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There's nothing wrong with your calculation, as long as you ignore the fact that you misplaced the decimal point and it's actually 2.8 BTC = $20.9, or ten times the electricity cost.
(and your stated difficulty is more than the bitcoincharts estimate).
Mining is insanely profitable and will remain so for a while, get used to it.
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Keep in mind that the difficulty is rapidly increasing.
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Perhaps Bitcoin is another type of scheme? Print a new kind of money, then get people to give you fiat money or gold over the next year. Someone out there has LOTS of coins that they likely mined from during first year, "Bitcoin Year Zero". They could slowly cash in and buy a big mansion. (instead of giving to the faucet or whatnot). A mansion they didn't earn by labor. Granted, this scheme produces a good currency, but someone got rich quick.
If Bitcoins really take off then I will have gotten rich quick too. I am not sure what I did to deserve it, but I know I won't be giving any to the naysayers. I do feel sorry for those that haven't heard the "good news".
You made a risky investment and it panned out. Try doing some angel investments to get a better feel of how that works. See also https://en.bitcoin.it/wiki/FAQ#Doesn_t_Bitcoin_unfairly_benefit_early_adopters?I made a suggestion before that this point should be discussed in the OP, but it was so far ignored. |
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@hiakuryu - what brocktice said, and: but what is the crypto doing? ... What is it that it's doing? ... What are we actually doing with our computer cycles? What is it that we're actually decrypting or encrypting?
See protocol specification. And you're not encrypting or decrypting anything, you're hashing. No one knows who he is or why he's done this.
That's kind of the point, we don't know and we don't care, because it's not about him. He doesn't have more power over Bitcoin than anyone else. People talk about transparency, trust and decentralisation in the system
People talk about transparency, decentralisation and the fact that trust is not needed because the Bitcoin protocol relies on proof-of-work, not trust. (Compare to actually making trade with bitcoins, which requires some sort of trust, reputation or mediation).
2. All transactions are recorded in the block chain which every node has. The transactions contain no information about you, so unless you give away the connection between 1fhdjHFS98DKJjdksDS9euDH44 and yourself then no one knows it was you who sent 3.3BTC to 1HE9hd9ejwQ3QnvJKSL4LKccn. I don't know of any countries where small gifts to friends are taxed. It's pretty wrong to say that all governments tax all transactions. Governments are slow as hell.
Isn't this a vulnerability? What if a Dull starts transacting 0.01 BTC to another Dull and back again, continously? the chain will grow bigger than my harddrive is?! There are mechanisms in place to stop transaction spam. |
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You can print your own if the bar is properly equipped. Put exactly 0.5 BTC in an address and print a QR-code of its private key. You give it to the bar, they scan it, claim the coins and give you a beer. They might also be willing to give you the beer in advance, and sort it out later if it turns out you gave them a fake.
Unlike bitbills, they will have to claim it on the spot, they can't keep it for future use as a note.
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And now 1 block is 50BTS, when will it be 25BTS(date?)
currency rate to USD is not stable too, right? When you try to sell BTS for USD do you always successful?
1 Block on average = 2^32 * difficulty hashes, so now it's about 1.05 billion Mhash. 25 BTC will start with block 210,000 (or something like that). The date is not known, but it may be roughly September 2012. If you move BTC to mtgox you will succeed in selling them, at the right price. |
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another thing I am interested in and maybe one of you guys could shed some light on this
theres a real trend where on super short rounds like < 1 min , my reward is significantly higher than a more average time round
do you guys have an idea about that?
On very short rounds, your variance will be higher. So you should expect to receive high payment in some and low payment in others. It's possible you've been "lucky" and so far seen only high payments in such rounds. im not putting down slushs pool, It is the best choice for me right now, I have significantly mined on the top pools recently and have been studying this very subject. I love Slush's pool but I tell you I loved it more 100 g/hash ago.
I know that theoretically the round times and the rewards per share should all equal out, I understand that but the reality is because of the luck involved in finding blocks, they just dont.
Its a combination of luck/difficulty and user/speed ratios
DeepBit's average round time is the shortest anywhere, and because of all the competition the rewards are very very small, however they still get nailed with 90 min rounds every now and then... plus the fees kill you
if you go to the smaller guys like BTCMine or BTC Guild you get much bigger rewards per round, but those guys are still seeing 4, 5 hour rounds
in theory yes it all equals out in the end but I have really been studying this to some depth and I really believe there is a sweet spot so to speak, where you have a high enough g/hash range to effectively mine but not too high to make competition for the 50 BTC per round too fierce.
I am actually going to write an article about this and publish my findings, there's a real quantifiable speed/user ratio that does make a difference despite what everyone says about things equaling out.
sometimes the way things are supposed to be arent 100% true.
To put it gently, I'm very skeptical of your findings. Please let someone review them before you refer everyone to your article, otherwise it could just spread confusion. |
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I really think you're taking this far too literally. I specifically said I wasn't suggesting anyone do this. For practical purposes it is obviously (so obvious that I can't believe I've been sucked into this) easier to encrypt your wallet and store it in the cloud. I'm also assuming that computers exist and that the Internet still works; but really these are just nit picking what was not ever a practical suggestion. You miss the point though, which others seem to have got: Bitcoin wealth can (note: can, not should) be stored with no physical presence whatsoever. To me, that is magical. If it's not to you: fine, let's agree to disagree and say no more.
I certainly do get your point, though I don't feel about it as strongly as you are. For me the magic of Bitcoin is more about the practical ways one can secure his own wealth. On retrospect, I agree my original comment was not relevant, especially given that its premise originated in insufficient research on my part about ECDSA. |
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Hmmm is having merchants directly accept bitcoins for goods really as important as seems hitherto to have been thought?
Yes. Bitcoins will have no value of nobody accepts them as payment. Hmm. How do we know that? Perhaps they would have pure "collectable" value as the first block chain currency. I guess they will. But it will be negligible compared to the value they can have as the de-facto global currency. |
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If you still have that anti-fraud software available, I'd love to talk to you about licensing it for some of my bitcoin projects to save us some time on that end.
Send me a PM!
Brad
You'll probably get a faster response sending him an email, see http://ndrix.com/ . |
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Hmmm is having merchants directly accept bitcoins for goods really as important as seems hitherto to have been thought?
Yes. Bitcoins will have no value if nobody accepts them as payment. |
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That then is the power of bitcoin: all your wealth can, in principle, be stored in your head. There is no more secure location. I'm not suggesting that we all do this, it would not be practical -- what is important is that it is possible.
For a variety of reasons, it will be much more practical to encrypt your wallet.dat file and memorize the password. Quite right; if only I'd thought of saying that in my post. I am making a philosophical observation about the nature of bitcoins, not suggesting we all calculate SHA256 in our heads. With a blank computer and my memorised private key, I could restore my wealth, with no external storage needed. Your encrypted wallet.dat still needs storing somewhere, and brute forcing the wallet is possible. I posted because I find the idea of wealth stored in my head an incredible one. Could I store gold in my head? Can I store dollars in my head? No. They are all stored by other's on my behalf, or stuffed under my matress -- none of which makes my wealth really mine. You do need external storage, namely the block chain stored on the network nodes. If you consider it as given since it's replicated on thousands of nodes, you should give the same treatment to a wallet.dat file if it's stored in a decentralized storage system (though I don't know of any currently existing system that fits the bill). |
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"Vires in Numeris" = "Strength in Numbers" is appealing the most to me. It is simple and works on more than one level at the same time.
Wow, I really like "strength in numbers". Nice thinking, Vlad! It's epii who suggested this (in this thread anyway). |
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Bitcoins are tied to electronics aren't they? You are stuck needing a smartphone to be able to spend your coins out in the world, right?
Wrong.
I make the following observation because it struck me as being a powerful demonstration of what makes bitcoin so good.
Imagine you funnel all your bitcoins to one master address. Your entire wealth is now represented by the private key associated with that address.
With a little bit of effort one could memorise that key. I know it's a long number, but humans regularly accomplish far more impressive feats of memory. The general consensus is that it does not require special intelligence, nor special memory skills. All humans have excellent memory's if they just choose work at it. Once you have memorised that key, it can be deleted from your wallet.
That then is the power of bitcoin: all your wealth can, in principle, be stored in your head. There is no more secure location. I'm not suggesting that we all do this, it would not be practical -- what is important is that it is possible.
Perhaps everyone else has already realised this; if so, my apologies for wasting your time.
For a variety of reasons, it will be much more practical to encrypt your wallet.dat file and memorize the password. |
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@ Rlutz - FAQ added. @ Suggester - As I said, I agree that Bitcoin is currently highly speculative which is unhealthy. The way to solve this is to get more mainstream shops to accept Bitcoin payments. Why do you keep obsessing about speculation as if that's all there is to Bitcoin? In a pyramid, each person can own at most one ticket and can sell as many copies of that ticket as he likes. This will necessarily collapse as we run out of people without tickets. In Bitcoin I can have as many bitcoins as I can get, and I can send each only once. Thus it's like any other commodity. In a ponzi, there is someone running the show who promises high returns on investment. In Bitcoin - even in its current unfortunate highly speculative state - there's no one at the top, and there's nobody (except some crazies) promising returns. It's you who evaluates the situation (perhaps based in part on the opinions of some people) and expects them to rise. If your evaluation turns out correct, more power to you. |
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Chalk it up to ATI's confusing naming scheme. 6870 is a weaker card than 5870, also I think miners are not yet optimized for 6XXX.
A rig with two 5970 is very solid if you can find some. If you want to add to an existing machine, a 5870 is good.
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First: Some people mine hundreds per day, was thinking of them I suppose.
That logic works if you consider bitcoins as play money people got for free and are looking to unload. But it's a serious commodity that people spent resources to obtain and can sell for other currencies, pay with for goods and services, or hoard. I get hundreds of ILS for my day job every day, that doesn't mean I'm easy on spending them. Second: That is a problem, I will need to setup some kind of system. For now people can PM me with their amount and wallet.
You can still do what you intended, you just need to know what you're doing and familiarize yourself with http://blockexplorer.com/. |
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I'm sorry Suggester, but your analysis is very wrong. Now the only problem is that this "real exchange value" itself would be determined by electricity, computer deterioration, and time expenditures needed to generate those BTCs. We have a loop.
Myth. The exchange value will be determined by the people willing to buy and sell bitcoins, and mostly affected by the volume of commerce done in bitcoins. In the future, mining rewards will be almost solely transaction fees, which I assume will be about 0.1%. So I think it's safe to say miners will be about 0.1% of the economy. In that capacity, their decisions to hoard, use or sell bitcoins will affect the market, but they're only 0.1% of it. Every four years the average BTC generator will need to spend double the effort to create the same amount of coins.
You're forgetting that eventually mining rewards will consist in transaction fees. Until that point, halving will create a combination of decreased difficulty, increased BTC value, and decreased profitability for miners (which they'll have to consider in their business plans in advance). That means that he will constantly demand higher prices to compensate for his costs
He can ask whatever he wants, he can't force anyone to buy at that price. There will be other coins circulating, and all miners combined will be a small part of the economy. only an idiot would spend a currency which he is certain will double in price within 4 years, effectively granting about 19% annual interest--significantly better than almost any bank or mutual fund.
There is nothing certain about it, bitcoins are a high-risk investment and will be in the foreseeable future. And again, halving will only have a small effect on the bitcoin value. Anyway, a combination of growth and speculation allowed the bitcoin value to increase tenfold in a month without any relation to halving. People will be hoarding BTCs forever and it will be regarded as a phony investment with no real value
People will hoard some of their bitcoins, but most of them will know that their investment gains value by people using it and will be happy to use it themselves. This will self-balance to some degree. If nobody uses bitcoins, any speculative bubble will burst, making people less tight-fisted about spending bitcoins, restoring some level of commerce. sort of like the good ol' Pyramid (Ponzi) Scheme where everyone purchases a ticket just to sell it to someone else later for a high profit until the whole system collapses when it runs out of new victims.
This is nothing like either a pyramid or a ponzi. This scenario can only be avoided if the cost of generating new BTCs got relatively constant.
Your premise has been debunked, so most of the rest is pretty moot. Which can only happen if the participating nodes needed to exert a more or less constant amount of work (cost) to generate new BTCs.
Given advances in hardware and software, and the development of special-purpose mining hardware, it will be very difficult to find an objective system that will make the cost of creating BTC constant. Also, once in a while the hashing algorithms used will be changed which will completely shuffle the cards. So what's the solution? Well, as you might have already guessed, we should remove both the 4-years doubling interval rule and the 21M limit. Just let BTCs continue to be created forever.
I'm not against this per se. A system where the currency continues to be generated at a predetermined rate can work. But people signed up to Bitcoin on the understanding that 21M is the limit, so this must be a separate currency. All that said, I agree that it seems that currently bitcoins gain their value more by speculation than by use. This is unfortunate, but is part of the growing pains and should stabilize to some degree in the future. "Stability" here means - the purchasing power will not fluctuate too much, but will still increase due the spread of Bitcoin at first, and due to the growth of the economy later. |
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