... As well, the space being, an thermodynamically open system, if the heating elements should be spread about, the diffusion of their heat into the environment beyond the space is, effectively, assisted. Were one to move them closer together, they would, at certain proximities, cease to function.
Yes this is very true. This brings me to my next point. Using electricity for space heating by its very nature only makes sense if the heat is needed for a decentralized application. The heat at the power station is in many cases just waste heat. It is here where space heating creates a further advantage for POW that was not taken into account even by Satoshi Nakamoto in https://bitcoin.org/bitcoin.pdf or by Adam Back in http://www.hashcash.org/papers/hashcash.pdf. The assumption that is made in these papers is that the marginal cost of POW is the same for the honest nodes as for an attacker (dishonest node). Space heating skews this further in favour of the honest nodes because the value of the heat is so much higher for the decentralized (honest nodes) than for the centralized (dishonest node). In short the honest nodes may end up having a negative marginal POW cost while a dishonest attacking node still has a positive marginal POW cost. Making POW "useful" only makes sense only if the "useful" application requires decentralization in order to have value. . However, the economic merits of your proposition do not extend to those that do not already have regular access to a Bitcoin ASIC. Not necessarily. They work just as well for someone say mining Monero (XMR) using spare CPU / GPU cycles on a PC. The first law of thermodynamics does not change because one is mining XBT on an ASIC, XMR on a PC or some other POW alt-coin. Edit: It could work just as well with say Freicoin. http://freico.in/ Any loss due to demurrage would be more than compensated by the savings in heating costs. |
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... As well, the space being, an thermodynamically open system, if the heating elements should be spread about, the diffusion of their heat into the environment beyond the space is, effectively, assisted. Were one to move them closer together, they would, at certain proximities, cease to function.
Yes this is very true. This brings me to my next point. Using electricity for space heating by its very nature only makes sense if the heat is needed for a decentralized application. The heat at the power station is in many cases just waste heat. It is here where space heating creates a further advantage for POW that was not taken into account even by Satoshi Nakamoto in https://bitcoin.org/bitcoin.pdf or by Adam Back in http://www.hashcash.org/papers/hashcash.pdf. The assumption that is made in these papers is that the marginal cost of POW is the same for the honest nodes as for an attacker (dishonest node). Space heating skews this further in favour of the honest nodes because the value of the heat is so much higher for the decentralized (honest nodes) than for the centralized (dishonest node). In short the honest nodes may end up having a negative marginal POW cost while a dishonest attacking node still has a positive marginal POW cost. Making POW "useful" only makes sense only if the "useful" application requires decentralization in order to have value. |
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. . .
I didn't realize you were so specifically referring to obsolete Bitcoin mining equipment. Regardless, I still contend that electricity, if it is to be utilized in heating, is more efficiently made to produce heat with equipment designed specifically for the task.
Not true. Electric heating basically dissipates heat in a resistor and then in many cases has fans to distribute the heat. This is no different from electronic equipment, only that the resistor is replaced by the various integrated circuits. In both cases if one puts in 500 watts of electricity in one gets 500 watts of heat out. This is just the first law of thermodynamics. https://en.wikipedia.org/wiki/First_law_of_thermodynamics. (Red colorization mine.) Your statement does not account for electricity lost to other forms of energy. What other forms of energy? Please specify. Edit: Those who wish to bet against the laws of Physics or the laws of Mathematics with their money are of course free to do so. I will pass and stick to POW coins. For one, the kinetic energy of the cooling fans. For another, the radiant energy of the LEDs of the circuit boards. Nope. The kinetic energy of the cooling fans becomes heat through friction. What happens to a cooling fan when you turn of the power it slows down and stops because of friction. As for the light emitted by LED on a circuit board it gets absorbed by the case and turned into heat. Edit: This is starting to remind me of debates over Angle Trisection using a strait edge and a compass. https://en.wikipedia.org/wiki/Angle_trisectionThat assumes the devices are enclosed. If the devices are open and light can escape the space, then its energy will be lost. I was waiting for this one. The practical advantage here is with the mining equipment. A XBT mining ASIC will produce less light that can escape, via say a window with the curtains open, than say a radiant space heater that glows red. So again no. |
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. . .
I didn't realize you were so specifically referring to obsolete Bitcoin mining equipment. Regardless, I still contend that electricity, if it is to be utilized in heating, is more efficiently made to produce heat with equipment designed specifically for the task.
Not true. Electric heating basically dissipates heat in a resistor and then in many cases has fans to distribute the heat. This is no different from electronic equipment, only that the resistor is replaced by the various integrated circuits. In both cases if one puts in 500 watts of electricity in one gets 500 watts of heat out. This is just the first law of thermodynamics. https://en.wikipedia.org/wiki/First_law_of_thermodynamics. (Red colorization mine.) Your statement does not account for electricity lost to other forms of energy. What other forms of energy? Please specify. Edit: Those who wish to bet against the laws of Physics or the laws of Mathematics with their money are of course free to do so. I will pass and stick to POW coins. For one, the kinetic energy of the cooling fans. For another, the radiant energy of the LEDs of the circuit boards. Nope. The kinetic energy of the cooling fans becomes heat through friction. What happens to a cooling fan when you turn of the power it slows down and stops because of friction. As for the light emitted by LED on a circuit board it gets absorbed by the case and turned into heat. Edit: This is starting to remind me of debates over Angle Trisection using a strait edge and a compass. https://en.wikipedia.org/wiki/Angle_trisection |
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. . .
I didn't realize you were so specifically referring to obsolete Bitcoin mining equipment. Regardless, I still contend that electricity, if it is to be utilized in heating, is more efficiently made to produce heat with equipment designed specifically for the task.
Not true. Electric heating basically dissipates heat in a resistor and then in many cases has fans to distribute the heat. This is no different from electronic equipment, only that the resistor is replaced by the various integrated circuits. In both cases if one puts in 500 watts of electricity in one gets 500 watts of heat out. This is just the first law of thermodynamics. https://en.wikipedia.org/wiki/First_law_of_thermodynamics. (Red colorization mine.) Your statement does not account for electricity lost to other forms of energy. What other forms of energy? Please specify. Edit: Those who wish to bet against the laws of Physics or the laws of Mathematics with their money are of course free to do so. I will pass and stick to POW coins. |
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. . .
Making POW useful requires nothing more a than changing the mindset. There are many situations where the heat produced has more value than the electricity consumed. Ever used electricity to produce heat? If the objective is to use electricity to produce heat, then POW mining of crypto currency becomes simply a way to reduce costs.
Electric heating elements are, however, substantially more economical. How? I am talking about obsolete mining equipment, which in theory has zero value, particularly if one is talking about ASICS. I didn't realize you were so specifically referring to obsolete Bitcoin mining equipment. Regardless, I still contend that electricity, if it is to be utilized in heating, is more efficiently made to produce heat with equipment designed specifically for the task. Not true. Electric heating basically dissipates heat in a resistor and then in many cases has fans to distribute the heat. This is no different from electronic equipment, only that the resistor is replaced by the various integrated circuits. In both cases if one puts in 500 watts of electricity in one gets 500 watts of heat out. This is just the first law of thermodynamics. https://en.wikipedia.org/wiki/First_law_of_thermodynamics. |
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... Bitcoin, for all the places you shop. Monero, for all the places you don't.  It is way more than this. The big issue here is fungibility https://en.wikipedia.org/wiki/Fungibility If I for example use cash to pay a tax to the state, I do not need to concern my with the issue that someone ten transactions back used the same coins or even same bills for some illegal activity. With XBT this can be an issue otherwise know as taint. With XMR it is like coin, perfectly fungible, even better than bills with serial numbers. |
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. . .
Making POW useful requires nothing more a than changing the mindset. There are many situations where the heat produced has more value than the electricity consumed. Ever used electricity to produce heat? If the objective is to use electricity to produce heat, then POW mining of crypto currency becomes simply a way to reduce costs.
Electric heating elements are, however, substantially more economical. How? I am talking about obsolete mining equipment, which in theory has zero value, particularly if one is talking about ASICS. |
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Here is a guy who is using the power of bitcoin mining to benefit the planet:  I'm going to buy some of his bitcoins right now, how about you give him your money too! Bitcoin 1.0 YAY!!! Very interesting. The trouble is there is no way he can compete with someone using obsolete XBT mining equipment for space heating, where the effective cost of electricity becomes negative, regardless of the price of electricity. Making POW useful requires nothing more a than changing the mindset. There are many situations where the heat produced has more value than the electricity consumed. Ever used electricity to produce heat? If the objective is to use electricity to produce heat, then POW mining of crypto currency becomes simply a way to reduce costs. |
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If BTC will go under 100 USD, then it will influence on all crypto including Monero and no way Monero would held over 0.001 btc.
Quite the contrary; it's hard to believe XMR price measured in fiat could go much lower than what it already is, resulting in a XMRBTC of >0.002. This is an interesting perspective. I have argued for XMR behaving as a the leveraged play on XBT based on the past performance of many of the "senior" alt-coins over say a 2 year period; however the combination of the recent bear market in XMR, now having found a bottom, followed by a fall in the XBT/USD rate has created a situation where XMR has close to held its own with respect to USD and other major fiat currencies over the last 30 days. https://bitcoinwisdom.com/. If even a very small portion of the bit bears get the idea they can hedge a part of their XBT exposure by purchasing XMR this could be very bullish at least in the short term. The 30 day figures on https://bitcoinwisdom.com/ speak volumes. |
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There is a very simple solution to this. The seller can simple hedge her exchange risk say USD/XBT using derivatives. This is an issue common to many markets no just just "dark" markets or even currency markets. It is the reason the futures markets were initially developed for agriculture. Furthermore the hedging does not have to take place in the same market as the transaction.
By the way hedging with derivatives is one reason why proof of stake coins can very easily fail.
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My forecast for 2015: A bloodbath, just in the end we'll see a new #1 and BTC biten the dust (with BTC Bagholders still being in denial) I actually agree with this although I don't know that it will happen in 2015. Crypto can't go anywhere with a revolving door of trading leaders every few years because it's not economically viable. That said - I feel Bitcoin's economic model is broken with the trending towards 0 block reward. I actually find Ethereum's ongoing distribution model much more geared towards what makes sense to me in a growing economic structure. Not only that, the entire Bitcoin culture was built around the coin having a fix block reward until 0 and it being transparent with linkable transactions both aspects are core to the Bitcoin philosophy and I believe they have their place but for the end user they don't make much sense, Moneros approach is more refined. A more immediate issue will be the 1MB block size limit in Bitcoin, which does not affect Monero. |
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The market just keeps running away from my bids. Things are NOT going as planned.  In the midst of a falling XBT/USD price. Hmm... |
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Would it be possible to analyze the inputs to claymores wallet and estimate the percentage of mining done by GPU clients over time?
No. That is by design. Indeed. This is why we are here isn't it? I loaned a friend a few bucks for a poker game recently. From my wallet to his hand. I busted out, but he cashed. He paid me a portion of his winnings. From his hand to my wallet. The only people who know about this transaction are those I chose to tell. And there is pretty much no way to confirm or deny my experience. You take it on good faith that my story is true or you assume I made it up. This is one way money has been transacted for millennia. Bitcoin brings speed and verifiable transparency to commerce. <- Valuable! Monero inherits that speed but allows for the privacy we are accustomed to for cash transactions. <- also valuable! The widespread introduction of third parties into financial transactions is actually a very recent phenomenon starting in the 1970s, and taking off in the 1980s and 1990s. Before then financial transactions were dominated by cash, and bearer instruments. As a baby boomer I am a member of the last generation that actually remembers experiencing a predominantly cash / bearer instrument society first hand. This is very important when introducing crypto currency to people over the age of 60. It is actually very simple. This is like cash that you can use on the Internet is my opening line. The next analogy is Bitcoin is like marked bills Moenro is like coins. They get it in an instant. On the other hand I was walking with a millennial (just over the age of 20) when a pan-handler approached us. His response to the pan-handler was "I only have debit". The cash analogy will fall flat with someone age 20. |
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Would it be possible to analyze the inputs to claymores wallet and estimate the percentage of mining done by GPU clients over time?
No. That is by design. |
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It keeps going around 135k Satoshi, nobody's expected a rise soon as I see from your writings. So is it valuable price to sell and buy low later?
I do not want to give advice but I can only tell what I am doing. I am watching dips and then nibbling here and there. Definetely not buying a lot at one shoot since it just leads to highish average price but patiently buying little all the time. Selling low is not something I am planning to do. I am not personally trying to speculate on bearish trend but I am buying and storing them for long term deeply frozen storage units. I am interested in selling when the price starts to rise, and also then I am selling only small incremends at time since I do not need those money desperatively I have put into Monero so I am able to waite for the highest prices and still holding Moneros. Cost averaging approaches tend to work very well over time particularly with a highly volatile asset such as Monero. |
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Keeping it super-simple:
If .001 is roughly the cut-off for botnet mining, we might loosely infer that in 12 months the constant-demand clearing price will be ~.002.
A risk-free rate in a ZIRP environment is essentially negligible relative to our risk scales in crypto, so we can loosely call it 2%.
Present value of 1/1/2016 XMR ceteris paribus should be .00196, but it is priced about .00136, so we conclude that the market is discounting 1 year risk around 30%.
That is, the market value risk of XMR failing permanently to achieve a botnet-minable price level is about 30%.
Market seems a bit unduly pessimistic to me.
I may be misunderstanding but I guess you are looking at the emissions decline? Why stop at one year? The halving interval is about 18 months. Let's go out 3 intervals or 48 months. At that point assuming constant mining costs, the price should be 8x. At 2%/year risk-free discount, so four years of discouting....well you get the point. Something is wrong with this model. To be fair, he didn't say that his model was valid over the long-term. The assumption that demand will remain about the same as today is reasonable only in the short term. There needs to be much, much more of a discount if we go out 4 years to account for the possibility that demand 4 years from now is 0. The assumption that demand for a crypto currency will be constant for any significant period of time has been proven very wrong by the markets since the creation of Bitcoin. Demand for a crypto currency comes from two primary sources: 1) Demand for a crypto currency for actual use in commerce. 2) Demand for a crypto currency by investors and speculators because they expect 1 above (directly or indirectly) to occur at some point in the future. 2 is the dominant source of demand at this point now for all crypto currencies including Bitcoin, and the market perception of this future value varies widely as is evident by the fluctuations in price. In the case of Monero the market perception of this future value varies even more widely than for Bitcoin. Given that there is actually minimal commerce currently going on with Monero it is fair to say that the current market perception of the future value must be significantly higher than 0 to support the current prices. |
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...
I may be misunderstanding but I guess you are looking at the emissions decline? Why stop at one year? The halving interval is about 18 months. Let's go out 3 intervals or 48 months. At that point assuming constant mining costs, the price should be 8x. At 2%/year risk-free discount, so four years of discouting....well you get the point.
Something is wrong with this model.
Yes this model has a serious problem. It does not take into consideration demand. |
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A little history is in order here. The low in 2012 was close to 4 USD. The high in 2013 was approximately 300x that amount. So 50000+ USD is actually well within the realm of possibilities here.
Would you pay more than 50,000 dollars for a Bitcoin? Do you know anyone who would? It all depends on the time frame. Some of these traders would not even pay 0.60 USD for 1 XBT just over three years ago.  Now for the real fun we had New Liberty Standard selling 1 XBT for under 0.001 USD in early 2010. |
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