The difficulty is completely independent of how many coins have been mined.  It is related *only* to the hashpower of the network.  It is impossible to say what it will be after the 21 mil coins have been mined -- since that will depend entirely on how much computing power is available to the network.

Yes, part of mining is verifying transactions.  Miners are supposed to reject invalid transactions, such as coins that have already been spent or transactions initiated by someone who doesn't hold the private key for the coins.  The mining process then seals these transactions into the blockchain, with each successive block making the previous transactions more and more irreversible.

A:  Because they get the money first, while it is literally more valuable than by the time it reaches us plebes.

B:  Because they're not consumers and are largely unaffected by inflation, except through A, which benefits them.

The thing I question about a deflationary economy is... do people take pay cuts every year in such an economy?  It is customary in many businesses to give "cost of living" raises on a regular basis... but in a deflationary economy, the business will receive less and less money per unit sold, so it would have to give its employees less and less money to avoid going bankrupt.  It matters not that the money on a per-unit basis is more valuable -- if it receives less units, and has to give less of those units to its employees.  So... in BTC-world, you take yearly pay-cuts.  I'm going to agree with another poster here -- the best currency is one that neither inflates nor deflates. 


"Encouraging investment" as you use it is trying to impose one's will over others.  Investment involves risk.  Risk-takers will invest regardless in order to make more money.  "Encourage investment" in this context is a euphemism for "steal value from savers so that saving becomes a net loss activity and investment becomes the lower-risk activity."  Note that you didn't decrease the risks of investment, you just increased the risk of saving.  The whole scheme is based on negative feedback.  A better system of "encouraging investment" would be to either lower the risk or increase the return.  A currency that doesn't inflate or deflate does just that.  It lowers the risk, because the company you're investing in won't be subject to the increasing costs of production, thus will have a better chance of surviving.  It increases return both due to the factor I just mentioned, and the fact that the money you receive from such an investment isn't devalued.  If you make 2% on an investment when there is no inflation, you actually made 2%.  If there was 2% inflation... you didn't make jack.  Good thing some a**hole decided for you that you should risk your hard-earned money just so you could break even...

Oooh, are we doing random movies now?  In that case...

I look around, I look around, I see a lot of new faces. (hahahaha)  SHUT UP!  Which means a lot of you've been breaking the first two rules of Bitcoin.  Man, I see in Bitcoin the strongest and smartest men who've ever lived. I see all this potential, and I see squandering. God damn it, an entire generation pumping gas, waiting tables; slaves with white collars. Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don't need. We're the middle children of history, man!  No purpose or place. We have no Great War. No Great Depression. Our Great War's a spiritual war... our Great Depression is our lives. We've all been raised on television to believe that one day we'd all be millionaires, and movie gods, and rock stars. But we won't. And we're slowly learning that fact. And we're very, very pissed off.

Ahh, what we see here is that the price is actually travelling on a straight line through a region of curved space caused by a supermassive blackhole of speculative BS.

Whoa.

At startup its certainly is...  which is what this is about.  Slow peer or not, if the fresh blocks were being downloaded while the database was being verified, a user wouldn't have to wait on *both*.  Even with a slow peer, the fresh data would likely be downloaded by the time the local database was verified.  That means once the database is verified, the user is welcomed to a fully updated and functional GUI, instead of a progress bar and "(out of sync)".

I'll take the 4oz of BTC.

I'll take a look at MultiBit.  I do have one "always on" full-participatory node, and the desktops already sync to that machine... but laptops being mobile,  they sync with the network at large.  Thanks for the tip

Of course, that doesn't really answer my question .  I believe Bitcoin-Qt would be more user friendly if it took advantage of idle network time during database verification, and fetched all the new blocks.  Could that be done?  (In other words... "This is a feature request/suggestion")  Just some quick math...

Average block size is currently: 159,450 (I assume bytes?)
Blocks per 24 hr: 144
Bytes per day: 22,960,800
Low-end broadband (6Mbit) = 786,432 Bps
22,960,800 / 786,432 = 29 seconds for each day a client is behind.

Since it can take a few minutes for the database to verify, even if your client is a few days behind, it would be ready as soon as the database was verified.  Saving users several seconds to potentially minutes seems like a marked and worthwhile improvement to me.  It's just a suggestion, if it isn't terribly difficult to to implement. 

I run Bitcoin-qt on multiple computers, and sometimes one machine will go a few days before being turned on.  One of the frustrating things about using Bitcoin-qt is that, after waiting what feels like 5-10 minutes for the program to completely verify the block chain, you may have to wait another 20 minutes for the rest of the blockchain to download and verify.  I believe some time could be saved, but one of the devs will have to confirm.

Probably on every machine, the bottleneck during startup is the hard disk.  The CPU is relatively idle, and the network isn't being used at all.  I would guess that 99.9% of the time, it would be a safe assumption that the stored blockchain and database have not been corrupted.  Would it be possible to look at the last block stored locally, and begin "prefetching" the rest of the blockchain from any nodes the client can see?  The local blockchain would of course still be verified as usual, but you'd save a few minutes by having the new data already downloaded by the time the rest of the chain is verified.  The new data would just be cached in RAM (or disk if there was enough of it) until the verification process caught up.

Thoughts?  Possible?

I had this thought a while back and gave it a try.  I have an i5-3210M in a laptop.  The GPU is capable of 11.5 MH/s with BFGminer and 2 GPU threads (BTC mining).   The 3210M is dual core with hyperthreading, and the GPU mining will eat up one "core".  You can get another ~8 MH/s out of the remaining cores.  I don't remember the miner I used for CPU... it was like cpu-pooler-miner or something.   With both CPU and GPU mining, it uses 24 Watts.

First, the OP has made it clear that he's going to us the GPU's for gaming... so the rest of this post is directed at those who are thinking about buying GPUs for investment...


Yeah, the people who backed their advice up with numbers are the liars, but your claim backed by "hey listen to me!" is probably golden...

Sure GPU mining is more profitable than it's ever been... assuming you already own the cards AND only because of a bubble.  But the fact of the matter is that Avalon is shipping ASICs, BFL has shipped a small batch and will theoretically be shipping many more soon, and many other ASIC operations are due to come online in less time than 3 months.  I showed how in 3 months, the OP would still be very much in the hole even assuming the price of BTC doesn't drop.  Unless the price of BTC increases *substantially*, you will lose money just running your GPUs once all those ASICs come online. 


Let's break down each of the claims by each of the authors:

First claim: "Build your GPU rigs with the price of btc @ it's all time high, since at a future date, it WILL pass that."

Counter Claim:  If the price of BTC is guaranteed to go up as you say, it makes more sense to spend the equivalent amount of money on an ASIC miner, which will produce far more BTC for far less electricity cost, which allows it to stay ahead of the difficulty/profitability curve.  The price will have to go up at a rate higher than people are adding hashpower to the network for a GPU to work out.  Even the small ASIC miners will replace the hashpower of 8 7950s, and only costs as much as ONE.  And while those 8 7950's will use 1600 Watts, the ASIC miner that replaces them will only use 30.  If your purpose is solely as an investment, why would you pick the option that costs more to purchase, gives 1/8 the return and costs 53x more to run?  Anyone?  Bueller....  Bueller...

Judgement:  I think the numbers speak for themselves.  If this is an investment it's downright foolish to buy GPUs.

Second claim: "I mean even if difficulty goes up, it is possible that BTC/LTC will continue to rise so there ROI will still be there. "

Counter Claims: 1: Difficulty is guaranteed to go up.  2:  It is equally possible that BTC/LTC will fall, so your ROI would be even worse.
Judgement:  At best a tie.  Nobody knows what the price of BTC/LTC will do.  We DO know with ASICs coming online that difficulty will increase quickly, which will make GPUs increasingly less profitable compared to ASICs, and possibly not profitable at all.

Third Claim: "Also, I can always stop mining once my rigs do not profit anymore and just game on them and/or sell the parts individually probably up to 70% of what I bought them for."

Counter Claim:  Sure, if you want to game on them fine.  But then you're not really buying them "for mining", so this entire discussion is pointless.  Regarding selling the hardware...  you could also sell your ASIC miner.  The only thing that will replace an ASIC miner in Bitcoin is... faster, better ASIC miners.  That's a lot like nothing is going to replace GPUs for gaming, except faster better GPU's.  It's reasonable to believe that ASIC miners will retain their value on par with GPUs... perhaps even *more* since they are scarce.

Judgement:  If you're buying them to game, the screw it, buy GPUs.  If it's an investment, you're still better off with ASICs.

I think this model has a number of flawed assumptions... but please correct me if I'm wrong:

1.  The difficulty is not constant.  For the first 32,255 blocks the difficulty remained at 1. That's roughly 2^15 of your "crosses".  You'd have to retroactively count which "blocks" of 10 coins had 3 leading "heads", which would reduce the "current number of blocks solved" (or crosses) significantly.  OP based his claim on current blocks solved of all difficulties.

2. SHA256 is a deterministic function - does not produce random output.  Given an infinite set of inputs, it will reduce each to one of 2^256 values.  Over an infinite set of inputs, one might assume the outputs are evenly distributed, but...

3.  There is not an infinite set of inputs.  Based on the block hashing algorithm, there are 80 bytes x 8 = 640 "bits" of coin "inputs" possible.  40 bytes (half) are almost guaranteed to be the same for all miners, and at the same positions.  That leaves 2^320 bits to be toggled "randomly" before being fed into the SHA256 function.  Because half the total input bits are static, the inputs themselves are not evenly distributed.

4.  SHA256 isn't as "fair" as one might assume.  http://www.femto-second.com/papers/SHA256LimitedStatisticalAnalysis.pdf.  I'll admit this paper is above my head... so feel free to take advantage of that and tell me this paper doesn't say what I think it says 

5.  The original SHA256 output is again hashed with SHA256.  Therefore the maximum inputs for the final iteration is 2^256, as a best case scenario.  The input was skewed once due to the structure of the block header, skewed again by the imperfect nature of the SHA256 algorithm, and now skewed yet again by a second iteration of SHA256.

6.  Has anyone proven mathematically that each and every value from 0 to 2^256- 1  is actually possible as an output of SHA256?

7.  Has it also been proven that SHA256 can produce all 2^256-1 outputs given only the inputs from 0 to 2^256 - 1?

To me, the OP's claim failed right at #1.  As I said:


"Number of blocks found" != "number of blocks found at X difficulty".  OP was claiming the former, you're claiming the later, which at least makes sense.

For what it's worth, there will always be 2106 blocks solved at a given difficulty before the next is chosen.  That's roughly 2^11.  Within those 2016 blocks, someone found an answer with 12 extra leading 0's.    Assuming completely random inputs (which they aren't) and assuming SHA256 is fair (it isn't) and that a 2nd iteration of SHA256 can still produce all 2^256 outputs (who knows?), it still seems that block 125552 was statistically significant.  And you can't really count very many blocks after those 2106, because the difficulty has been changed again... you're now requiring 4 heads in a row for a cross, but still only 7 for circles, which doubles the probability of a "circle".

Thoughts?

Also trivially derived from rectal extraction theory.  We'll need PoW to determine which was applied.

Not really (embarrassed).  I understand better what you were trying to say, though, so I apologize for my tone.  The way I see it, the low price lowered the barrier to entry into the Bitcoin world for all of those who were not aware of it until recently.  It was the greedy who lost (fiat) money and learned a lesson...  They chose to remain enslaved by trying to get rich instead of buying into the concept.  To me, "pig" is an accurate label for these people.  I don't see anything hypocritical about calling such people a name that originated in the world in which they choose to live.
Bitcoin "believers" on the other hand are better off -- both in terms of freedom and coincidentally in terms of what the other world might call their "portfolio".  Is there greed?  Certainly... lots of it.  But there's still a revolution occurring, even if the general public is to blinded by greed to see it.

Quite correct on ASIC scarcity.  I'm hoping there's a "batch #4" from Avalon soon...

There are other options.  If you believe in Bitcoin enough to sink tens of thousands into hardware, you might consider just buying some BTC.  You'll have to decide for yourself whether now is the right time to buy or not.  Personally, I'm feeling bearish in the short-term... but long term I think the price will continue to increase.  You could also invest in one of the ASIC mining contracts.  Most of these won't be "going live" until maybe July, by which time maybe BFL will have shipped (or not, heh).  As with all deals you see here, do your due diligence and *buyer beware*.  Scammers are a "Millie" a million.

The network will continue to adjust itself, and blocks will continue to be solved (on average) every 10 minutes... for now, and until the end of time.  ASICs do not change this.

At this time, ASICs have only been developed for sha256 double hash, which Bitcoin uses.  Litecoin uses scrypt, so current ASICs won't work.  Litecoin won't see ASICs until there is much broader adoption and higher competition.

Did you try clicking on the link he provided?  It might have saved you some embarrassment...


"Bulls Make Money... Bears Make Money... Pigs Get Slaughtered..."

Does not compute.  Plus this 150% PPS business.  Something smells funny.

I hear NYC Mayor Bloomberg wants to hide pressure cookers behind the counter so kids won't want to buy them.  If the bomb-making potential wasn't enough, just THINK about how much soda you could put in one!

Let's say you bought a bunch of 7950's.  According to the mining hardware comparison chart, high-end, you'll get 600 MH/s out of each of them.  So just to get to 50 GH/s (50,000 MH/s), you need 84 of them (well... 83.3333... but let's round up).  Divide by 4 per machine, that's 21 machines. But that's not even the point...  

Let's say you can get a good deal on all those 7950's.  $250 USD each sound fair?  For 84 cards at a good price, you'll pay $21,000.  Just for the cards.  Now you need 21 motherboards, 21 processors, 21 sticks of ram, 21 PSU's, 21 harddrives (or USB keys, most likely).  The motherboards can't be total trash, because you need at least 4 PCI-E slots.. (1x lanes are fine, but then you need PCI-E 1x to PCI-E 16x riser cables.).  The real stickler will be the PSU's.  4 GPU's are going to pull ~800 watts.  After the hardware cost, your major and ongoing cost will be electricity, so you'll want an efficient PSU.  PSU's operate most effeciently around 50% load.  Maybe you can get away with a 1200W power supply, which would be 66.67% load.  The cheapest one at Newegg is $150 USD and operates at 87% efficiency.  There's $20 rebate too, but I doubt they'll let you claim it 21 times.  So another $3,150 on power supplies.  And we'll say the CPU/MB/RAM/USB key run another $150 each, so yet another $3,150...

GPUs x 84: $21,000
PSUs x 21:  $3,150
Rest of it:  $3,150
Total: $27,300
Output: 50,000 MH/s

Total Wattage of GPU's: 16,800
Wattage @ 87% eff.: 19,310

Cost of electricy (guess) $0.15/kWh.
Cost to run these machines for 24Hrs: $70
Cost to run these machines for 1 year: $25,550

Cost of upgrading your electric service to supply an additional 160 Amps of service...?


With me so far?

Cost last batch of Avalon ASICs: 75 BTC... or $8,775 at the exchange rate *right now*.
Output >65,000 MH/s *each*
Wattage: 620W
Cost to run this machine for 24Hrs: $2.25
Cost to run this machine for a year: $821.25

Soo... Does it make more sense to spend >$27K on a GPU based system, plus $25K per year in electricity?  Or just $9K on a system that provides 130% of the performance and only costs $821.25 per year to operate?  And remember that Bitcoin offers diminishing returns every 2 weeks.  You may find that the diminishing returns far outpace your ability to recover the cost of a $27K investment.

[EDIT]
Heck, I forgot about COOLING cost.  The 21 machine GPU farm equates to a 20kW furnace, running 24/7.  A 20kW furnace is sufficient to heat a 1500-2000 sqft home, and they don't tend to run 24/7.  Unless you live in a year-round sub-zero climate, expect your cooling costs to increase by another $25k per year also.
[/EDIT]