really am not much for conspiracies.

Here take a look at some of the history
http://i1343.photobucket.com/albums/o798/buddy3315/Bitcoin%20charts/aug312011_zps312612b4.png (http://s1343.photobucket.com/user/buddy3315/media/Bitcoin%20charts/aug312011_zps312612b4.png.html)

http://i1343.photobucket.com/albums/o798/buddy3315/Bitcoin%20charts/may272012_zpsa7155fa5.png (http://s1343.photobucket.com/user/buddy3315/media/Bitcoin%20charts/may272012_zpsa7155fa5.png.html)

http://i1343.photobucket.com/albums/o798/buddy3315/Bitcoin%20charts/june132013_zps2f8b60ce.png (http://s1343.photobucket.com/user/buddy3315/media/Bitcoin%20charts/june132013_zps2f8b60ce.png.html)

We have no restrictions on price and no restrictions on power consumptions and this next ride up will be 3x higher and 3x faster. So I believe you will need to invest 3x more hardware to stay relevant (notice I did not say profitable)

This will only mean less decentralization and counter to what bitcoin is (ideology or not)

Care to elaborate?
This post elaborates the concept pretty well (https://bitcointalk.org/index.php?topic=235045.msg2490685#msg2490685). Based on what I've read here for the last couple years it looks like a consensus that mining profits tend towards zero and that's a good thing.

"No miners" is hyperbolic. Would a single firm would be able to organize itself efficiently enough to eliminate even anonymous illegal foreign competitors? I can understand if you don't already have an exact projection, but what order of magnitude are you seriously suggesting this will reach? 10, 100, 1000 firms?

Sure it does! ASIC-related security problems would be a clear reason to dump Bitcoin and buy Litecoin, and you'd see the two prices change relative to one another. Right now LTC/USD closely follows BTC/USD, but that's because ASICs aren't really a problem yet and they're both equally influenced by FinCEN and Cyprus. You'd also see a lot of Bitcoin users pushing for a hash algorithm switch, and the chain would fork - before block X we use the unfairly exploited old SHA256, and afterwards we use scrypt. Mining cartels would obviously support the old chain, but be unable to 51% attack the new one. If you were asleep when it forked you'd own coins in both chains, and then vote with your wallet as to which security model is better.

Are you suggesting people shouldn't diversify because accepting the truth that BTC isn't a 100% reliable investment is frightening? Use today's best coin as your means of exchange, and tomorrow's possible coins as your store of wealth. Many brick and mortar merchants already hedge their bitcoins in local fiat currency, so they'd be largely unaffected until they switched to whichever new cryptocurrency their customers want.

If it's not self-evident, the difference between "zero-sum" and "Tend[ing] toward zero" is the difference between making nothing and making something.  To make this clearer, repeated an infinite number of times, the first gets you (zero times infinity) equals zero, the second gives you ... you guessed it, no need to write it out -- infinity.


Either you misunderstood me or vice-versa.  I'm not exaggerating, i quite literally mean "no miners."  If mining is not profitable, and we discount fetishists who enjoy spending huge sums of money on specialized silicon in hopes of eventually breaking even, we can assume there'll be no miners.  Don't you agree?  
If there are no gold miners, goody for gold.  If there are no Bitcoin miners?  No Bitcoin.  That's all.  Nothing hyperbolic.


Wait.  You're saying that an exodus of Bitcoin user base to Lightcoin, accompanied by dumps & hard forks, is just the market's way of saying "hey, perhaps some change might be nice"?  You're suggesting that what comes out of the wash -- a totally different coin relying on scrypt -- is *still Bitcoin* (or, rather, *two distinctly different Bitcoins*)?  And if that fails too, and people go back to paper money, would that too be called "Bitcoin"?
Arguing in the alternative, the forking panic caused by forking will abso-forking-lutely fork the value of Bitcoin.  The streets will be littered with paper wallets, and street sweepers will praise their patron saint, Mr. Clean, for virtual currencies not printed on paper.  TL;DR:  Won't be smooth or pretty.


If you're arguing that Bitcoin's not 100% reliable as investment, you're arguing with the wrong guy.  I'm not even sure if it's a *sound* long-term investment, though that's another topic.  I'm simply saying that it's unreasonable to assume that selling will always remain an option.  With no security flaws in sight, unloading just a few grand on Gox will send the price plummeting.  Now imagine the panic a fundamental security flaw would cause.  A real clusterfork.
Finally, i'm just not buying the "many brick & mortar Bitcoin merchants hedging Bitcoin with fiat."  My first gripe is with the word "many."  If there aren't many B&M Bitcoin merchants, there couldn't be many that hedge their bets.  

Digging a bit deeper, these Bitcoin merchants you've mentioned are no more Bitcoin merchants than the carnival hucksters are "ticket merchants."  Yeah, a carny huckster accepts tickets for rides & plushy toys, but in the end of the day, he exchanges those tickets for $$$.  When he services the rides & pays for gas & electricity, he pays in $$$.  Just like your B&M Bitcoin merchant accepts Bitcoin, but when it's time to stock up & pay the bills ... that's right, $$$.  Something like that.  

Check out alternate cryptocurrencies section for alternatives, almost too many coins there, id only bother with thise still actve a month after release

Crumbs -

Since you think there will someday be no Bitcoin miners, for reasons that won't hit Litecoin for years, let's bet on whether or not Bitcoin will exist in X months (your choice) and denominate the bet in Litecoins. That way you'll get paid for being right, and I'll pay for a lesson the hard way. Does that sound fair?

IMHO someone will probably find a weakness in SHA256 someday and we'll have to switch hash algos anyways. Without getting all "Ship of Theseus" on you, I don't care what we call it so long as it works similar to how Bitcoin does now. Everyone freaking out and throwing their paper wallets on the street just seems kind of silly to me; BTC is no stranger to crashes.

If any merchants reading this are actually worried, you might want to read this:
https://en.bitcoin.it/wiki/How_to_accept_Bitcoin,_for_small_businesses#Setting_Prices
BitPay for example can hedge your BTC/USD risk with minimal hassle.

That sounds more than fair if you're trying to judge how easily i'm tempted into betting, though i'm not sure what my tendency to gamble has to do with this discussion.
I get paid for being right in other ways, and, having never met you, i've absolutely no interest in making you pay -- the hard or any other way.  If this is the level of debate offered by an average Bitcoin supporter, Bitcoin's future is shakier than i guessed.


 :D I was being hyperbolic there. ;)


Don't worry, it's a safe bet that no merchant is. (that's a figure of speech, a colloquialism -- i ain't betting)   Oh, gox looks like it's back up!  Joy!  I gets to live another day :D

Gambling is such harsh term. Think of it like insurance. Since we can't trust each other I'd be perfectly willing to agree on an escrow or something similar. I can't speak for other Bitcoin supporters, but I'm willing to actually put my money where my mouth is when predicting (or denying) zero miners. Perhaps Bitcoin's future would be less shaky if I were all FUD like you?

I mean this with all due respect, but it sounds like you have no idea what you're talking about. You're waving your hands talking about zero and infinity, unwilling to quantify a useful real-life prediction.

Of course.  That's why i'm going to offer you two possible alternatives as to why you can't make heads or tails of what i'm saying:
One possibility is i'm a babbling boob spouting gibberish, so there's nothing to get.
The other (protip: this is the right one1!) is you're simply not bright enough.  I mean that with all the respect due you. 
Good night.

You guys make me laugh. lol It always end up the same way when two people argue. Its not important who is right or wrong. What is important is we offer opposing opinions on a forum to exchange idea's. I don't expect anyone to accept what I say and it would be even more idiotic to believe I can force someone to accept what I say as fact.

If we can't convince the other person I won't hold it against anyone. You guys need to kiss and make up. lol or I'll bust a gut laughing.

You don't really think that we're growling & spitting at our monitors as we type, do you :D  or  ??? :o

Suck it up buttercup. You can't be a milk toast and expect to play in this sandbox.

So you mean "literally no miners," but then your definition of "no miners" means you just ignore miners if they include people you disparage.  That would not be "literally no miners" in any sense normally understood.  That would be a small number of miners.  If there were a small number of miners, the supply would be reduced.  If any demand remained, that would increase the price by simple, inflexible laws of supply and demand.  Eventually, the price would be enough to encourage people to mine again, or the remaining miners to step up their game and do more mining, at which point they wouldn't be "fetishists."

So long as anyone is actually mining, you can't have a "literally no miners" situation without changing the meaning of the words.

If nobody is mining then the difficulty will be so low that I'll start solo mining and clean up.

Solo mining at 19m difficulty would likely take you many years just to find that first 25 BTC.

I think you missed the point.  OP seems to think mining will get so hard that all the miners will leave.  If a large amount of hashing power goes offline difficulty will fall.

That is what the OP seems to be missing.  Only a small % of users will be miners.  I mean there are 7 billion people of the planet, there aren't going to 7 billion bitcoin miners.   If there are "too many" miners the ROI will suck and some will drop out, if there are too few the profits will be very high for those who do mine so more will join.  The idea that everyone needs to mine or Bitcoin will fail is just silly.

No that is simplistic.

Higher difficulty = Less miners = less hashing power = longer block interval = lower difficulty
Lower difficulty = more miners = more hashing power = shorter block interval = higher difficulty

The idea that you would ever get to no miners as in literally 0.0000000 GH/s mining is just nonsense.  The first miners have sunk cost.  Once you have hardware your ongoing cost is just electricity.  So long before existing ASIC miners become unprofitable new miners will stop deploying additional ASIC rigs slowing the rise in difficulty.  Even if difficulty so overshoots to a point that some ASIC miners are unprofitable those with lower electrical costs will still be profitable. The highest cost miners will shut down their rigs, difficulty will fall, and the margins for remaining miners will rise.  It is likely this will also overshoot, difficulty will fall far enough that the profits for remaining miners is "excessive" this will encourage more miners to go online (possibly buying rigs second hand) raising difficulty and lowering profitability all over again.

Please describe this scenario where all miners simultaneously stop mining and network hashpower goes to 0.000 GH/s.

 

Oh gotcha - of course. And after it starts falling, more miners would probably come back again and we will get some kind of equilibrium.

Stupid thread alert!!

Please check https://en.bitcoin.it/wiki/Mining_hardware_comparison (https://en.bitcoin.it/wiki/Mining_hardware_comparison) and http://www.alloscomp.com/bitcoin/calculator (http://www.alloscomp.com/bitcoin/calculator)

You can still make money with GPUs mining litecoins AND Bitcoins. Even if it takes you a whole year to break even, you're still doing better than most startup companies.

People who say that GPU mining is dead are either stupid or too noob to realize that the price increases in bitcoin will recoup their costs faster.

OMG what is going on here?

What I meant was that the rate at which the difficulty was rising is the result of fewer miners with larger hashing power. Now that is not really the problem or the concern but a side effect of human nature according to competition.

My concern was the rate at which this is being allowed to go ahead at where the increments at which we are doling this new technology is causing negative effects. The effects I am concerned about was the ever shortening time spans in between the ROI of these miners.

GPU's are at a point now where you burn more electricity cost than you receive in BTC/LTC or what ever currency you mine. This was a regulator on BTC difficulty. When BTC rose in price from $13 to $120 the difficulty increased as more GPU's came into the fold.

Litecoin was GPU resistant until the mining software was adapted to GPU's and the difficulty began to rise when the price spiked from 0.06 cents to $6 dollars. However Litecoin dropped to $3 dollars for a while and stalled the difficulty rate. Now at $2 dollars GPU's will never generate enough to pay for its self UNLESS your a big enough of a farm to offset other smaller miners out of the game.

Bitcoin is a unique contender as ASIC's move in the price is not a limiting factor and the cost of electricity is not a limiting factor as well. This will just make the bitcoin miners with 1st gen asics the sole players with no limits. This will make the difficulty jump higher and faster.

Will there be less miners? Will they be trading in their 1st gen asics to get 2nd gen asics? or will they sell them second hand to other people even if they can get higher discounts trading them in to get their hands on 2nd gen asics? So was anyone able to buy a 2nd hand BFL FPGA in the last 6 months for a lower price than what they were being sold by BFL new? The values of used FPGA's were still too expensive because BFL was giving great trade in prices.

So don't expect to buy used asics for cheap now. If that trend continues......   

BTW true cost of electricity its the amount due / the kilowatts used. That includes the taxes and all the other bullshit they add on your bill. So don't give me that I pay only 0.06 / KWh.

In Toronto we have 4 tiered rate for different times the electricity is being used.

0.07
0.06
0.05
0.04
plus taxes
plus deliver
plus line loss factor
plus I'm just a stupid slave that accepts all kinds of bullshit on my bill and never complains cus I'm just and idiot....

You get it the picture.

You're absolutely right, above quote was a reply to a user who was arguing that if mining profitability tends toward zero, mining is a "zero-sum game."  My response is a hypothetical, highlighting the absurdity of that assumption.  By definition, a zero-sum game's profitability is provably 0,* which makes it as sound a business as tossing a coin & expecting to profit by betting heads. 

The miners/ASICs scenario you're describing is also not without flaws, though these flaws are rooted in different assumptions.
You assume the smooth negative feedback model.  At least that's the model that comes to my mind, the standard market self-regulation.  For me, that's similar to a feedback loop in an op-amp, or a centrifugal governor on a steam engine (Yeah, i know, but bear with me :D  I'm guessing you're familiar with at least one of the two, they both are straightforward examples of negative feedback, and really handy for modeling feedback systems).  IRL, both fail to stabilize unless all the conditions are just right ( otherwise the op-amp will oscillate, the steam engine will hunt).  For mining example, this implies a bunch of stuff.  The "corrections" in mining also won't necessarily mimic damped oscillations, the swings will increase in amplitude 'till the system self-destructs.*

TL;DR: There are sound models in which ASICs destabilize & crash Bitcoin value.  Being concerned by the impending flood of ASICs is not unreasonable.

*An aside: Any analog electronics guy will tell you that *everything* desperately wants to become an oscillator :D

Then please post your model. Use an equation to describe this behavior and claim something falsifiable with more numbers than zero and infinity.

It sounds unreasonable because the number of entities mining has never reached zero on any other commodity ever, but there have been times when the cost of equipment has gone up quickly.

Edit: bolded to highlight ignored important parts.

Quote from a post you're replying to:
Boldface added for emphasis.

Edit:  Not everything is summed up in TL;DR, that's why i type up the rest of the stuff :D

1) If you add up all the gains from mining, and subtract all the costs, you think this number will be greater than zero?

2) Do you or do you not think the number of miners will ever reach zero? If not, why are you describing what would happen when there are zero miners?

This isn't some electrical system, it's a real life economy with real scalability limits. No one cares about imaginary chalkboard economics - it's that same kind of thinking that predicts all rational actors will hoard a deflating currency.

Yes, ffs!  Unless you think that the $1 billion market cap for Bitcoin is the cost of gear & electricity for the miners up to this point. (HINT:  Daddy, where do Bitcoin come from?  The miners make 'em, Explodicle, the miners.


No. First, see the red text above.  I am describing that scenario to show that your claim -- mining being a zero-sum game -- is patently stupid.  I'm hoping to accomplish that by generating a contradiction.  I fail.  I get bored of repeating myself.  I click the "Change Color" dropdown & choose red.  Did i do any better this time?


Wrong.  People who understand "chalkboard economics," collectively referred to as "the rich," care very much about "chalkboard economics."  It's those who don't get "chalkboard economics," collectively referred to as "the poor," who do not.  It's sad, it seems somehow unfair, and yet it remains true.  These unfortunates often try to validate their simpleminded notions by wagering small amounts of newfangled money they don't quite understand.  More fail and heartache, but such is the nature of free enterprise :)

Yo OP, if you're still around, would you mind moving this thread to the Mining board? Thanks.


If the power efficiency of your rig is great enough to overcome the difficulty of the blocks and gain enough moneys' worth of bitcoins to cover the cost of the electricity to hurdle the variably-difficult block, and then some, the answer will in fact be yes. Obviously, the asic is power efficient enough to do this yet the GPU no longer is. The difficulty will keep rising the more asics people put to work, and therefore the money everyone gets out of the whole ordeal will keep going down until the difficulty is too high for the typical asic to get money out of it. The money that comes out of it has to do with the price of the bitcoin, which has to do with the popularity of bitcoin, which also affects the number of people trying to mine. Everything is interwoven to affect the difficulty of blocks and if you want to mine you will, in some way, have to predict how long your miner will be able to make money. The speed of your miner is completely irrelevant, mind you, that's only relevant to the amount of money you gain or lose, not if you gain or lose it.

TL;DR: It depends on your mining rig.

Mining isn't a zero sum game.  It is a fixed positive sum game.  Maybe that is why you are confused.

A zero sum mining game would be that all miners need to put a certain amount of Bitcoins into escrow.  Once 25 BTC have been escrowed a satoshi is randomly selected and the miner who owns it gets the entire escrow amount.

Zero sum =/= Fixed Positive Sum.

At the current exchange rate the mining "game" has a positive sum of 25*6*24*365*~$100 = $131,400,000 annually. 

Well I guess I should as it would allow others to join in and enjoy MY THREAD!!! lol

Going to move it to mining.

If you throw in the cost of labor, that's precisely what I think. That's why people are spending so much on hardware, because they're factoring in an expected increase in Bitcoin's price.

What makes you think I was only willing to wager small amounts, and that I'm not rich? ;) The chalkboard is only halfway there - the other half is expressing confidence by taking chances. Bets can shed light on a situation when loaded with the flowery language of protips, hints, true scotsmen, and hypothetical scenarios.

Do you have any actual predictions that can be falsified?

Where did you subtract the costs of hardware, electricity, and labor from that sum?

Logic obviously won't win you over, perhaps authority would?  Look at the reply by DeatAndTaxes, a few posts up.  He's a respected member with 10,000 posts to his name.


OMFG.  I give.  You win. ;D

@Mooc

I don't see the ASIC's kicking everyone out of the market yet.  When I started mining, the difficulty was about 10 million, and with my dinky little GPU (6870) I could make 0.0167 coins per day.  Now, with the difficulty spikes, I'm down to 0.0072 coins per day (once its below 0.006, its not worth the power...)

So, if we look at all the ASICs coming out, there is about 900 Terahashes of hardware being built.  The difficulty before ASICs was about 100 Terahashes, perhaps lower.  So, Once the ASICs are all out, we'll be sitting at 1000 terahashes (A whole petahash!).  10x network increase gives a 10x difficulty increase.

Say you get a little Jalapeno (300$, similar to my 6870 being ~300$), with the 10x difficulty, that jalapeno will make about 0.02 BTC per day.  That's pretty much equivalent to the current GPU standard...

I don't believe that the massive difficulty spikes will continue forever, I think they will just continue until all the ASIC preorders are filled, then they will level off, and it will be back to the ~10% difficulty jumps.  And that will bring us back to where we are with GPUs.

TL,DR, ASICs coming out are not impending doom, it's just the next step from GPUs.  It should be equally profitable to continue in the future.

Do me a favor and take a picture of your electric bill and block all your personal information and post it here and lets see what you pay for electricity.

This is how I calculate my power costs. I take the amount due / KWh used on the bill or from your killawatt. That gives me my cost.

I will post mine after yours to show you how much I pay.

As for the OP I was stating a trend that the jumps between technology spurts are making ROI difficult due to a shorter time spans between jumps of difficulty.

Most 1st gen asics will not pay for them selves if you buy them now.

http://s2.postimg.org/nid0hsb9h/Capture.jpg (http://postimage.org/)

I live at home, so technically my power costs are 0.  But, I get power for 0.08$ a kwh, and my computer uses 350 watts. So, 0.35kw*24hours*0.08$ = 0.67$ of power per day.  I haven't checked out my rig with a killawatt, I've just estimated the 350 watts, seeing as the GPU takes 100 watts running at 100%

EDIT:: You may ask where I get 0.08$ for power.... Canada!
EDIT EDIT:: I ran these initial calculations with the coin price at 120$... So I guess once I get below 0.007 BTC/day its not worth the power...
EDIT EDIT EDIT:: Also, you can run a Jalapeno off of a Rasberry Pi... So that power consumption is tiny, less then 50 watts, which for me is less then 0.10$ a day for power.  I'm waiting to see if BFL ever ships, and once they start catching up with orders, and as long as the difficulty is less then 200 million by then, I'm buying a Jalapeno to continue my small mining efforts.

And then JP Morgan and HSBC started manipulating the gold price and supressing it so all gold holders lose value. In the case of Bitcoin that would be big investors like Peter Thiel and the Winklevii. Common people will always lose. :(

My barber found a tattoo just like that on my scalp the other week.
Could be a bad OMEN ;D

Distrust of your peers won't bring down bitcoin but it sure won't help it get anywhere. By that I mean more focus should be on how to sustain bitcoin in the long run. Dying GPU mining means fewer miners with ASICs becoming more common so more future bitcoins for fewer people. Fewer coins being mined to cover costs. Transactions per block growing too quickly for current 1MB size limit (increased size will hurt smaller pools but most people don't give a shit). Lost coins (a significant amount of the 11.3m -ish coins currently). We get fair discussion on these items but they are overshadowed by flaming competitions among the large drama user base over future predictions to the point that it's not worth discussing any new insight. To quote a work saying I know, negativity kills productivity.

I think this is the biggest challenge of bitcoin though I'm hopeful that with an increasing difficulty will be good for the community. Less complaining originating from miners looking to make any money at all and more on uses for bitcoin and solving problems like the sliver above. I don't think bitcoins should really be viewed as a way to make money at all and I only support covering transaction costs in the long run (no problem with speculation though for making/losing money).  

In addition to block size increases, there are a couple improvements coming down the line to help with transaction volume:
1) Micropayment channels will allow sites like Satoshi Dice to compress each customer into a single transaction per block.
2) Off-chain transactions will be much more secure when they start using multi-signature transaction to hold funds.
Hopefully (fingers crossed!) these will be in easy-to-use clients before Bitcoin gets much more popular.

how exactly does that work?

what is a 'multi-signature' off-chain transaction?

This video helps explain multisignature transactions and micropayments.
http://www.youtube.com/watch?v=mD4L7xDNCmA
One can already do command-line multisignature transactions with the Satoshi client, but it's a big hassle.

Open-Transactions shows great promise as an off-chain solution; I suggest anyone who wants both small blocks and low fees should consider helping with its development either directly or via the "holy grail" bounties.
https://bitcointalk.org/index.php?topic=225954.0
Ripple could be an off-chain solution too, but I'm not holding my breath waiting for them to release the source code.

In-chain micropayments appear to be further away, though.  :-\

========

Thinking more about the zero-sum mining thing... If Bitcoin's market cap is higher than the total sum spent mining (has anyone measured this?), it might be because the exchange rate has gone up since most of the coins have been mined. Coins which were sold and THEN gained value would be speculation profit, not mining profit. I'm assuming price drives difficulty but not vice-versa.

The main point I'm trying to make is if mining was positive-sum, more people would mine (reducing profits for other miners) until it became zero-sum. With expensive hardware it makes sense to mine at a slight loss sometimes, since hardware is a sunk cost. So if we're in an ASIC bubble, could the market be temporarily negative sum?

By using your logic, *every business becomes a zero-sum game*.  If making widgets is profitable, more and more people start making widgets until the profit margin becomes zero.  Therefore, widget manufacture is a zero-sum game. (widget = anything you want, a placeholder, fill in the blank)


Yes, sometimes.  It's like putting up a buy wall in hopes of stemming the sell tide.  Anyone not heavily invested in the currency they're mining at a loss is a fool or a good Bitcoin  Samaritan.  Call me jaded, but i don't like the odds with either one.


No.

Not all businesses are like Bitcoin mining; miners are in strict competition for a fixed reward. If widget supply goes up and demand is elastic, the total amount paid for widgets per day will increase... but the number of new Bitcoins created per day is fixed, and mining difficulty doesn't drive Bitcoin price. Mining is like a difficulty futures contract, and futures trading is zero-sum (unless the future in question influences you in some way, like farmers buying/selling crop futures).

Didn't you give up on logic and appeal to authority already? ;)

Aaaagh! :'(  You win 5 internets.  I guess i'm just a bleedin' heart wussy, still thinking that no one's beyond help :D

I disagree with the OP.

I just started mining in May. There are many nice people here who have been very helpful.

There is a certain level of frustration that seems to exist regarding ASICS, but I suppose that's what the horses felt when the automobile came onto the streets for the first time.

I'm sure it will pass.

Whether you are mining BTC with ASICS or LTC with scrypt, you cannot lose.

The End.

My $.02.

:)