Bitcoin Forum

As you people have noticed, we have a huge number of sheeps flocking to the green pastures of deepbit, slush and whatever pool is in third place, creating a network security problem...

But not only that, we have all those people, selling BTC, but not using them, actually, they are not even hoarding them...

Some people already mentioned, that if you mention BTC, and do not even mention mining, people will ask about mining 2 minutes later. I went to ask newbies, how they found out about mining, and found out this is happening:

Random non-tech person hears of BTC. Person visits weusecoins. Person sees the cool video, that explains lots of technical crap and mentions how easy is to mine and get free 50 BTC. People totally misunderstand bitcoin, and: A) Get the default client, click generate, and waste lots of power, and eventually notice it is not working, and abandon BTC (and maybe even badmouth it). B) Person follow links, ends on the wiki, gets excited with mining, buy GPUs, join a pool.

Both outcomes are undesirable, we need people to USE bitcoin, we do not need them to GENERATE AND SELL.

My proposal to fix is: A new weusecoins video... the current one was good to bootstrap the network, now we have a solid network, we need a video that screams: MAKE SOME BUSINESS THAT ACCEPTS BTC AND GET RICH! or... USE BTC FOR EASY PAYMENTS. (no, mentioning how it is better than fiat or better than paypal or any cypherpunk stuff, won't attract the people we need now).

Change bitcoin.org to point to mostly links about business, trading, investing, maybe even hide the mining information on the wiki, maybe create a separate mining wiki, move the mining information there, and leave that wiki mostly unlinked. Or, we need to make clear that to mine you need to have technical skills, it is hard to do, expensive and has lots of competition.

The very weusecoins page let it bold clear:  "Most bitcoin users don't mine! Bitcoin mining is a business and very competitive."

Why is it a problem that miners are generating and selling? Shouldn't we thank them for providing us with cheaper coins? ;)

Regarding those who waste energy with CPU mining, then you're right. I think we should remove CPU mining from the standard client, or at least put a very strong warning against it.

What is the use of cheaper and useless coins? We need people to make business with bitcoin, understand it as a currency, people are understanding it as a token to get USD for processor time instead.

We need people to NOT EVEN KNOW ABOUT mining. Saying there are a competitive mining business is like saying there are a nice business.

Seriously man, stop with this freaking out about people "having to trade with bitcoins!" for it to be useful.

How many people do you know that trade with gold? When was the last time you bought something using this precious metal at a grocery store?

Gold is practically useless for trade nowadays, and look how its price increases over time (particularly during uncertain times). The main purpose of gold is to store value, and bitcoin is a better store of value than anything physical could ever be. And, besides that, as a bonus, it can be easily used for trade by those who have a particular interest in it.

People paying or not most of their bills with bitcoins is not at all a necessary condition for its success.

If noone accept BTC, how it stores value?

does your local grocer accept gold shavings?

You do not use the grocery specifically, but anyone that you offer gold, will know what it is, and if the person is not bound by very strict rules (ie: he is not a cashier in a supermarket for example) there is a great chance of him accepting it.

If you offer free gold to people, they will CERTAINLY accept it.

Now if you offer free BTC to random people, some will accept it, but some, that even know what is a bitcoin ,will just say: "Nah, it is useless, not worth the hassle".


Also miners are not storing value in BTC, they are using it only as means to get fiat, they give a false sense of security to us, as soon mining becomes unprofitable, they will jump ship, since they have nothing to lose.

Hey, hoarders are just as bad don't let them off the hook. Hoarding is what happens with a deflationary currency, good luck changing that!

Speeder, look at the exchange rates. Look how much bitcoin went up in a year. Of course a precious metal which has been with humanity for thousands of years is more recognized than an open source project less than 3 years old, but, seriously, look how much it's growing! Don't you think you're way too pessimist?

If the majority of bitcoins are treated as a sort of speculators tool then yeah their value won't have much of a solid base. So I personally agree with people that say that bitcoin needs to grow in economic use. This whole mining thing is blown way out of proportion. I have this uneasy feeling that mining will still be an ongoing central focus for most people until all 21 million coins are minted. I worry that a large majority of newbies are going to treat bitcoin as a cashcow (mine some coins and then dump them as quickly as possible). Heck, hoarding would be better than mining and then dumping them quickly into fiat. Even better would be to buy services and goods or offer their own services and good for them.

I do not agree with not telling people about mining though. I don't think it's a good idea to conspire to keep new bitcoin users in the dark about this aspect of the bitcoin system. It would be pretty damn hard to keep them from finding out about mining anyways. The economic incentive is there so it's hard to blame them for wanting to exploit the potential for profit.

Dare I go so far as to say that we're going to have a "mining bubble" which is going to drive up price and so on and so forth. Eventually the mining bubble will pop as the non-professional miners will get kicked out of the market by the increasing difficulty. So in the end everything will or should work out just fine :)

@ speeder, I agree with you, there are a LOT of miners out there that don't give a shit about the security of the bitcoin network and they aren't planning to do this for the long term. They just want to squeeze as much fiat money out of this bitcoin thing for what it's worth. I'd have more faith in the early adopters than in say some teenager with his fancy pants radeon that his mommy bought him for Christmas. It's those that have a lot to lose and a lot to gain from bitcoin's success that you can count on to be there for the system when it needs them.

Heck I'll mine at a loss if necessary! I don't give a crap about an extra $20 a month in electricity. I want bitcoin to succeed in giving a large portion of humanity freedom and control over their OWN money. On the flip side I understand that I'm probably in the minority and that not a lot of people share my ideological motivations.

C'est la vie, n'est pas?

I think hoarding will slow down once the hoarders feel more secure that if they were to give up bitcoins they could earn some back by offering a good or service. What I'm saying is that once a mature and deep market exists hoarding will not be such a big problem. Right now bitcoin is like gold - a investment and an asset protection tool.

i don't get your point, speeder,
on one hand you complain about miners selling, and not hoarding coins (i think it's the first time i ever heard that, usually people complain about hoarders),
on the other side, you want all newcomers to only use coins.

how do you expect those newcomers to get coins, if miners don't sell them?
i guess you want them to buy coins from YOU, for a higher price of course, because the supply is smaller due to all other miners hoarding.


my 2 bitcents on the topic:
there is no problem to fix.

Read then the allinvain post, he explains what I mean.

If everyone is selling them at least they are circulating, :o

I for one have used my bitcoins to purchase many illegal goods and services from the hidden internet. I think this was the real intended purpose of bitcoins. :x

Oh noes, a currency that increases by 25% per year is deflationary!

The next release of the software will not have a "generate coins" option, and for what it's worth I agree that weusecoins should not mention mining. It doesn't make much sense that the merchants section is "coming soon" whereas there is a mining section.

Ultimately, posting to a forum and saying "there needs to be more trade" isn't that helpful. Yes, there does. It's certainly true there is lots of focus on mining right now and probably a bubble in BTC value, but pointing that out doesn't really change it.

What can help more is resources and assistance for merchants. For example, it's easy to say "make a new video" but the production of the weusecoins video was pretty expensive. It'd be better to send Stefan a page (or set of pages) that explain how to set up your website to accept Bitcoins. Better still if you make the integration step easier (drop in JavaScript or something).

There's lots of low hanging fruit to be harvested right now in the supporting merchants space. It's too hard to integrate the software with websites and there isn't much documentation on how to do it. Solve that and you (yes you!) can shift the focus.

Really? http://www.youtube.com/watch?v=Ef0VG1WEP10


Try not to worry so much...miners flipping bitcoins just keeps the price from rising by more than it already is (and I for one would welcome a halving of the price with arms wide open).  They might not get what bitcoin is all about, just be thankful you do.  Besides, lately, compared with just buying bitcoins and later selling, mining rigs have been a poor investment.

Note the lady there falls into very strict rules... Even if she considers only the face value (50 USD), how she will give change for all that? Also probably the company (Taco Bell) does not accept it.

Unfortunately that undermines the point of the video, if he pulled that into a family grocery store, and it worked, then I would believe him.

The coin is legal tender, they have to accept it (if this was filmed in the U.S. which I assume it was). Are you suggesting TacoBell doesn't have change for a $50 bill?

[emphasis mine]

i more or less agree.  i dunno if i'll mine at a flat loss - but as long as i can cover my electric bill and an occasional cup of coffee i will.  i want Bitcoin to succeed as well, and my hardware was paid for some time ago.  even now, i'm keeping a nice bunch of BTC, but spending proceeds from my mining.

spending BTC is like hashing - they both secure the network, in their own way.

No, they do not have to accept it.  They do not have to accept pennies or $100 bills either.  They could even require that all payment be made in carrots if they wanted.  Legal tender laws in the US only require that people must accept legal tender for the settlement of debts.  You are free to request or require payment in any form you prefer for goods or services.

Oh right, I was thinking about a normal restaurant where you get the food first then the bill. My apologies.

The problem solves itself. Though I would like more focus on the economy, I still think the premise of mining isn't harmful: it pulls people in after all!

Yeah, I suppose if the lady had given her the taco first, he might have been able to assert his right to pay with the gold coin under legal tender laws.  ;)

I think the point was that bitcoin is not as useful as gold because it is not as widely recognized to have value.  That's certainly true.  But another equally valid point is that it's not necessary for everyone to accept bitcoin as payment for bitcoin to have value and to be valued.  Gold was cited as an example that it couldn't be used for exchange in a grocery store.  Even if they would take gold, there are plenty of other examples you could cite (try buying bread with BRK-A stock certificates, a barrel of oil, or a pack of cigarettes...I think a clerk would politely refuse and request payment in something they recognize and whose value they understand).

I'm in the same boat. I've long since paid for my mining hardware. I'm still adding a few hards here and there but due to the increasing difficulty of finding the cards that I want I have to curtail my mining farm expansion until the current generation cards become cheap enough. Who knows if when they do they'll be economically viable given the difficulty level at that time, but the point is as long as I'm not going broke keeping the mining rigs running then It's all good. If my small contribution (even at low profitability) helps out the long term success of the system then I'm all the more happy. I already got my geeky reward building and setting up the systems :)

I think though that the mining rigs I have will continue to be profitable for as long as there are coins to be mined (I'm one of those "fools" who believes in an ever expanding BTC/USD exchange rate - ie an increasing value of BTC). When the system switches over to a fee based reward structure I'm not sure what will happen. But even then I will still run a few rigs, just as I still seed torrents even though I'm not getting paid for it.

What would be really cool is if in the future as more established companies and merchants adopt bitcoin they setup their own mining rigs and write them off as an expense or a kind of voluntary cost of keeping up the bitcoin financial system. It would be sort of like paying bank fees or account maintenance fees but no doubt be smaller.

No problem, no "fixing" necessary.

Of course, there was going to be a bubble in mining, it is exactly analogous to a Klondike gold rush.

Anybody seen "Deadwood"?, most of these guys piling in now and cashing in there few nuggets and dust for fiat are Al Swearingen's "hoople-heads".

They'll spend it on whisky and woman and useless paper and go back to their usual jobs after they get over it with a hangover, an illegitmate child maybe and some great stories.

The guys making the real dough are the traders as usual not the hoople-head miners. Those selling mining equipment, supplies, gold traders (Mt. Gox), big miners who stockpile, anything that accrues the gold (BTC).

The side affect is we have people colonising the wide open BTC spaces, it's all good.

Note that I do not consider mining itself a problem.

The problem is people not understanding bitcoin, and getting a totally wrong idea, people are thinking bitcoin is a sort of doable get rich quick scam that they can pull out later and end with a gaming rig.