I agree with this statement. Those who state that difficulty drives price are mistaking increased demand for decreased supply. A higher difficulty indicates more miners which indicates higher demand. The overall supply remains the same. Price drives demand for "cheap" bitcoins. As mining is perceived (erroneously, IMO) to be a cheap way to obtain bitcoins, price then drives difficulty up.

Just my 2uBTC

Well... it's already lasted for 2 years... so I don't think it's going to just collapse out of the blue. Price might drop, but every market does that from time to time.

Preeeetty sure you've mistaken satire for treatise...

Psh. You'd be surprised. Some colleges, particularly private ones of a religious nature, treat their students more patronizingly than the high schools they come from. I have a friend who went to a private Christian college in Portland, OR where men and women were not allowed in each other's living quarters except for one hour a week, and that under supervision. And I've heard of colleges in the south where things are even worse. So... yeah. Sadly it may not be all that far-fetched.

Alright, understood. I definitely appreciate the effort then. We certainly need some sort of positive PR going on to counter the smear campaigns. :-/


That's legit. Though you can always just pretend to be in college. It's more or less orthogonal with grade/middle/high school, depending on what college you pretend to be from. :-3

She's a politician. It would be political suicide to back something like this, I imagine. The Federalists certainly wouldn't approve, at any rate.

Absolutely.


I am amused that you state your reason for using a throwaway account while simultaneously negating that reason.

Sure, though I have to admit I didn't keep any raw numbers so I'm just going off the graph myself.

Sections 1 and 3 are really just incidental. I included them for completeness. You can really see the effect of the software between sections 2 and 4, where I have both miners running. In section 2 I was getting an average of around 2.4 Gh/s. That was running Ubuntu 11.04 64-bit, SDK 2.1, and Diablo Miner on the 3x5990 rig and Ubuntu 11.04, SDK 2.3, and Diablo Miner on the 2x6990 rig. In section 4 I was getting an average of 3.3Gh/s. That was running Ubuntu 11.04 64-bit, SDK 2.1, and phoenix with the poclbm kernel on the 3x5970 machine and Ubuntu 11.04 32-bit, SDK 2.4, and phoenix with the phatk kernel on the 2x6990 machine. My clock settings in section 4 were comparable to the clock settings I used in the last part of section 2. As you can see, there's about a 1Gh/s difference between the two sections.

Forthcoming. At work right now.


I mine at Eligius.

Chargebacks. Whoever allows credit card purchases of bitcoins will have to tack on a percentage fee to make up for them. And it'd be no good to favor a single service like that anyway. The official client should, I think, be company neutral. It's a community effort and I, for one, would not be happy if the developers started cutting deals with private interests.

No. It's not a lie. It simply hasn't been addressed in a way that is satisfactory to you. I'm beginning to wonder what it is you're looking for in terms of a response. If you understand the system so well and find it wanting, what more could we possibly say to you? You've already decided on an answer, it seems.


We've given you a lot of reasons why the removal of a base block reward will be a non-issue. I haven't seen you address a single one. How can we give you a satisfactory explanation if you won't tell us what your problems with the ones we've already given are? All you've done so far is call us all idiots and reiterate the points you made in your original post, points which, I might add, a number of people aside from you feel they've satisfactorily addressed. Give us something more to go on and maybe we'll get somewhere.


Q.E.D.


Wrong. The Keynesian economic model you refer to is based on indivisible units. Bitcoins are, in theory, infinitely divisible. In practice we only allow transfers of at least 0.00000001 bitcoin. This can be changed, though, as smaller transactions become necessary. Thus deflation in the Bitcoin economy will look quite different from deflation in any other economy. At worst it will eventually reverse and result in inflation when someone breaks ranks and spends more than usual. But liquidity traps are not possible with bitcoin, at least not in theory. (And there is no reason at present to suspect that theory is wrong, from where I stand.)

Correction noted and made. Thanks. :-)

You have. The way I understand it, the Bitcoin algorithm always seeks to have 10 6 blocks an hour solved.¹ If everyone were to stop mining tomorrow, the difficulty would eventually plummet.


Right. But if the network becomes open to attack due to a drop in the network's hashing power, people will become less willing to pay for bitcoin.


Kinda. I don't actually think we're looking at a system where one drives the other. I think we're looking at a feedback loop. But this is irrelevant. Sweft, your concerns have been voiced by many a newbie before you and addressed many times before. It's a failing of this community that we don't have a sticky to address your concerns, choosing instead to react with hostility toward you. (Though your calling everyone an idiot probably didn't help your case much.)

I think you are overlooking the fact that the base block reward will be diminishing gradually, not simply going from 50 to 0 in 2040. Hashing will still take place afterward as by then (as it has been said before) transaction fees will have become the norm for "must-take-place-ASAP" transactions. Because the base block reward is set to diminish gradually, there will be plenty of time for the mining ecosystem to begin adapting to the upcoming change. The coping mechanism may be built into the system in the form of transaction fees, or a new as-of-yet-unknown one may be built on top of it. After all, the bitcoin payment processors that are bound to crop up will have a vested interested in keeping transactions going and may institute fees of their own, much like banks have now, to compensate mining cost (if indeed it becomes unprofitable.)

The bitcoin system is extremely robust, I think you'll find. Hopefully the cold reception you've received from this community of bitcoin veterans won't put you off them too much.  

Edit:
1. My original claim of 10 blocks an hour was incorrect. According to the wiki:
From https://en.bitcoin.it/wiki/Category:Mining

+1 to everything you just said.

On another note, I expect the Mt. Gox price will be feeling a bit of a bump in a day or two as people start reacting to all this recent press. :-)

I haven't tried phatk with 2.4 on my 3x5970 rig, though, primarily because I can't get pyopencl to accept the 2.4 SDK on Ubuntu 11.04 64 bit and I can't get my three cards to work with Ubuntu 32 bit. Otherwise I'd probably be 2.4 and phatk all the way.


Yeah. It's hard to come by cards at a decent price these days, for sure.

For those of you who are wondering how much difference the right combination of OS, SDK, mining software, and overclocking can make, learn from my tale as illustrated by this graph:


Section 1:
This is where I began setting up my rigs. One 2x6990 running Ubuntu 11.04, SDK 2.3, Diablo Miner. Clocked at 950/300. Probably throttling a bit due to overheating.

Section 2:
Rig #2 comes online. It's a 3x5970 running Ubuntu 11.04 64-bit, SDK 2.1, and Diablo Miner. Stock settings in the first section. With each break you can see where I took the system offline to try retooling things. The software stayed the same, but I experimented with different core overclocks and memory underclocks. At the end I was running 900/175 on the 2x6990 and 850/300 on the 3x5970. Overheating is a pretty big problem for a couple of the 5970s, even though I'm using PCIe extenders. The 6990s are cool and stable, though only giving me a combined output of 1Gh/s.

Section 3:
A gap where I take the whole system down again to install SDK 2.4 on the 6990 machine. Clocked at 900/300. I also switch to the phatk kernel on phoenix. The part of this section after the gap is my 2x6990 rig all by itself.

Section 4:
I put a fresh install of Ubuntu 11.04 64-bit and SDK 2.1 on my 3x5970 box and start using the poclbm kernel on phoenix. Clocked at 825/175. Everything's running cool, with a peak temperature of ~79 degrees celcius on my 3x5970.

Full disclosure:
Both rigs are caseless. The 6990 rig runs in the upper 60s to mid 70s range with 3 fans. The 5970 runs in the upper 60s to 70s range with 2 fans. All fans used are Scythe Ultra Kazes. I also have a table fan blowing directly on the 5970. Both rigs sit beneath an open window. It gets to be around 49F/9C at night where I live, which keeps things nice and cool. So far I've noticed a slight difference between my daytime hashing power and my nighttime hashing power due to the temperature changes.

81 degrees? Are you underclocking the memory at all? I'd imagine a 2x6990 setup running at 830 would be a bit cooler than that...

Wait, what has it been doing with your GPU? I've been using it for over/underclocking my GPUs and I can't seem to get anything near what I should be getting.

Hey, if it's too complicated for you, just run these scripts:

You might have to type
chmod +x prep_up.sh up_all.sh
first to get them to run.

They're what I've been using to set up my 11.04 boxes. It installs the 2.3 SDK, though, which I've been led to understand is inferior to both 2.1 and 2.4. Haven't been able to get 2.4 to work on my machines yet. Probably because I'm trying to overwrite the old 2.3 install. I plan on trying from a fresh install using this guide sometime later:
http://forum.bitcoin.org/index.php?topic=10608.0

If you have less than 4GB of RAM it's my understanding that a 64-bit OS will only serve to add overhead. I may be wrong about this as I haven't taken time to do much research. It's just what I've heard.