A cryptocurrency that cost nothing to make will eventually worth nothing, because it is voluntarily participated. Why should I pay 200 dollar for something that cost nothing to make??? Suppose that you can generate 1 bitcoin today with a cost of 1 dollar, then everyone will immediately go to generate coin and sell it on market for $199 of profit right away, that will drag the price down to 1 dollar.
First, if I gave 144 people 25 bitcoins each, and they sold them, what would happen to the price of a bitcoin? According to you, the market would collapse because it cost them nothing to gain those bitcoins. Obviously, it wouldn't because there are enough free bitcoins to affect the market. You can't generate an unlimited number of bitcoins, so you can't drag the value down to the marginal cost. Second, suppose Bitcoin was premined and 1 bitcoin was given to each of 21,000,000 people. Would the value of the bitcoins forever be 0? What if other people wanted some? What if people wanted two or more? What if one person managed to collect 10,000 and got someone to trade two pizzas for them? Would the value still forever be stuck at 0? No. Don't you see? The value of a bitcoin has nothing to do with the cost of creating it. The supply of bitcoins does not depend on their value and bitcoins are not consumed. The economics of gold, oil, and other commodities do not apply to bitcoin. These are good arguments Your first assumption is exactly like those chinese miners with free electricity, they can dump their cheap coin on the market to make a quick buck. But since the bitcoin supply is extremely limited, a large hedge fund would still be possible to raise the market price by 10 fold regardless of sell pressure out there (They can anticipate how large the sell pressure can be) However, after the rally is over, the hedge fund cashed out and went for vacation for two years, now we are left with all the miserable bitcoin investors seeing a falling market. In a falling market, many of bitcoin's promises are broken, so the demand will also shrink significantly. In such a time, how much should a bitcoin worth becomes very important for people's decision making. And naturally, a common indicator is the mining cost: If the coin worth more than mining cost, miners will sell, if lower, miners will hold, that will adjust the supply. And this is what happened during 2014, exchange rate kept going down until they got close to mining cost And as you said, if there is no new supply, then even the cost is zero, the coin could still worth something if there is certain amount of demand. I'm not totally sure about this reasoning, but this reasoning can work if the demand of this coin is unique, can not be replaced by anything else(like diamond), or the demand is forced on many people (like fiat money). Bitcoin is not forced on anyone, so that leaves us with only the "unique demand" requirement, and there is indeed a unique demand: anti-inflation currency. Non of the other fiat currencies in the world are anti-inflation. However, any other cryptocurrency can also be anti-inflation So what makes bitcoin different than any other alt-coins would be its large community. If this community is large enough, everyone prefer to use bitcoin for transaction, then bitcoin will work like fiat money, automatically hold its value without production cost. But to be honest, most of the community consists of speculators, real bitcoiners are minority, so the community and its value are very unstable, depends on the price movement If there is any new coin generation, or fee generation, and people are possible to participate the mining, then the mining competition will raise its cost to the market price. Imagine that when one coin worth 1 million dollar while mining each block will give you a fee of 1 bitcoin, the mining cost of each block would get close to 1 million dollar due to competition Actually you can also use this to explain the price rally: When this community expands very fast, the demand surge and the price of bitcoin will rise exponentially, causing the mining infrastructure to expand, mining cost to rise. And when price is going down, the community also shrinks very fast, the demand goes down and price crash further, but get some strong support around the mining cost Yeah I agree! Solid input guys! I really enjoyed reading your reply. |
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How? I suppose its a matter of interpretation. It's still quite profitable in my area as well as many areas. Undervolted I would be over 50% profitable. how? it's already risen to the 400,000,000 level three months ago and hasn't moved beyond it. as you said, it's 'almost unprofitable' (or else it would be rising further). it may do so later , for example of the btc price rises, but for now, it ain't. Dude. http://www.coinwarz.com/calculators/bitcoin-mining-calculatorI already cited my predictions thread. You can't sit here and tell me its 'barely' profitable when one of the original profitability calculators is spelling out that it's (mining) is 200% profitable over electricity cost. Places like washington (all hydro power) are like 400% profitable. Unless you live in the EU or New York.. you should do just fine for while yet. I don't anticipate a jump in hashrate until the block reward halves. It's possible it might slightly pick up before then but i doubt it. I think the price of bitcoin will drop slightly over the next few months going into Q3 and when Q4 hits i expect KNC to launch whatever shenanagins they have planned and then we will see some action. Using the last 180 day horizon as reference we are lucky to have seen a 4% increase in hashrate per month, with 3-4 drops in diff. I think this is attributed to people changing out less efficient miners for more efficient miners. People have actually decreased hash power but with a lesser electricity cost so its more over profitable in the long run. Aren't you ignoring the cost of mining gear? Obviously its marginally profitable. How else would you explain the fact that the hashrate hasn't risen meaningfully in 3 months. No i'm not ignoring it i'm assuming you already have it.. as do i. ROI and profitability are slightly different my friend. The ROI calculator iv'e created has many other aspects than just price involved. Heavy speculation is needed. |
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Someone may have brought this up already (didn't read every post) but keep in mind that people with free power in hotels or apartments may run into circuit overload.
Likely not a problem with older miners, but S4s @ 1400W kill breakers when they stack up.
Very true people need to consider this. Also by a standard most houses in america run a 100 amp service. Thats only 12k watts at 120. |
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you don't have enough reputation to warrant allowing you to inspect accounts before the fact. i would only trust a reputable trader or escrow to do that.
True that I don't have enough rep to check your account and that's why I will have the escrow to check the accounts. Please posts your budget for this accounts.
Budget is flexible as I need 5-8 accounts. What if the escrow is just a dude who sold his account to some unreliable party  See how this could get sticky? That's why you use a reputable escrow and not some no-name one. What would your alternative be for this transaction because you don't seem to be offering any solutions? Not using an escrow for the deal would make it far likely for it to get 'sticky'. Not allowing the purchase and sale of accounts period. In many communities that's an insta-ban. I have no clue how the forums even allow this. They are essentially promoting scamming and claiming its sole purpose is for more attention in sales and campaigns... nah. You should not be able to purchase reputation you did not earn. It shakes the very fabric of why we have feedback ratings in the first place. Yeesh. |
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no one can touch bitcoin, enough said!!!
They can, they can put it up in sky and fuck it right through between if they have the power to. They will only have power if there is no strong support behind them. We need to be that strong support. Yeah I agree. It would be short-sighted to say they Can't do this or do that. They can do whatever they please given enough motivation to do so. In other news a bit OT, we (USA) just legalized same-sex marriage on a federal level. |
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When doing these calculations one has to take into consideration that the bitcoin system may replace large bank datacenters , ATM machines , millions of big power hungry cash registers . CC terminals and scanners will eventually all be replaced by low power tablet devices. Plus , no longer the expenses of producing , securing , transporting cash , all of these are very expensive so ultimately alough bitcoin mining requires a lot of energy once it goes mainstream the overall energy consumption will be way less than the current fiat value transfer systems we use today.
While I do agree with this you have to consider banks are already doing this themselves. They want to cut costs as much as we do. Every chance they get they move to more electronic ways of doing things. Idk about you all but i already rarely if ever have cash on me or need to go to an atm. I have direct deposit like most people so i also rarely physically make deposits. Hell even back in 2008 i had a completely electronic bank of america account. Banks are not nearly as far behind as you would suggest. |
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Another post inspired by the psuedo-science of global warming. Carbon footprint is irrelevant...I don't care if the network uses 1.21 GW of energy, if it makes Bitcoin more secure.
We have proved here in this thread that centralized mining regardless of hashrate does not increase security it decreases it. Please read comments. Exactly. While many thinks that an increase in hashrate directly leads to an increase of security. Which is wrong. However we can't really say that it does not increase it at all. I would say that it partially increases the security, because if someone new decides to do a 51% he would need many more miners. Although the downside here is obviously that a farm which is close to the necessary amount of hashrate for an attack could go rogue. I do not see a way for mining to become decentralized again? I agree that it a sense it increases security by dictating that a 51% attack would require that much more hashing power from a new party, but yes in the sense that an Existing farm make an attack having already had a good portion of the net hash makes it less. So its a give and take depending which argument you wish to follow. How do we DE-centralize this trend? Or at least slow this trend down? We would need hardware available at competitive rates when they are still at competitive speeds or it will never happen. Produce ONLY one type of miner? Which would increase the hell out of competition. Idk i'm all for input. ASIC was a huge mistake imo. It should have never been allowed on the network. As I look over at my S5's shaking my head lmao. |
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Another post inspired by the psuedo-science of global warming. Carbon footprint is irrelevant...I don't care if the network uses 1.21 GW of energy, if it makes Bitcoin more secure.
We have proved here in this thread that centralized mining regardless of hashrate does not increase security it decreases it. Please read comments. |
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It is illegal in the usa to run any form of private currency. Cite the liberty dollar experiment that went south back in 2008. http://www.nytimes.com/2012/10/25/us/liberty-dollar-creator-awaits-his-fate-behind-bars.html?_r=0This just goes to show, if it gets big enough, and it threatens what congress has set in place... they will slap the hammer down. We can't even get politicians to audit our IRS nor our federal reserve to see how much gold we actually have. To expand our 'federal reserve' that holds gold and prints money, is a private bank, with strong interest in this country. I'm not saying they are unbeatable but they will put up a huge fight. Considering they are basically holding our country hostage right now... |
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if the wattage will go down because of a better efficiency, then more miners will be added = the same result as today(with more hashpower, but same consumption), you can't escape from that equation
the only thing to reduce it would be that bitcoin will remain at current price(after the halving), therefore miners need to shut down 50% of the total hash, unless they manage to double their efficiency in 1 year
so there is a percentage of possibility that nothing will change with the reward(besides the difficulty), highly unlikely though
The total cost of mining is usually similar to the block rewards. It is still cheaper than cost of maintaining today's banking system, many many folds. then why governments are not adopting bitcoin, it would be a win win situation for them, if the cost are vastly cheaper, is only regualtion that prevent this? or there is something else... i think they just don't like to not have the control over money Well take america for example... We print money to cover debt. Which further increases inflation and the national debt, which we in turn print more money to cover. It's a vicious circle. But on that basis alone, america would be unable to adopt bitcoin as currency (with the inability to print it at will) without going completely bankrupt We don't want that along with every country that we do business with. Now like its been mentioned it's possible they backbone on the blockchain... this still doesn't eliminate USD and it wont. |
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How? I suppose its a matter of interpretation. It's still quite profitable in my area as well as many areas. Undervolted I would be over 50% profitable. how? it's already risen to the 400,000,000 level three months ago and hasn't moved beyond it. as you said, it's 'almost unprofitable' (or else it would be rising further). it may do so later , for example of the btc price rises, but for now, it ain't. Dude. http://www.coinwarz.com/calculators/bitcoin-mining-calculatorI already cited my predictions thread. You can't sit here and tell me its 'barely' profitable when one of the original profitability calculators is spelling out that it's (mining) is 200% profitable over electricity cost. Places like washington (all hydro power) are like 400% profitable. Unless you live in the EU or New York.. you should do just fine for while yet. I don't anticipate a jump in hashrate until the block reward halves. It's possible it might slightly pick up before then but i doubt it. I think the price of bitcoin will drop slightly over the next few months going into Q3 and when Q4 hits i expect KNC to launch whatever shenanagins they have planned and then we will see some action. Using the last 180 day horizon as reference we are lucky to have seen a 4% increase in hashrate per month, with 3-4 drops in diff. I think this is attributed to people changing out less efficient miners for more efficient miners. People have actually decreased hash power but with a lesser electricity cost so its more over profitable in the long run. |
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How? I suppose its a matter of interpretation. It's still quite profitable in my area as well as many areas. Undervolted I would be over 50% profitable. |
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Some nice stuff but the "Warning: Trade with extreme caution!" is turning me away too bad  Just chiming in here because i saw this. Look at the feedback and make your own judgement call. Just some things i noticed. 1) Everyone who left him - feedback currently has negative trader ratings except two people. 2) The two people that left him neg feedback who have positive feedback were all involved in loaning btc or gambling. A stupid ass idea in the first place. I would give the seller a shot, of course using a trusted escrow which he said hes willing to do. I don't see much risk factor when using a trusted escrow. Thanks for actually looking through the "reviews", something it seems some users are incapable of doing. No problem. Good luck with the sale! After all the only way to redeem your feedback is to make good sales/buys! |
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you don't have enough reputation to warrant allowing you to inspect accounts before the fact. i would only trust a reputable trader or escrow to do that.
True that I don't have enough rep to check your account and that's why I will have the escrow to check the accounts. Please posts your budget for this accounts.
Budget is flexible as I need 5-8 accounts. What if the escrow is just a dude who sold his account to some unreliable party See how this could get sticky? |
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I'm expecting the price of BTC to rise as a result ..
I do expect btc to rise as well. Not exclusively though. Hashrate will rise to an almost unprofitable state, and hopefully the btc value follows suit. I can say this is the first quarter in the history of bitcoin that we've actually seen decreases in difficulty which is promising. That's for a different discussion though. I cover quite a bit of that here ---> https://bitcointalk.org/index.php?topic=1091571.msg11695012#msg11695012 |
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How can you expect to have a quality conersation when you immediately come off defensive and with a nasty attitude? Calling people fools and idiots because they don't agree with you is a great way to keep people away.
Take part or don't. Thank you for contributing yet another off topic reply though! Plenty of people contributed to this discussion in a helpful way. Only one person said some stupid ass shit that had nothing to do with the discussion and he was called on it. Action. Reaction. |
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That means with bitcoins total hash-rate of 177,943,954 GH/s that its energy consumption would be around 88,971,977 Watts or 88.9 Megawatts of power.
Does this seem responsible? We are basically polluting on a massive scale to make pennies on the dollar.
You have to assume at some point governments will come together to put this to an end?
No, it is not responsible as human beings to waste electricity. Bitcoin is an experiment to revolutionise the global monetary system. It has the potential to save millions of people's life-savings, help overseas workers save fee remitting money home. Innovations do not come without costs. The electricity used are costs of technological advancement. I would be safe to say that the global gaming industry (PC/console/mobile) uses more energy than Bitcoin does. Are they also irresponsible playing too much games and using more electricity than needed? Will governments come together and put an end to this?  Haha well you are missing a huge part of what gaming is and who that market belongs to  Three biggest names in gaming? 1)Steam 2)Microsoft 3)SOA All three operate and pay taxes in america. This is exactly my point. Governments do not care about who is responsible for using more electricity and "pollution on a massive scale". True but you are missing my point. They (the government) are getting paid for it. Twice. Taxes in america dude. Whereas they are not with bitcoin. Unless people are claiming mining on their tax returns now? |
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That means with bitcoins total hash-rate of 177,943,954 GH/s that its energy consumption would be around 88,971,977 Watts or 88.9 Megawatts of power.
Does this seem responsible? We are basically polluting on a massive scale to make pennies on the dollar.
You have to assume at some point governments will come together to put this to an end?
No, it is not responsible as human beings to waste electricity. Bitcoin is an experiment to revolutionise the global monetary system. It has the potential to save millions of people's life-savings, help overseas workers save fee remitting money home. Innovations do not come without costs. The electricity used are costs of technological advancement. I would be safe to say that the global gaming industry (PC/console/mobile) uses more energy than Bitcoin does. Are they also irresponsible playing too much games and using more electricity than needed? Will governments come together and put an end to this? Haha well you are missing a huge part of what gaming is and who that market belongs to Three biggest names in gaming? 1)Steam 2)Microsoft 3)SOA All three operate and pay taxes in america. Well this is something that one should get used to. Humans are flawed. They are greedy and are going to abuse just about anything that they can.
It's unfortunate to see this happen but not much can be done to prevent an ASIC company to mine with new hardware before releasing it, right? I mean I agree. And believing in free market I cant even disagree with what they are doing. I just see it as harmful in the long run. But perhaps i'm just too paranoid. |
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 -snip- You are correct. I got mine off of the same place. No idea why i pulled that number though. So 88MW is more along the lines of 160MW. That's quite interesting. I've never had a problem with it and it has always shown me the correct information. However I do not agree with you on the point where governments are going to take action vs farms. You're free to spend your energy in any way you want as long as you're paying for it, right? More hashrate does increase the security if we consider the possibility of a 51%. To be more specific, more distributed hashrate (not concentrated) increases the security. I haven't seen a good proposal to solve the issue of a potential 51% attack so far. I'm still waiting for that "Bitcoin should use PoS like Peercoin" post. I agree with you that more hash-rate would increase security in a decentralized aspect. Although this is not the behavior we are seeing. We are seeing asic companies actively centralizing the network by creating farms and mining on their own hardware. Counteracting the very purpose of bitcoin (decentralized network). |
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Again you are all making a classical mistake under the assumption that added hashrate equals more network security. It DOES NOT. Individual nodes do. You know the individual miners that started this whole thing with GPU's.
Consider Farms will expand until they can no longer. Large mining farms start buying out other mining farms (Free market you keep raving about). A monopoly is possible. Don't you dare say its not. The second its not profitable some people wont mine at all. Others will for fun but their hashrate will be outweighed by the large farms that will consolidate over time.
What happens when the majority of network hashrate is owned by one farm? Your security is fucking gone and the largest farm really is the central bank now isn't it? They can manipulate the network at will REGARDLESS of overall hashrate. What matters is who owns what % of OVERALL hashrate. More hashrate does not equal more security. It means nothing.
How are you guys blind to this.
It's called a 51% attack. Yes, its possible. What's your proposal? Mine less?? huh? I'm aware. As should everyone here who's ever joined a pool. I see it on the horizon than I see it just possible. But that me man. My proposal? I don't have one. I'm looking to the people on this one. We probably have the least amount of nodes we ever did. At least in the past we had every person in the usa with an ATI video card running nodes. Now its down to who can afford asic's for basically fun, and large farms. Gavin blogged about some ideas on stopping 51% attacks but I think his ideas were far from water tight. Here is Gavin's blog I believe you were talking about. http://gavintech.blogspot.com/2012/05/neutralizing-51-attack.html |
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