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Absolutely stunning. Great work all around! The idea is fantastic, the execution is flawless, and there's a nice UI to boot.
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What about the idea of comparing transaction volume to other payment processors?
Paypal has a transaction volume of about 16 billion US$ per year.
Bitcoin's current transaction volume is about 300,000 BTC per day. If we assume a market price of 90$ that would add up to about 10 billion US$ per year.
So if Bitcoin usage and price stays at least at the current level then it is already 62% of Paypal.
The parity price for Paypal (assuming transactions stay at least the same) would be:
147$
Of course a significant amount of usage for Bitcoin is exchanging for Fiat currency while Paypal is almost all for goods and services.
This is off by an order of magnitude. It is $165 billion USD per year. |
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Are you using bitcoin plus on your website or running it on your own computer?
If you are running it on your website and crowd sourcing the mining, then it may work out for you. But take into account that you would need a sizable amount of traffic to your website and users need to accept a big ugly popup that warns them that a script is running on your website. If 1 million people visit your website for 100 seconds each every day, that's a 100 million seconds at 0.5 MHz. That's roughly 600 MHz, or less than 1% of an Avalon GPU. You'll get less than 0.05 BTC per day. |
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This software is absolutely useless. It is quite possibly the biggest waste of money I have ever seen. You get more money from http://dailybitcoins.org/. The "hashrate" of this miner, on my CPU, is less than 1 MHz. Regular CPU mining gets 5 MHz. A single GPU gets 200 MHz. A single Avalon ASIC gets 66000 MHz. If these numbers don't make sense, let me present them in a table: | Method | Hashrate | Time for 1 BTC @ current difficulty | | BitcoinPlus (Google Chrome) | 0.58 MHz | 95 years | | BitcoinPlus (Native Java) | 1.33 MHz | 27 years | | DailyBitcoins | | 11 years | | Ufasoft CPU Miner | 4.77 MHz | 7.5 years | | One GPU | 200.00 MHz | 2 months | | One Avalon ASIC | 66000.00 MHz | 5 hours | | One ASICMiner farm | 12000000.00 MHz | 96 seconds |
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So it looks like it won't meet its goal: https://www.bitcoinstore.com/. What will happen? Will Bitcoin Store mark up all its items? Will it close permanently? |
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Randomly, when browsing bitcoin forum, it crash IE 10 with this dialog:
Message: "Internet Explorer has stopped working. Windows is searching for a solution on the problem".
After a while, the page reloads
"A problem with the website made Internet Explorer to reload the tab".
Maybe some admin could fix this website problem?
Version: latest - 10.0.9200.16521
I got 2 words for ya. GOOGLE CHROME! I don't see why people object to a proprietary software made by one company that respects your rights and doesn't track you, then insist on using an "open-source" (translation: based on an open-source project but with a load of proprietary resources and code) software made by another company that sends the URLs of websites you visit to Google. Just a while ago, on these forums, someone reported that Google was indexing several instawallet wallets. How? Google knows exactly what you're browsing. |
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Read your linked post. I think you're disregarding one-time cost of the asic miner unit. With asic the one-time cost is the large factor, energy cost less so. At least for now.
So I'm guessing energy used for mining should be considerably less than $2 to $3 million when rate is at $1000/BTC.
Difficulty grows with total hash rate, it doesn't care about power efficiency per hash. Once you have the hardware, it makes economic sense to keep mining as long as your costs per one Bitcoin mined are less then one Bitcoin. And if your cost is, for example 0.3 coins per coin, it makes sense to expand (in a sense of buying new hardware). And buying new hardware will increase difficulty up to the point, perhaps at 0.5, perhaps higher, where you stop expanding. Those two incentives create a situation where you will always have some miners that are close to zero profit, and not very many of those that are spending 0.1 BTC to mine 1 BTC. We can never know the true efficiency distribution of all miners, but if you take a straight line from zero to one, on a chart where you display efficiency of all miners, sorted by efficiency, you would get total surface of 0.5, and if you start from an assumption that the most efficient miner is at 0.5, you would get total of 0.75 under the curve. Thus my assumption for total miner efficiency of 0.5 to 0.75. In practice, it could be higher, but if it is lower, it would be a temporary situation. Unfortunately electricity is not the only cost of mining. There are many costs associated with it. Some of these are minor (pun not intended), for example: However, you are ignoring what is easily the second-greatest cost to mining: hardware depreciation. ASICs are useful for mining and only mining. With the current arms race, which is likely to continue, an ASIC unit becomes obsolete as soon as it can no longer mine efficiently enough to beat its own electrical (& storage and maintenance) costs. Over an ASIC's lifetime, its value shrinks until it reaches zero as soon as it starts losing money. If miners behaved as you stated, the lifetime of an ASIC will be very short. Even assuming a conservative estimate of ASIC speed growth, the cost per coin should double every few months. How much an ASIC unit makes could be modelled with the equation: Profit = 0.5 × (C−e) × d − $
(C = initial gross earnings per day
e = daily operation costs
d = number of days until ASIC worthless
$ = initial cost of the ASIC)
Miners, as a whole, will always get more ASICs as long as the profit is positive. Assume that we reach an equilibrium state, with buying a new ASIC equally likely to be profitable or unprofitable. Assuming the a conservative rate of growth (let's use 200 days because it's a nice round number), we can simplify this model thus: 0 = 0.5 × C × d − $
0 = 0.5 × C × 200 (log C − log e) − $
0 = 100C × (log C − log e) − $
$ = 100C × (log C − log e)
(log represents to the base of 2)
Your number, "efficiency", is given as e/C. As C and $ should in theory be related proportionally, we can introduce a new constant Q = $/C. Our equation is then thus: Q = 100 × [log (C/e)]
2^Q = (C/e)^100
(1/2^Q)^(1/100) = e/C
(1/2)^(Q/100) = e/C
(log represents to the base of 2)
This equation points out that the efficiency constant will decrease with an increase in one-time cost of the ASIC. An Avalon ASIC costs ~120 BTC at market price and earns approximately 4 BTC every day, so the experimental value for Q is 30 days (note that the formula has units of 2 x days on both sides; the right side has the value hidden after the substitution of d). Therefore: e/C = (1/2)^(Q/100)
= (1/2)^(30/100)
= (1/2)^(3/10)
≈ 0.8
Therefore, miners will actually use significantly less electricity than they generate in BTC—and that's with a zero margin. |
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Where did you get the statistics for countries?
From various sources. Since different sources list different countries, it's not exactly a controlled comparison. It's more of a visualization of how big Bitcoin has become. |
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I updated the OP with some more statistics.
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It is in fact highly unlikely that the price will both reach an all-time high and not retrace significantly. Bitcoin's history (albeit short) does not allow for this phenomenon:  So how long before Bitcoin passes $32 based on this chart? I highly doubt we'll see $32 in the near future. If you look closely at the chart, there isn't yet a case where the retrace takes one below the second-last high. I don't even think the retrace has started yet. |
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we could write a few nigerian letters meanwhile
Just pointing out that Niger and Nigeria are not the same thing. One from Niger is called Nigeri en. |
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Monetary base for Bitcoins is $10.9 million BTC.
That's the wrong currency symbol though. Should be: Monetary base for Bitcoins is ฿10.9 million BTC (Or Ƀ10.9 million BTC, if you prefer Ƀ symbol, which is not used for any other currency like how the ฿ symbol is used for at least one other currency). $ is more of a generic currency symbol for any currency, even those which are not pesos or dollars (see R$, etc.), so at least I don't have issue with $10.9 million XBT. |
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another simpler example would be if Bitcoin went from 1 to 1.2.
if i understand your formula, you would say Bitcoin went up 120%. that's clearly wrong as it only went up 20%.
Indeed, 20% is correct here. The issue with your method (6% loss + 1400% gain = 1406%) is that it assumes financial yields can be added. This is false. Consider a stock which appreciates 20%, and then appreciates 20% more. How much has the stock appreciated? Based on your calculations, it would be 40%. However, this is not entirely correct—one can see that the stock actually appreciated 44%. This may seem counterintuitive, but we will consider some other examples to make this more clear. Example 1: Imagine a stock A, priced at 1 BTC per share. A appreciates 20% on Monday, but then depreciates 20% on Tuesday. How much has A appreciated or depreciated? Based on a naïve addition, the answer might be: However, if we take this one step at a time: initial price = 1 XBT
Monday close = 1 XBT + 0.2 XBT = 1.2 XBT
Tuesday close = 1.2 XBT − 0.24 XBT = 0.96 XBT
∴ yield = −4% !!!
: Imagine a stock B, priced at 1 BTC per share. B depreciates 20% on Monday, but then appreciates 20% on Tuesday. How much has B appreciated or depreciated? Based on a naïve addition, the answer might be: However, if we take this one step at a time: initial price = 1 XBT
Monday close = 1 XBT − 0.2 XBT = 0.8 XBT
Tuesday close = 0.8 XBT + 0.16 XBT = 0.96 XBT
∴ yield = −4% !!!
From the above two examples, we can see that the method of calculating the yield is not additive. However, it seems to have a commutative property. We will now revisit the original goal of calculating Bitcoin's yield compared to gold. We must understand that by comparing two commodities with no direct exchange rate, we need to introduce an intermediate commodity—in an efficient market, what we pick doesn't matter. We will choose the US dollar here. Bitcoin, as you stated, has gone up by 1400% since the founding of this topic. Gold has gone down by 6%. These values correspond to yields of 1400% and −6%. Our goal is to calculate the difference between yields. However, we have just shown that this difference is not simply additive. So we will need to break up the problem again. To simplify this problem, we will define a Standard Bitcoin as the value of a bitcoin, in USD, at the time the thread started. Our symbol for this will be SXBT. Similarly, define SXAU as the standard value of a gram of gold. We then know the constancy, but need not calculate directly, the Standard Ratio: By the same process as the equations in our examples. initial price of XBT = r XAU
after +ve XBT yield = r XAU + 1400%×r XAU = 1.5r XAU
after −ve XAU yield = [1/(1−6%)]×1.5r XAU ≈ 1.596r XAU
∴ yield = 1496%
So your error was because the ratios could not simply be added. Instead, they have to be normalized and then multiplied. We will now come up with a general formula to express this. First, we will define a normalized yield as follows: It turns out that normalized yields are addable. This is because a Y n of +q is exactly cancelled out by a Y n of −q (proof left as an exercise for the reader). So the remaining difficulty is converting from a normalized yield back to a regular yield: Yn = ln(yield + 1)
e^Yn = yield + 1
yield = e^Yn − 1
Completing the formula: total yield = e^[ln(XBT yield + 1) − ln(XAU yield + 1)] − 1
= e^ln(XBT yield + 1)×e^[−ln(XAU yield + 1)] − 1
= (XBT yield + 1)/(XAU yield + 1) − 1
Substituting our values (1400% & −6%), we have: total yield = (1400% + 1)/(−6% + 1) − 1
= 15/0.94 − 1
≈ 15.96 − 1
= 1496%
If you need any more clarification, I'm glad to help. |
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Wait, are you using some weird characters there or has nobody actually registered the username "bitcoin" yet?
They're not "weird characters", they're standard punctuation marks. |
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the silverbox update (comparison from the beginning of this thread, March 13th, 2012, gold=1690, Bitcoin=5.4):
Bitcoin: +1400%
Gold: -6%
GPL: -36% silverbox long
Diff: +1406% advantage Bitcoin and Growing
This isn't the right way to calculate this. The proper way is to see how many ounces of gold x bitcoins can buy, where x is the number of bitcoins an ounce of gold could have bought. To make the numbers more manageable I will use a gram of gold: March 13, 2012: 1 GAU could buy 54.33 USD or 10.062 XBT. March 26, 2013: 10.062 XBT could buy 809.99 USD or 15.768 GAU. Therefore there was a profit of 1476.8%, far higher than your estimate of 1406%. |
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I have no idea how to implement this, but I thought it would be cool if the forum provided an API that allowed websites to add a "Sign in with BitcoinTalk account" feature. BitcoinTalk is the premiere Bitcoin community website, and it would be much more convenient for a Bitcoin-related website to simply bootstrap on a BitcoinTalk account.
Were you around when the password hashes for this forum were compromised? Not such a big deal then, but if the same login also controls other services... I was, but the forum is more secure now. |
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I'm going to lay this out pure and simple.
You made a huge financial miscalculation out of sheer ignorance. My opinion is that you would be wise to cut your losses and sell the thing immediately. If ASICs reach consumers at anywhere near the scale that a company like BFL intends to do within the next few months, you will likely never earn more than a maximum of $10,000-$30,000 (if you're lucky) before the difficulty gets so high that all of your useless extras start costing you more in electrical costs than what you'll earn generating BTC.
...
Wait a second...
You only have 12 GPUs? HOLY DEAR GOD SELL!!!
This rig is called a sunk cost. Believe it or not, selling the thing now is the financially optimal choice. |
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Bitcoins are infinately divisable under the protocol, and are presently divisable to eight decimal places. It's really just a reference point.
that's interesting! so the satoshi isn't the smallest possible piece? is it really infinately divisable? Yes, but clients cannot use more than 8 decimal places because of a technical limitation. Specificly, the value of any address is stored as a 64 bit integer. All bitcoin addresses store only satoshis, not BTCs, and the clients present the totaled values to the user with the decimal point added for human readability. The decimal point doesn't actually exist in the current address structure, but the protocol permits new kinds of addresses to be created for any number of reasons. The first ascii character of your bitcoin address denotes the address type, which is why all currently valid bitcoin addresses start with a "1". The addressses designed for testing features on testnet are identical except that first character is different. I believe that it's an "a" IIRC. An address that used a floating point variable for the value could store sub-satoshi values. Future address versions could also use different encryption algos than is currently used, or be different in a number of other ways. 8 decimal places seems to be a design flaw, as a 64-bit integer can store 11 decimal places at Bitcoin's current limits. Testnet addresses begin with 2. |
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Bitcoin's only method of money supply contraction is through destroyed coins, which are proportional to holdings. Holding coins effectively carries a risk and storage fee, so people will not have incentive to hoard.
sure, as long as the costs and risks outweight the deflation, hoarding makes no sense. but providing appropriate technical know how, these risks and costs are pretty low. so the only significant risk is inflation which is not going to be expected, as long as BTC doesn't fail. If these risks are low, then money supply contraction will be low. If 2% of bitcoins are lost every year, you will, on average, lose 2% of bitcoins every year. There is no reason to hoard. |
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