So why aren't they presently taking those actions? One possibility is that 0.1% hedges are simply too small to bother. This may happen but only at some 1% or higher level. This is a great point too. 0.1% hedges are perhaps too small to bother with; on the other hand, should the market-cap significantly increase, 10% hedges would be painful. The "hedging dynamics" will get interesting around the 1% level I think (as you implied as well). The bitcoin game has the interesting property that incentivises/allows easier access for smaller (yet more knowledgeable) players to get in first ... the entrance only grows large enough for the next larger level of players at each stage ... the biggest position takers in fiat terms will probably be the last to arrive under this logic. Isn't this cool? I like that property. The people have the chance to turn the pyramid upside down in a sense... I think we need more education, though: a lot of people still seem to think they have to buy a whole bitcoin (who can blame them, the term 'coin' implies this) and the /r/bitcoin crowd happily sends everyone to circle/coinbase. |
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oh my. we've entered silver free fall. there's no support until about 13.43:
hmm, should I buy at $15 or at $5? Maybe I'll do both... |
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shorts on bfx at 1 month (or longer) high > 10 kBTC  yeah, i like the looks of that. I'll get excited once the ratio of longs / shorts drops below BTCUSD price. Currently it's at 2000 USD/BTC. |
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shorts on bfx at 1 month (or longer) high > 10 kBTC |
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I agree with you. There have been lengthy arguments about "hashrate follows price" or "price follows hashrate" for years now. I'm in the former camp.
Also: supply is not a function of price and cost in the case of bitcoin mining. Supply is pretty much constant, miners just fight among each others over the fixed-sized cake. So only way in which mining influences price is by one variable: the percentage of coins sold by miners into the market.
I think this percentage is increasing with falling price, up to some point... some miners will reach > 100% and switch off. If they want BTC they'll buy instead. Mining efficiency (of the remaining miners) increases and cost decreases. Their selling-percentage decreases. All this has positive effect on price, further decreasing the percentage that has to be sold to cover cost. I'm not sure we've reached low enough price (or competitive enough mining landscape) for this to play out to a meaningful extent.
If the price drops so that the increased portion of the cake they earn is worth less in fiat terms, then would they not need to sell a larger percentage of coins to cover costs? Yes, at first. What I meant was when inefficient miners start to drop out, the collective selling-percentage would decrease again. Well, I see two counteractive forces at work - each remaining miner will solve more blocks and at a lower cost collectively, yet the reward from each block is shrinking in terms of fiat. Therefore, to lower the selling-percentage, the benefit of the former must outweigh the latter for a given price drop. Maybe this is what you're saying however. Kind of. My thinking was that the first force (miners have to sell more due to falling price) would be active first. At some point the second force would come into play (increase of overall efficiency causes miners to be able to keep more coins) which would have a positive effect on price and could tip the scale towards an upward movement, which would in turn reverse the effect of the first force and result in a rally. As said, I don't think we're at that point yet, though. |
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There is alot in a name. (I thought it was a parody) This chap overlooks a fiew fundamental problems with money like how to distribute it and what gives it value. I don't remember him talking about money much. I thought the whole idea was interesting... based on many assumptions, but given the right conditions, this could be done. On the other hand: maybe it's just an academic exercise. btw regarding all the discussion about mining. I can't wait for the cost do double sometime in 2016  |
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When calculated in the OP over the time period from March 14, 2013 to March 13, 2014 the average increase in the difficulty and hash rate was 23.92% per adjustment period and the average length of each adjustment period was 11.38 days. Recalculated over the period June 29, 2013 to June 29, 2014 it was 23.45% and 11.41 days. Now, recalculating over the period August 24, 2013 to August 31, 2014 it is 21.12% and 11.63 days. Assuming the network growth rate over the next year is the same as it was this last year we get: Hash Rate Power Energy Cost Cost
Date Difficulty TH/s MW MWh $/Period $/BTC
--------- ------------------ ---------- ------ ---------- -------------- ----------
11-Sep-14 33,220,936,877 237,808 238 66,349 $6,634,853 $131.64
23-Sep-14 40,236,446,759 288,028 288 80,360 $8,035,984 $159.44
04-Oct-14 48,733,473,526 348,853 349 97,330 $9,733,002 $193.12
16-Oct-14 59,024,880,009 422,523 423 117,884 $11,788,392 $233.90
28-Oct-14 71,489,598,585 511,750 512 142,778 $14,277,833 $283.29
08-Nov-14 86,586,583,575 619,820 620 172,930 $17,292,988 $343.11
20-Nov-14 104,871,710,060 750,712 751 209,449 $20,944,876 $415.57
02-Dec-14 127,018,241,359 909,246 909 253,680 $25,367,960 $503.33
13-Dec-14 153,841,618,762 1,101,258 1,101 307,251 $30,725,098 $609.62
25-Dec-14 186,329,486,300 1,333,819 1,334 372,135 $37,213,544 $738.36
05-Jan-15 225,678,056,071 1,615,491 1,615 450,722 $45,072,202 $894.29
17-Jan-15 273,336,153,086 1,956,646 1,957 545,904 $54,590,430 $1,083.14
29-Jan-15 331,058,561,407 2,369,846 2,370 661,187 $66,118,694 $1,311.88
09-Feb-15 400,970,635,767 2,870,303 2,870 800,815 $80,081,465 $1,588.92
21-Feb-15 485,646,557,708 3,476,447 3,476 969,929 $96,992,858 $1,924.46
05-Mar-15 588,204,117,648 4,210,593 4,211 1,174,756 $117,475,554 $2,330.86
16-Mar-15 712,419,512,763 5,099,775 5,100 1,422,837 $142,283,732 $2,823.09
28-Mar-15 862,866,387,600 6,176,732 6,177 1,723,308 $172,330,835 $3,419.26
08-Apr-15 1,045,084,236,901 7,481,119 7,481 2,087,232 $208,723,207 $4,141.33
20-Apr-15 1,265,782,371,309 9,060,961 9,061 2,528,008 $252,800,823 $5,015.89
02-May-15 1,533,086,956,002 10,974,431 10,974 3,061,866 $306,186,635 $6,075.13
13-May-15 1,856,840,218,301 13,291,983 13,292 3,708,463 $370,846,321 $7,358.06
25-May-15 2,248,962,841,151 16,098,949 16,099 4,491,607 $449,160,670 $8,911.92
06-Jun-15 2,723,892,885,897 19,498,682 19,499 5,440,132 $544,013,236 $10,793.91
17-Jun-15 3,299,117,405,623 23,616,363 23,616 6,588,965 $658,896,517 $13,073.34
29-Jun-15 3,995,816,323,188 28,603,604 28,604 7,980,405 $798,040,547 $15,834.14
10-Jul-15 4,839,642,281,734 34,644,038 34,644 9,665,686 $966,568,646 $19,177.95
22-Jul-15 5,861,665,181,962 41,960,074 41,960 11,706,861 $1,170,686,065 $23,227.90
03-Aug-15 7,099,516,184,307 50,821,092 50,821 14,179,085 $1,417,908,463 $28,133.10
14-Aug-15 8,598,773,298,472 61,553,356 61,553 17,173,386 $1,717,338,634 $34,074.18
26-Aug-15 10,414,639,578,109 74,552,032 74,552 20,800,017 $2,080,001,680 $41,269.87
07-Sep-15 12,613,975,712,232 90,295,733 90,296 25,192,510 $2,519,250,952 $49,985.14
Thanks so much for this. Yes, something has to give. If it's the price, some people will come out of the woodwork and say this is proof that "price follows hashrate". I will still disagree. If the hashrate actually goes down (like in 2011), at least part of the reasoning that "hashrate follows price" is supported (namely: "if price is lower than production cost, miners will switch off their equipment"). If nothing gives (bitcoin price is below production cost) we know: Either at least some miners are economically irrational or we're making wrong assumptions about either the production cost or the price miners are able sell at. Interesting times ahead |
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According to the OP, this is the official thread for enjoying wine and cigars. I recently came to Malla after a longish break. While I was quietly minding my own business with some reasonable quality wine (Dow's 20yo Tawny Port) and some really nice vintage cigars, including, but not limited to Bossner Baron 2000, Davidoff Eminentes, and Diamond Crown 2004, I decided to go out since it had already become dark.
The day had been really quiet of cars, so a sight of a large pick-up coming, immediately caught my attention, especially as it turned from the road to my yard. When walking towards it, it did not stop to greet me, rather passed, went to turn around in the other side of the yard, and passed me again while I just walked towards it and stared at it in my friendly way.
A similar incident, my staff told me, had already happened this week with a car with no licence plates.
I should have no enemies in Estonia, and I am not doing any business here really that would interfere with somebody else's business without me even knowing. So what comes to the incidents, I have to deduce that either it is some larger agency conducting intelligence (very plausible, because several agencies are not doing their job unless they have a plan for raiding this place, just in case) or common thieves conducting intelligence in a similar way, but for somewhat different ends.
The conference is starting Tuesday, so we have had some preliminary action. Hopefully this was it, but you never know.
how subtle |
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I agree with you. There have been lengthy arguments about "hashrate follows price" or "price follows hashrate" for years now. I'm in the former camp.
Also: supply is not a function of price and cost in the case of bitcoin mining. Supply is pretty much constant, miners just fight among each others over the fixed-sized cake. So only way in which mining influences price is by one variable: the percentage of coins sold by miners into the market.
I think this percentage is increasing with falling price, up to some point... some miners will reach > 100% and switch off. If they want BTC they'll buy instead. Mining efficiency (of the remaining miners) increases and cost decreases. Their selling-percentage decreases. All this has positive effect on price, further decreasing the percentage that has to be sold to cover cost. I'm not sure we've reached low enough price (or competitive enough mining landscape) for this to play out to a meaningful extent.
If the price drops so that the increased portion of the cake they earn is worth less in fiat terms, then would they not need to sell a larger percentage of coins to cover costs? Yes, at first. What I meant was when inefficient miners start to drop out, the collective selling-percentage would decrease again. |
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I believe that the next one might carry us north of $10,000. The longer time we spend here, the more explosive it gets. The supermove from $2 to $266 (133x price appreciation) took 17 months. Extrapolate that with the starting point of $340 in 2014-4-11.
The bottom called is $340 from 4/11/14. Please read the entire OP before saying he's wrong. He may become wrong a few days from now, but as of this very moment we have not broke the bottom that he called. Lol, OK. He asks you to extrapolate from 4/11/14. At no point does he call that date the bottom he's calling. It's very strongly implied. If we're going to start splitting hairs, we could as well say that "rpietila calling the bottom" is not a statement of fact. Just like "Risto flying to Mars" is just a hypothetical. So let's do away with the crap. The way I see it he called $340 the bottom. If it goes substantially below that for a non-negligible amount of time in most markets, his call was wrong. No big deal (unless you switched off your own brain and blindly followed what he said. In that case I can understand why some people here are angrily discussing this subject, although it's not merited). Risto also called 300,000 USD/BTC in 2013. He was wrong. We all had our fun, the price is payed. He's also been right many times and his thoughts are usually very valuable, sometimes intriguing and always interesting. |
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... However note that the rate of growth has started to slow down instead of speed up at around November '13:  That's actually kinda good. The sooner we get to a mature mining market, the better for the security of bitcoin in general. I'll consider bitcoin a little less exposed when a few things happen: 1) There are no more hash/watt exponential gains to be had from a mining-tech jump; eg, going from 28nm ASICs to 22nm, etc. We may at that point now, actually. The gains from new process tech are certainly diminishing (as the taper in difficulty rise probably shows). 2) The power requirements of a 51% are an order of magnitude bigger than the world's largest datacenters. I also look forward to a 'saturated' mining market. Miners would operate at marginal cost and a very large part of expenses would be operational (power, maintenance), not capital investment. Everything else being equal (especially bitcoin price), hashrate should then grow according to moore's law and miners would sell close to all coins into markets. Last year I've been thinking we might reach your point 1.) in the first half of 2014. This hasn't materialized, mining technology is still improving faster than moore (still catching up on other fronts). I'm not sure your point 2.) means less danger for bitcoin. A 51% attack could be distributed across multiple datacenters or done using pools. It's hard for me to imagine someone (govt?) doing a 51% attack this way anyway. The most likely scenario I think would be governments forcing miners (51% of them) to censor transactions and consider blocks containing censored transactions as invalid. But for that to be a meaningful tool for them (say they want to cut off wikileaks for example) they first need to have better coin-tracking (hello coinbase, circle,...) |
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Can someone explain me why the hashrate going up is good for the price?
I mean, I know economics. I know that the supply is a function of price and cost. So if cost goes up for miners, then the supply will shrink. But why the hashrate should be consider as proxy of cost?
It's is quite possible that the cost for most of the miners is actually going down while the hashrate and difficulty are increasing. If there is a consolidation of the mining market, big mining farms are making economy of scales, so their margins increase while the hashrate increase too, so they could very well selling a greater proportion of their mined coins to enjoy their high margin.
All of that to say that I am not convince that the hashrate is a good proxy for evaluating the cost of mining BTC, therefore not necessary a good indicator for the future price of BTC.
I agree with you. There have been lengthy arguments about "hashrate follows price" or "price follows hashrate" for years now. I'm in the former camp. Also: supply is not a function of price and cost in the case of bitcoin mining. Supply is pretty much constant, miners just fight among each others over the fixed-sized cake. So only way in which mining influences price is by one variable: the percentage of coins sold by miners into the market. I think this percentage is increasing with falling price, up to some point... some miners will reach > 100% and switch off. If they want BTC they'll buy instead. Mining efficiency (of the remaining miners) increases and cost decreases. Their selling-percentage decreases. All this has positive effect on price, further decreasing the percentage that has to be sold to cover cost. I'm not sure we've reached low enough price (or competitive enough mining landscape) for this to play out to a meaningful extent. |
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the Bitcoin Virus won't stop replicating:  Someone over at blockchin reads this thread, that chart looks a lot more smooth. Still this hashing increase is in my view is phenomenal. It is absolutely phenomenal. However note that the rate of growth has started to slow down instead of speed up at around November '13: |
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the best thing to do is
Sell coins NOW and Get a real job
This is surely the dumbest advice I have seen on this forum. Welcome to ignore. Why ignore people with different opinions? I usually just ignore people with no arguments when asked. I agree, though... it's very bad advice. Both parts of it, really. As Amir says: "We have all this incredible technology and yet people work longer hours for less pay in shitty jobs. There's something wrong here." About the selling Bitcoin part: don't be ridiculous, as Risto argued, it's rational to hold even if it's just a 15% chance of another ten-bagger waiting for us. |
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https://www.youtube.com/watch?v=JakSo1Z8Me8#t=455It's very ease to deseminate the wrong information or to diseminate rumors that may damage certain companies or bring the price down or bring the price up. If we put that together with the lack of experience of the investors in bitcoin today and we put that together with the speculative quality of the whole environment right now and the fact that the market is so small you can effect and see great fluctuations in price based on social media
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damn... first bitcointorrentz.com now bitfetch.com?
sucks.
I need such service!
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can you use the trezor simultaneously with mytrezor and electrum?
yes |
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Yeah, I noticed that as well after I posted it  It was a combination with GIMP. I did the "buy" in inkscape because I don't know how to do the hollow text in Gimp. Cropping and insertion of bitcoin address was done in Gimp. Both great programs. Something along the lines of text-to-selection, grow selection, fill selection. sounds cumbersome. easier to do the qr-code-insertion in inkscape as well if use of a single tool is the goal, I'd say. |
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