All the more reason to be part of the ASIC wave. If you don't keep up, you get left behind.
Sure, when proven developers release their second generation of machines that are much faster than those shipping now No, you missed out. No developer will ever make a machine that is cheap enough to make much off of it. If it is a good deal, everyone will buy and difficulty will rise to compensate. From now on, mining is going to be a arduous, low-return game. The easy money is gone. |
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Not as many as you would think it could do.
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Oddly enough, difficulty has very little to do with the value of BTC. I know it is counter-intuitive, but it is nonetheless true. In any given time frame the number of coins mined on average is stable. When it gets out of whack, the difficulty adjusts to get it "back in whack". The difficulty level functions as an automatic stabilizer on the supply. When a bunch of GPU miners blow a gasket because the difficulty rose and their profits evaporate, what you have to understand is that other people simply brought more hash power online and took the profit from the GPU miners. But the amount of coins mined remains stable. (There are minor variations when the hash rate gets way ahead of the difficulty, as just happened, and a larger than normal amount of coins are generated before the difficulty can catch up.)
The only thing an increase in difficulty means is that some people have increased the hash rate and are now taking an increased slice of the pie. The size of the pie however, remains basically the same. Only three things can increase the value of BTC: Increased levels of fiat being exchanged for BTC, increased levels of economic activity utilizing BTC, and decreasing the amount of BTC that is liquid and available for purchase/transactions that already exist (liquidity squeeze). If you see anything that indicates that these things are happening, it is a good indicator that BTC prices will rise.
Difficulty has no more than a temporary transitive effect on BTC price, and it can be safely ignored.
Nonsense. Difficulty doesn't adjust the number of bitcoin produced, but it has a massive effect on price. When you buy a product in the store, which is sold in a competitive market (for example, orange juice) production costs of that product are a very important determinant of the price of that product. If orange juice production costs increase, the price you pay increases also. How can you expect to buy bitcoins for $1 when miners are paying $80 worth of electricty to produce each one? It's not going to happen. That is 3600 bitcoin per day that are going to be priced above market rate because miners won't take a loss. With the current market, take 3600 bitcoin away that would normally be sold every day will certainly pressure value upwards. On the other hand, if people are paying $250 per bitcoin while miners are profucing them for net $20 each, miners will be overjoyed to sell every bitcoin they produce. That is basically 3600 bitcoin per day being dumped on the market at any price that will sell. How can this not drive down the value of bitcoin? Finally, look at historical difficulty vs value graphs. Regardless of the absolute reasoning, there is clearly a close connection that has existed since the earliest days of bitcoin. http://www.bitcoinx.com/charts1/chart_large_lin.png <- clearly obvious that if price gets out of whack with difficulty, there is a big correction downwards. You are completely wrong. Difficulty does not drive price. Price drives difficulty. If it is not longer profitable to mine, miners will stop mining and difficulty will decrease. If bitcoin goes up, more people will begin mining to take advantage of it. Difficulty would then go up. If it cost $80 of electricity to make a $1 bitcoin, well then, no one would mine and the difficulty would plummet. The miners aren't able to demand any specific price. The market dictates that. And yes, they will take a loss if the need the money. But very quickly they will simply stop mining if they are going to keep on taking a loss. Miners don't necessarily sell their bitcoins. They may to chose to hold. Whether they do depends on the bitcoin price and what they feel like the price will do. It is independent of difficulty though. |
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I don't see the point of using candlesticks with bitcoin since the market never closes.
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MtGox is still the cheapest way.
Coinbase is good, but more expensive and limits you to selling just 50 coins a day.
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bump. any interest?
waaaay too expensive. Will the increase in difficulty, I'd only pay maybe 125 btc for a avalon miner right now. 100 shares is worth almost 250 presently and shows all signs of continuing to go up. Don't forgot the 0.038 dividend for this week! |
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Ok, Difficulty went up. before it did, many people were concerned about their declining incomes. Now that i think about it, it isn't really an issue because it goes up equally for everyone. What is a concern is the amount of new equipment coming on line. The USB ASICs aren't any faster than GPU's and are currently priced higher. The only real benefit of the ASICs at present is the low cost of power for them relative to GPUs.
We all are fighting over our slice of the same pie. We add new equipment in hopes of increasing our share, at the expense of all the other miners. The only way you will see a drastic drop in income will be if new equipment comes online at fast rate. If other miners expand their mining operation faster than you, as ASICminer did, then you lose. ASICminer is about 12% of the pie at the moment. so everyone else saw a 12% decline in income. add the 8% unknown and we are down 20%. The thing is, we take the loss as it occurs so it isn't all that noticable unless you look at long term changes.
Now, when ASIC based machines that cost significantly less for the same Hashing power as GPUs, that is when using GPUs will not be cost effective. ie. If Butterfly ever gets around to delivering all the hardware people paid for, that will be a game changer.
So, in a nutshell, all things being equal, difficulty changes aren't really an issue in and of themselves.
First of all, ASICMiner is roughly 25% of the pie presently. The ASICs that people have been buying from Avalon and BFL are far cheaper than the equivalent GPUs. GPU mining is already dead. Some people will try and hold on for the next month or two but it is over. The only people who will continue after that are people who: already have the hardware, get free electricity, and need the heat they generate to heat their homes. I'm not sure what you are trying to say, mining difficult is EVERYTHING (well that and price). It can make or break a miner. I don't really understand how you can say "it isn't really an issue". |
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Nope, they will all die within the next year. Namecoin is interesting, but it isn't a currency really.
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I don't where conspiracy theory starts in what I am about to say. AFAIK it seems to work a bit like this. I'd like to know a more accurate view of how it works. The USA tends to lead the world in everything. It's still very dominant. AFAIK laws tend to be formed in the US usually under pressure from a cartel and very powerful interests and companies. This then gets exported off to the UK, pushed into the UK and then to the commonwealth and former commonwealth (like Australia), somewhere along the lines countries which have less obvious ties, less historical ties then may follow suit; countries like Chile. Meanwhile you still have countries which don't follow suit. Argentina, Iran, China and so on. These countries could carry on using Bitcoin... but would they and would they be enough? - would they be enough to support and at what price? Looking at where the trade is Bitcoin is still very much in the influence of the USA. https://en.bitcoin.it/wiki/Bitcoin_Maphttp://www.thegenesisblock.com/mapping-bitcoin-adoption-a-global-perspective/The significant ones look like China & Russia. If it wasn't for this I would be more bearish. Seems amazing there's not more Bitcoin in South America. Has anyone got a better view of how politics tend to fan out around the globe? I'm no expert, just the impression I get from the news and propaganda. I guess countries not aligned with the USA could attack Bitcoin independently of course but my point is that the USA is a big question for Bitcoin - we are expecting the USA to attack it and when that happens we can expect many but not all countries to follow suit. This. If the US attacks Bitcoin it will be a historic buying opportunity for people in Non-US-aligned countries. It will also be an opportunity of geopolitical magnitude for developing countries to break the US hegemony. Just imagine if China and Russia were backing a currency outlawed in the US. By shutting down US-based services, the services would just move to other countries and the US government would lose what little influence they have over Bitcoin atm. One could easily and anonymously connect to a Chinese-hosted e-wallet through a VPN on a mobile and use it to transfer funds without government being able to step in. It would be the perfect currency for anti-government people in the US to use as a means of exchange and also a new way for the Chinese to make money from subverting the US government. If the US tries to criticise China for this, China could simply claim it's a matter of freedom of speech as Bitcoin is simply code...the US would look fascist whereas China would look increasingly liberal. As for Europe, one thing is influencing the individual national governments of NATO member states, but another is to convince the European parliament of a blanket ban of Bitcoin. My prediction is that most of Europe would stall any decisions. That would be a perfect opportunity for China to meddle in European politics. Already they are investing in Greece, and as we know Greek politicians can easily be bought. If Europe would go against the US and not ban Bitcoin, that would create a deep chasm between Europe and the US, further decimating US power. My whole point is that if the US moves to ban Bitcoin, then Bitcoin will become the kind of crowbar that Non-US-aligned countries have long had wet dreams about using to apply soft power to break the US hegemony (which is based on hard power). I'm not saying that this will influence US policymakers, as it seems like the US has shot itself in the foot many times before. But it does make it likely that US would think twice before they would try to shut down Bitcoin. I think you are vastly overestimating the political importance of bitcoin. Presently it has the market cap of a medium sized company. A single company. It is like a single stock on the NYSE. The US isn't going to give a damn if they ban bitcoins and Europe doesn't. Yes, I have only been talking about the US govt, because I think stopping the flow of dollars to bitcoin is enough to crash bitcoins price. Yes, bitcoins will survive if they can only be traded in Europe, South America, and Asia but they will suffer without the US dollar. People are going to still want US dollars. Whether or not you can trade them for bitcoins is not going to effect the US economy one bit. Maybe if bitcoin had taken over as one of the world's major currencies, the story would be different. But right now bitcoin is small potatoes. |
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there is no tax or regulations yet! think "embryonic currency"
some people are saying they have made a profit from selling coin and so they paid the appropriate tax as income
what they obviously don't realize is that there is no regulatory/legal requirement to do so as yet
Yes there is - it's pretty clear cut that if you make a profit in fiat then you become liable for tax, all disagreement with tax law to the contrary. +1. If you deal in Bitcoins entirely for purchases of goods or services then you never touch fiat and hence aren't liable for taxes. Especially if the transaction is P2P or in person. No paper trail. Yes you are still liable for taxes. It is less likely that you would be caught, but you'd still owe the taxes. Otherwise everyone would just buy gold to cash out their bitcoins and then sell the gold. |
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What is taking Avalon so long? Have they said anything at all?
How many units from batch 2 have been shipped from batch 2? Like 30 out of 600, right? In a month? I know they were setting up a new SMT system but that should be all working now, right?
Do people have any idea when they are going to starting shipping more machines again?
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Bitcoin currently costs around $300k per day or $9m per month to stay healthy
This will be very difficult to sustain long term, unless fiat currencies crash. It doesn't have to do that forever. Remember that the block reward halves every 4 years and so does the money needed to maintain a stable value. |
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Here is a little thought experiment for you:
Let's say the government shut down all the methods to get fiat in and out of the bitcoin exchanges but the exchanges themselves weren't touched.
Let's say that there was only one method you could move cash in and out but you were limited to $10 a day. It was still free, instant, and unlimited to move bitcoins in and out of the exchange.
What do you think would happen to the price?
Even if bitcoins were very desirable, eventually the price would plateau because there wouldn't be enough fiat in the system to boost the price up. When the last dollar that could be sent to the exchange that day was spent, there would be no one to buy your bitcoin that you had for sale and the market would stagnate and price would crash.
Also remember that there are 3,600 bitcoins mined each day. There needs to be enough fiat added to the system to balance out these bitcoins. Otherwise there will be an excess of bitcoins and a shortage of fiat causing bitcoins to crash relative to fiat.
In other words, it is essential that we be able to move fiat into the exchanges to keep the bitcoin market working and keep the prices stable and high. If the US govt were to attack bitcoin, they'd focus on the how the banks send and receive money from the exchanges and they'd block that. And we'd be in the hypothetical situation I described above.
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This is very very bad for bitcoin because it means bitcoin is next.
Well not bitcoin directly but any bank or service that deals with bitcoin could be shut down at any moment.
How much do you thnk bitcoin would be worth if you can't EDIT: [legally] exchange fiat for it?
A lot more. Artificially repressed supply means price will go up, and I fail to see how repressed supply AUTOMATICALLY leads to lower demand. People didn't stop buying drugs because the government made it harder to buy them; people didn't stop downloading torrents because a few torrent download sites were shut down. And bitcoin is a heck of a lot more intrinsically useful than drugs; I'm sure even the silk road cocaine addicts among us would agree. Just because supply is repressed doesn't mean people will automatically go "oh darn, they're harder to get; all of a sudden I don't want them anymore." If no one can put money in to buy bitcoin then the price won't be going up anytime soon.
PLEASE FOLKS, follow your logic through. If the goobermint shut off legacy banking access to bitcoin (closed down exchanges, bank wires, funding options, etc) this means that people can't easily get fiat into exchanges - but it also means people can't easily get fiat out of exchanges. There wouldn't be a significant imbalance, and certainly not on the sell side since the last thing large holders want to do is pay 20% of their fiat profits in capital gains tax. Not only will you have to resort to localbitcoins or IRC-OTC/escrow to buy bitcoins, you would have to do the same to sell them. Not a significant imbalance. Plus, bitcoin has anti-fragile properties. This means that the more it is attacked by goobermints, the more appealing it becomes to those trying to escape tyranny. Some people think that Bitcoin will only succeed long-term if Grandma can go to the gas station and buy cigarettes and petrol with bitcoins on her iPhone. I say phooey! I feel like we've had this discussion before. Yes, you won't be able to get fiat in or out of exchanges. That means volume would fall drastically. People would no longer be able to spend their bitcoins on anything and so they would look to change it into fiat as quickly as possibly (perhaps they'd use localbitcoins). But few people would be buying bitcoins because they know they are going to be hard to sell. Bitcoins would cease to be useful as a currency. And it would cease to be useful as a store of value. Therefore, the price would crash. Yes, it would continue to be appealing to those trying to escape tyranny but that is not what has been driving the price the past 6+ months. If the govt attacked bitcoin, we'd lose the general public, we'd lose the startups, we'd lose the institutional investors. BItcoin would go back to the sub-10$ range. Recall that bitcoin has gone up with governments attack fiat (like in cyprus). If governments attack bitcoin, fiat (and gold) are likely to go up in response. |
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In Soviet Russia, ASIC hashes you!
Sorry, I couldn't help myself.
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Well it's been over 48 hours, several people have tried starting group buys but as far as I can see not a SINGLE person has commited to SINGLE chip. A few who did show interest would only do so if payment was on delivery and nothing up front. Sanity prevails on bitcointalk  This was always going to be a longshot for them. They are experts at marketing their products to unsophisticated buyers (not pumping up my own tyres, they got me as well). Anyone contemplating buying chips themselves is likely an order of magnitude better informed and would see that the risk of buying BFL chips doesn't justify the premium. Only by shipping all product lines in volume will BFL demostrate that their chip issues are behind them. It's catch-22. If the chips worked properly they would have had developers begging them to release them. Because the chips don't work very well they need to sell more to get a better volume price. But no one experienced will want to buy chips to help them do that. And the BFL chip performance is only marginally better hash/$ than Avalon's. Why would anyone take that risk? Price/PerformanceBFL: 2600 MH/s for $89 is 29.2 MH/s per $1 Avalon: 280 MH/s for $10 is 28 MH/s per $1 Power efficiencyAvalon: 66,000 MH/s @ 600W 110 MH/w BFL: 5200 MH/s @ 35W 148MH/w (the ars technica box measured 5.2 @ 50W) Yeah, I'm really surprised they didn't offer a significantly better price than Avalon. They are shipping later and they are an unproven technology. I don't see any reason to chose them over Avalon for discrete chips right now. I think they are going to get very few pre-orders and drop the price significantly in the next few weeks. Or maybe they actually need the money that desperately and will simply go out of business. It doesn't help that they just angered every so single one of their 60,000 preorder customers which would have been their best market for selling discrete chips. |
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This is very very bad for bitcoin because it means bitcoin is next.
Well not bitcoin directly but any bank or service that deals with bitcoin could be shut down at any moment.
How much do you thnk bitcoin would be worth if you can't exchange fiat for it?
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It's a bargain at 150 coins but not at 230.
I doubt any of those bids are actually real. You'll never see the coins. That has been the complaint of most people who have been trying to sell Avalons and Avalon pre-orders on ebay, bitmit and here. There are a lot of people who make bids they later decide not to honor which drives the price way up. All of the reasonable people who actually have the coin to spend don't bid that high because they know they will lose money. But all of the sellers only ever see the high bids so that's what they believe their unit is worth.
With the next difficulty looking like it will be well over 15,000,000 before this unit arrives at the winners house, I don't see how it can ever make back its cost.
But if you actually get 230+ for it, good for you.
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They make hardware for themselves, to try to stay around 30-35 percent of the total network hashing power and then they also sell the blades and USB miners on the side. They then distribute the earnings from those sales along with mining profits to the shareholders. The more hardware they sell, the more the shares will be worth. It's a win-win because when they start controlling too much hashing power they can just start pumping out hardware for resale.
Did not know that. That is a good plan. I'm not sure they worry about having too much hashing power. If I had 60% of the network and did not intend to use it to double spend, I would keep the 60% until all blocks are mined. I think their reason to sell hardware was to reduce the risk of owning too much of it. Cash is king. I think over time they will make more from h/w sales than from mining on that hardware. Just because they don't plan on double-spending, doesn't mean other people won't worry about them double-spending if they could double-spend. Selling their hardware is the right thing to do because it keeps mining stable and thus keep the bitcoin price from crashing. I think their price will have to drop as we approach the next block halving in 3 1/2 years as mining will become less profitable then in terms of bitcoin. |
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