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Sorry, but why is mining that much different than buying coins? You pay either way, there is no free money.
I described, why does not you read me pedantically? buying coins is too risky, like Russian roulette. If I am desperado man, I can risk and play on BTC exchange. But with mining, I have the power gaming computer, I can sell it, if bitcoin mining fails! Or I may simply switch to use this computer simply as computer! 10 000 people, you do not neither think, nor count numbers, nor read when you ask me to write  |
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I'm familiar with how difficulty has increased over time, thanks (I generated my first block on a 4-core CPU over 5 days, when difficulty was something like 8000). I'm looking for a quick summary explaining where this "10,000 frozen" concept comes from: if the price of that knowledge is having to read the entire thread then I'll pass.
In current (too small) bitcoin society, number of miners roughly equal to number of acceptors, the persons who buy & sell for bitcoin & do BTC/$ exchange. It is a *psychological* law for the small society, number of miners ~ number of adopters, because bitcoin's UFO-like nature for 'average Joe'. See, Difficulty was some 240000 FEW days ago, and will be some 440000 FEW days later. Because bitcoin society is too small, I, being 'average Joe', do not trust in it: not because it is cryptographically insecure, but because I doubt in guarantee to easily buy & sell & exchange for BTC world-wide. Now it is something possible but TOO tricky and risky. But, the cryptographic idea of bitcoin is very nice, so I being 'average Joe', want to join and risk. But, because I do not trust in terms of sell-buy, I decide to risk as miner: to buy a computer with ATI 5850x2 GPU to start mining. Or even I have this computer with one ATI 5950 as typical computer-gamer. I want switch it for mining in my free nights. So, FEW days ago I DECIDED to risk and mine. There are not abstract FEW days - they counted from TODAY, 25 may, 2011! Counter is ticking NOW and HERE. Then, I wake up FEW days later (because I was walking, dancing, drinking etc) and DISCOVER, if I start to mine FEW days later, I lost HUGH amount of profit. If I start to mine (FEW+1) days later, I lost HUGE*2^1 amount of profit. If I start to mine (FEW+2) days later, I lost HUGE*2^2 amount of profit. etc. This is ROUGH estimate, of course - but this is sufficient. I DISCOVER EVEN I DID start mining YESTERDAY I have 99.99% possibility that my computer-miner will NOT be compensated by profit at all! Important, that difficulty-doubling interval is FEW days now, not FEW years or even FEW months. So I REJECT this CRAZY idea to mine. I still can risk to play with BTC/$ on exchange, within time interval of few days. BUT As in casino, or Russian roulette. But I never start buy or sell or exchange for BTC the real goods and dollars in SERIOUS business, because I DO NOT trust that too small bitcoin society allow me to easily input or output real dollars or real gold. So I REJECT enter the bitcoin society as acceptor TOO. I being 'average Joe' DOES REJECT bitcoin currency idea at all. You, 10 000 miners & adopters stay isolated, but 10000 people spread world-wide can-not make solid economy, due to unable of diversification of goods being sell or bought by BTC, neither guarantie for real dollar/gold to easily input/output from TINY needle's eye of some 10 000 members of bitcoin society. So, 10 000 CURRENT members of bitcoin society will be isolated, rejected by the rest of world -- 'frozen', and start decay quickly. I have introduced new difficulty algorith's normalization formula, to allow some 1 000 000 - 10 000 000 people world-wide to join bitcoin society as miners, BEFORE considering this society as economics with easy buy/sell/exchange. ---- Then, some premium members call me THE 'idiot'. |
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To spare me having to wade through this entire thread (I've been reading it piecemeal since it started, so I've probably missed a lot of it) could someone explain this "10,000 frozen" idea?
I recommend you read pedantically the whole thread. I hope still, I am wrong for a miracle, and bitcoin society will survive. Don't worry about time spent in reading: just observe how difficulty increases in time @ http://bitcoincharts.com/markets/ |
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DIFFICULTY ALGORITHM IS BLACK HOLE.
May be, even with current exponent BUT with another coefficient, bitcoin were survive, if some 1 000 000 miners & acceptors could enter the game field.
Sad, if bitcoin society will decay @ 10 000 frozen adopters, staying absolutely secure from cryptographic point of view,
due to one incorrect coefficient in difficulty algorithm.
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It may be similar to a pyramid scheme in that those who join early will have the opportunity to make the biggest profit. But in a pyramid scheme, those who join early will continuously receive money from the lower part of the pyramid, whereas in Bitcoin there is no guarantee that the early adopters will get anything at all! Because if the system crashes, then even the those who joined early will lose unless they have managed to sell their bitcoins before the crash. So Bitcoin is more like investing in a growing company. Like investing in Facebook or Google when they were small companies. Or like investing in similar startups that went bankrupt. So there is a risk involved in the Bitcoin system in contrast to a pyramid scheme, plus the most important thing is perhaps that a pyramid scheme is just a fraudulent system leading to a certain crash while the Bitcoin system is something that builds to a potentially very useful monetary system with immense intrinsic social and real value.
I agree with you that bitcoin is not a pyramid by pedantic economical definition. I even trust in honestness of bitcoin software developers and earlier adopters. I disappoint you by two things: 1. I've detected that current adopters - 'premium' members - are NOT sincere persons. 2. bitcoin society is prooven to crash independently on WHETHER current adopters ARE sincere or NOT. |
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Regarding difficulty, I see no problem... The economy is growing at a reasonable pace. Higher difficulty results in a more secure network. Higher difficulty is bad for miners, but good for the overall economy.
Let us stop at this point. An economy with 10 000 frozen members world-wide is not the economy at all. Only time will judge us. FEW weeks. |
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The fact that something increases in value does not make it fraudulent, and it does not make it a pyramid scheme or a Ponzi scheme.
Also, you do not have 100% guarantee of profit buying this week and selling next week.
Let us stop. Second circle? something increases exponetially, and EVEN on the constant field, this is the HUGE problem. what about pyramid, it is just criterium of your honestness: are you also GAMER interested, with opinion biased. If you read me pedantically you see, my schema with attraction of 1 000 000 mining people is pyramid itself till 90% of bitcoins will be mined. If you still do not understand why my pyramid is honest, and your one is wrong, you did not simply read my posts pedantically. hint: I introduced TWO functions - linear increase till 90% BTC mined & exponential decrease after 90% BTC mined. |
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I got in too late for CPU mining to be effective, and my GPU was crap for mining, so I invested USD. It was very risky, but happened to turn out well. I know a lot about risks and risk management, in real life. I barely game, and haven't played anything in several months. I prefer outdoor leisure activities. You have a lot of preconceptions that are just plain wrong, and it's obvious you are too hardheaded to accept you just might not know everything. As far as I'm concerned, you're just a cocky kid who's jealous he didn't get involved sooner. I was pretty cocky too when I was younger (and I still am sometimes), so trust me when I say you're just embarrassing yourself, but you won't realize it until your arrogance gets knocked down a notch.
Oh I see you decide to troll out me, being a fat troll myself? Very nice.))) Let us both LOL)) --------------------------------- No, switch to business. And read thread again - I recognized PUBLICALLY I do ENVY to first 10 000 miners. My emothions is one thing. But the difficulty problem is another. WOW! Difficulty prognosis updated: --------------------------------- Estimated 405913 in 597 blks ---------------------------------- http://bitcoincharts.com/markets/YESTERDAY it was some 360000 in some 1100 blks. YESTERDAY. I CAN NOT buy the ATI 5850x2 pair and start to mine SO QUICKLY. PHYSICALLY. |
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Afterburner make it easy on yourself and understand one simple thing, bitcoin != mining, the mining aspect is just a extra way to make something out of bitcoins atm.
Anders, Clipse, you are newbies, but premium members did confirm that problem I mentioned does exist. They simply have their own interests in pyramid game. Of course, I can exactly TODAY bye bitcoins and, EXACTLY a WEEK later, to sell. And I will have almost 100% guarantie of profit. BUT THIS IS THE PYRAMID GAME. |
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Surely there are LESS than 10,000 people who can create new USD.
Does that make it not a secure currency?
No it does not. I think SHA-256 & 100 miners are sufficient for security. I say if number of miners will be frozen @ 10 000, number of bitcoin acceptors will be frozen at roughly the same boundary world-wide. So I can do bitcoin-to-bitcoin transactions absolutely secure, but I can not BYE & SELL for bitcoin, in practical life. |
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afterburner is either a troll, or too hopelessly ignorant to ever understand economics.
This is just my humble opinion of course...
If I am a troll why do you, Hero Member, still feed me?! I am newbie, NOBODY. You does 'feed' me because you know about this problem. And you are interested to fail me, because you are the gamer on the bitcoin field. I am not. You are interested in good reputation of bitcoin in eyes of newbies to attract them to pyramid. You do attract newbies to BYE & SELL, i.e. to PLAY on exchange, NOT to mine. Because you, 10 000 people, want to be PEERS when mining will be unprofitable. So you want to control the whole bitcoin system - no matter you are NOT single person, but like a parliament consists of 10 000 people. ---- Read all the branch again pedantically - some premium members have been accepted that the difficulty problem does exist. |
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+1 there is very little reward without risk, and early adopters took the risks required to grow bitcoin to the point we're at today
What risk did you have?! Risk to run open-source mining software upon your own CPU, then ATI GPU?! You are computer-gamers so you had already have GPU for gaming. LOL)) Seriosly: What do u know about risks, in real life, guys?! |
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If Bitcoin succeeds, yes, that means that people who got in early will profit. This is true. The same principle applied with Microsoft and Google. It is not indicative of fraud or wrongdoing on anyone's part.
Of course, but I have prooven, it will not succeed, but will be frozen @ some 10 000 miners & acceptors, due to current difficulty algorithm. Then you, premium members, admit your fault, that if Bitcoin succeeds, just pilferers of zero-cost electricity will remain in basis of bitcoin. Whether my proof is completely correct, or not, there is STRONGLY NO WAY to trust in Bitcoin. Bitcoin has been compromised. |
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Look on the bright side: your failure to take advantage of the current opportunity in mining is one less GPU others have to compete against, so by refusing to mine you are helping make mining more profitable for others who are less short-sihted and bigoted (against communities of less than a million people) than you are.
So thank you for doing your part in that way.
Furthermore if this FUD you are trolling here turns anyone else off of mining that again helps those who do grab the bull market by the horns to profit so maybe even that is a good contribution in a backhanded kind of way.
-MarkM-
You speak absolutely right things, but this is just admission of guilt, that you are not more than SMALL PYRAMID gamer. And bitcoin system is SMALL PYRAMID BY DESIGN TO STAY SMALL, TO ALLOW YOU (10 000 people) OUTPUT YOUR MONEY FROM THE GAME IN GOOD MOMENT, FEW weeks LATER. Thanks! |
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Actually, if the price of coins does go down so low compared to difficulty than only people who get "free" electricity can "profit" by ming, that will probably *increase* the number of small scale miners, because having to pilfer probably cuts down the average amount of electricity used. There might be some people who can pilfer enough electricity for ten years straight to run a significant number of rigs but but there are probably more people who could, if it were profitable to do so, buy enough electricity for ten years straight to run a significant number of rigs.
So quite likely if mining is "unprofitable" for anyone who pays for electricity the ratio of small miners to large miners will change in favour of small miners, which could well increase the chance of getting a million small miners with minimum competition from large miners...
-MarkM-
Now, you, Full member, are compromising bitcoin currency idea in REAL TIME, because you does accept, that small pilfer miners will become LARGE percentage of total miners (maybe more than 50% - till 1 000 000 miners). Bitcoin will base upon PILFERS?  ?!!!!!! Change algorithm right NOW! You know the way = linear rising function (< 90% BTC mined) & exponetially decreasing one (> 90% BTC mined). |
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Now there are some 10 000 miners, how much pilferers will remain? 1 000 ?!
Why would the number of miners decrease? I guess when equilibrium is reached difficulty would be at least what is now - therefore at least as many miners as there are now. Of course, number of miners will not decrease - it just will be frozen @ constant = some 10 000 people, while mining hardware is working (for some years). but this freeze is Bitcoin society COLLAPSE. 10 000 frozen people DO compromise the IDEA of world-wide currency. |
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When bitcoins are worth only a mere US$10 each, happening to win a block would be a win of US$500.
If you actually *invest*, long term, as you seem to plan to have your million high-IQ people do, instead of living rig-to-new-hardware
-- SKIPPED
Can you run ten times as many units at one tenth duty cycle or one tenth power or something and make them last more than ten times as long or something? Or just build units with 24/7 duty cycle in mind from the chip-design up? Or *something* more intelligent than abusing consumer low duty cycle hardware?
(How about your million smart people each put a dollar or few toward a specially designed chipset and a datacentre to put it in, forming a mining corporation they each buy into?)
-MarkM-
Oh Mark, you are dreaming in clouds! You think by RIGHT way, but 10 000 people in bitcoin society is NOT the basis for your thinking! At least 1 000 000 people IS basis. I know about Official FPGA miner just released http://forum.bitcoin.org/index.php?topic=9047.0This is NOT the way because there is no reason to trust in 10 000-people bitcoin society. FPGA is UFO that costs over $500! And you can not buy it in arbitrary computer store in arbitrary country in arbitrary amount.. First we need 1 000 000 miners with ATI-GPU for mining duration of few years, THEN we will think about FPGA.. |
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The most efficient miners will set the profitability, im afraid the most profitable miners right now are those who dont pay for electricity, the kids in their parents basements or at their companies or whereever no one cares. The rest of you who pay for electricity and/or maintenance will soon cease to be profitable. good thing i dont have to pay for electricity or maintenance, my mining rig is infinitely profitable right now.
Picture you describe will take place in FEW weeks, with current algorithm. So only the pilferers of electricity power will be frofitable in FEW weeks. Now there are some 10 000 miners, how much pilferers will remain? 1 000 ?! LOL. "secure currency" being mined by .. 1000 pilferers world-wide.)))) People, wake up! |
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He's saying difficulty is too high. If difficulty were lowered, there would be more blocks being created per hour.
I say, we need completely re-normalize current mining (BTC-mass/per unit time) algorithm by two functions - linear increasing one (while less than 90% gold-BTC has been mined) and exponetial decreasing one (when more than 90% gold-BTC will be mined). |
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How exactly would one get (uncompromised) total_mining_power (in a decentralized system)?
For now, How does difficulty know about total_mining_power, to auto-adjust for 1 block generation per 10 min? I suggest, current decentralized algorithm CAN estimate current total_mining_power. |
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