Coindesk article: http://www.coindesk.com/bitcoin-economy-black-market-sin-report/

Actual research article: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2808762

Interesting:

http://bit.ly/1NRPNj6

This is a serious question. Obviously the newest round of ASICs is coming on line at 0.25 J/GH or better in the past few months, and we have seen difficulty increase as a result.

At today's price of $460, and an implied forward difficulty of ~95,000,000,000 anybody with over 0.75 J/GH will be mining at a loss and presumably taking those rigs offline (assuming prices stay here or decline).

For the sake of argument, assume everybody over that threshold removes themselves from the network. Does the remaining hashpower still sustain a 95B difficulty? In other words, is the amount of new ASICs coming online over the past few months and in the next few months enough to replace what will be removed?

(I have no idea, but I actually think there is more hashpower coming on than will be removed).

I have notice lately colored coin transactions (w/OP_RETURN output) are not being confirmed even with a standard tx fee.. Any ideas?

*Please note the axes are mislabeled. The left y-axis is 1/log difficulty and the right y-axis is log J/GH


People have been pondering whether cost of production matters in bitcoin value formation. And it certainly does: http://papers.ssrn.com/abstract=2580904
But the rebuttal is well this may be the case now but it wasn't before. This post will try to give a reason why. And this is aside from the fact that there was rampant price manipulation and fraudulent trading in 2013 bringing the price well above $1,000 for no fundamental reason.
Economics would predict that marginal cost and marginal product, like supply and demand, will eventually converge to an equilibrium, and we see that during much of 2014 as ASIC tech kept pace with network growth in the graph above. But I am getting ahead of myself.

Whenever the orange line (energy efficiency) is above the blue line (difficulty), changes in difficulty are exceeding changes in efficiency and vice versa. So right now, difficulty is outpacing tech. progress. When ASIC first introduced, technology outpaced network growth (difficulty is a direct measure of network size)

So put one last way - the purple shaded area exists when the network growth is outpacing technological change. The data on GPU mining is admittedly not complete having just one representative data point, but I think that it nonetheless tells the same story.
Green areas exist when technological change is outpacing network growth. When they line up, the "supply and demand" is in equilibrium..

This also tells a nice economic story: In the beginning, people mined with CPUs and all was well. GPU mining came along and only served to crowd out CPU miners by growing the network exponentially. But since GPU cards are not developed with the express purpose of mining - they are made mainly for computer graphics - they were not induced to improve. GPUs just happened to be better than CPUs. It's like mining for gold with a shoe because it happens to be better than a sock. Also, since CPUs and GPUs run inside a PC which is normally left powered on anyhow, the electricity usage extracted for mining was less obvious than it is now. CPUs and GPUs also consume electricity to do other fun things like run spreadsheets and render video game worlds.  
GPU mining also started to crowd out lesser GPUs. We see this as the difficulty chart starts to level out a bit in 2012.

This all changed with ASICs - specifically designed to mine. The shoe was replaced by a shovel. The shovel then turned into a steam shovel and then a modern-day mining operation. It is only with ASICs that the economics begin to line up because the induced technological change is making for better shovels and not finding something better than shoe which also not a shovel. It is easy to find a new low-cost producer of shovels by improving upon the last. Economic theory works when diggers use shovels and falls apart when they dig with shoes and socks. This is why shovels needed to be brought to bear for economic theory to show up in practice. Of course, this implies that Bitcoins are commodities produced in a competitive market, but that's fine by me!
Right now we are reaching a point where network growth is outpacing technological change, and the logical step will be for new 22 or 18nm technology to come online. Hashcoins Uranus is a machine that claims 0.26 J/GH efficiency but it might just be vaporware for now...

 I couldn't find a better visual resource so I made my own..

Anybody care to help fill in the blanks? I tried finding on forum threads the official launch dates or available for sale dates.

I tried to include only the most energy efficient for any time frame, so if a new device came out later but was less energy efficient, it was omitted..

For GPU & CPU I just used one standard average, there were probably too many different configurations of chips & GPU cards all running at once in that time period..

*Please note the y-axis is a base10 log scale.

Just curious, how many wallets out there belong to miners vs. non-miners?
Is there even a way to find out?

Suddenly every PC and wireless connect to my Verizon FiOS router is unable to resolve DNS (even when changing DNS to Google 8.8.8. for some popular bitcoin-related websites including some mining pools (btcguild, suprnova.cc, ecoining.com, mining.wtf, multipool.us, suchpool.pw, bitmember.com, coin-pool.org, hashtot.com etc.)
I also cannot resolve Cryptsy and other exchanges as well as coinwarz and other mining-related websites

ALSO, my cgminer cannot resolve the stratum servers with those IPs.

When I take my phone or tablet off of my wifi and use LTE, I can resolve all sites just fine.

I tried soft reboot of my FiOS router and no change.

Anybody ever hear of such a thing? Is this a malware infection of my router? If so how do I clean it?

Yikes!

Already with OP_RETURN functionality people can coopt the bitcoin blockchain to digitally sign, notarize or provide proof of existence. Is this the real value of blockchain based cryptocurrency systems? Will the value in these metadata 'services' exceed the proof-of-work value of BTC in and of itself?
These are just open ended questions that I think are going to be very much at the forefront of the evolution of the bitcoin ecosystem in 2015-2016.

And if the blockchain becomes more valuable, do Bitcoins also become so? Of course someone could fork it to specifically focus on these auxillary functions, however why bother when there is ~400 petahashes of labor just waiting to verify your documents?

I have no coding or scripting skills, and I am in search of some data series in order to evaluate theoretical research on altcoin mining.

I know sites such as coinwarz offer graphs of network hashrate, difficulty and exchange rate for various altcoins.
However, I need this in CSV or other form of text data series - can anybody help me with obtaining such data series?

Any help would be much appreciated and the results will surely be useful to the altcoin community once the data has been analyzed.

Many of the miners already know most of this stuff, but it's still a worthwhile read.
Not only does this develop a model for the intrinsic value of bitcoins based on cost of production, but also cautions that with increasing efficiency lowering the cost of production (i.e. lower watts per GH/s), the value of bitcoin may also decline. The block reward halving in late 2016 may have the effect of eliminating all but the most efficient miners.

https://www.researchgate.net/publication/272022750_The_Decision_to_Mine_for_Bitcoins_A_%28Computational%29_Labor_Theory_of_Intrinsic_Value

Many of you miners already know most of this stuff, but it's still a worthwhile read.

https://www.researchgate.net/publication/272022750_The_Decision_to_Mine_for_Bitcoins_A_%28Computational%29_Labor_Theory_of_Intrinsic_Value

[Introducing the Altcoin200 Index]

Introducing the Altcoin200 Index

There are a small number of altcoin price indices out there, however many of them are small (10-25 components) and may have complex methodologies that could cause the index to rebalance frequently. This index seeks to simplify the tracking of alt-coin aggregate prices and increase the breadth now that there are many hundreds of alt-coins. This index is fully investable using various cryptocurrency markets and price data is easily available making this a suitable benchmark for altcoin investors or traders.

Index visibility
The index price will be updated daily (or as frequently as possible if longer than daily) via Twitter. @Altcoin200 will tweet the values. For questions or comments & feedback you can email Altcoin200[at]gmail.com

A website complete with graphs, price history and analytics will follow if this gains enough support and traction.

Methodology
The index is comprised of the 200 largest alt-coins by market capitalization, denominated in BTC prices. To keep the index a monitor of truly 'alternate' coins, BTC, LTC, XRP and BitShares are excluded. Crypto-'assets' such as Gems and NuShares are also excluded. The index composition is listed below.
The index price is calculated as the weighted price (denominated in BTC), multiplied by 1,000,000. The index price now at inception is: BTC2212.025

Rebalancing will occur if component weights exceed +/- 15% of initial weightings and initial weightings will be reset if rebalancing occurs. If a weighting exceeds the band threshold to the downside making it no longer a constituent of the index, a new altcoin will be added to replace it.
If a new altcoin comes in to existence with a sufficient market capitalization to warrant inclusion in the index, it will be added after 100 days of being listed on a tradable exchange.

*Please note that for now, it has been decided to use market capitalization and not a float-adjusted measure. The reason being is that any pre-mined coins may be offered for sale and exchanged at any time.

If this in any way is helpful, useful or of interest to you, please consider donating: 1DaU6hDhxzveN7EoVDdywyfG7JX1D6j5Pz

Symbol|%age Weight
DOGE   11.5716%
STR   10.8112%
XPY   10.8054%
NXT   9.1449%
DRK   7.5142%
PPC   5.9176%
NMC   4.2986%
BANX   3.6222%
NSR   3.4039%
XCP   2.5684%
YBC   2.5204%
NBT   1.8244%
BCN   1.6199%
XMR   1.4137%
MSC   1.3151%
BLK   1.1590%
 D   0.8919%
NOTE   0.7397%
CLAM   0.6939%
XTC   0.6570%
QRK   0.6525%
MONA0.6505%
RBT   0.6248%
FC2   0.5793%
RDD   0.5106%
UNO   0.4849%
XDN   0.3998%
IXC   0.3921%
NVC   0.3679%
NAV   0.3262%
DGB   0.3223%
SDC   0.2997%
I0C   0.2837%
MEC   0.2727%
WDC   0.2686%
EMC   0.2682%
NLG   0.2645%
BURST0.2556%
ARCH   0.2541%
GSX   0.2505%
IFC   0.2500%
XPM   0.2485%
BLOCK0.2431%
PTS   0.2424%
FAIR   0.2394%
VIA   0.2329%
PND   0.2258%
FTC   0.2237%
URO   0.2133%
HYPER0.2036%
POT   0.2014%
CURE   0.1995%
VRC   0.1975%
NODE   0.1956%
VTC   0.1805%
ANC   0.1796%
MAX   0.1634%
MZC   0.1552%
APC   0.1475%
XC   0.1449%
ZET   0.1436%
CANN   0.1432%
RBR   0.1377%
XST   0.1205%
NTR   0.1177%
XCR   0.1125%
SLR   0.1123%
UTC   0.1095%
DGC   0.1090%
SYS   0.1084%
BOST   0.1039%
UNB   0.1002%
BAY   0.0993%
SPR   0.0991%
QORA   0.0931%
DEM   0.0930%
NAUT   0.0887%
MOON0.0859%
OPAL   0.0848%
ZEIT   0.0846%
OCUPY0.0829%
DMD   0.0818%
CZC   0.0814%
SWIFT0.0795%
ZCC   0.0758%
MMXIV0.0740%
START0.0726%
VPN   0.0693%
CESC   0.0672%
DVC   0.0643%
AM   0.0635%
NET   0.0624%
XWT   0.0622%
BLU   0.0574%
JPC   0.0531%
HBN   0.0503%
FRC   0.0497%
BBR   0.0494%
FLT   0.0490%
 S   0.0488%
MYR   0.0488%
MINT   0.0482%
KARM   0.0479%
HYP   0.0464%
IOC   0.0445%
USDe   0.0445%
RIC   0.0436%
PINK   0.0434%
XAI   0.0432%
GMC   0.0421%
UNC   0.0419%
NOO   0.0415%
EFL   0.0408%
HTML50.0408%
BTM   0.0397%
FIMK   0.0397%
CGB   0.0393%
HZ   0.0373%
CRYPT0.0373%
EAC   0.0369%
ARI   0.0361%
RIN   0.0350%
EMC2   0.0345%
MARYJ0.0341%
CLOAK0.0330%
VIOR   0.0319%
BYC   0.0313%
TIPS   0.0309%
FIBRE   0.0309%
XWC   0.0304%
ABY   0.0289%
TAG   0.0279%
C2   0.0278%
AUR   0.0276%
PTC   0.0266%
FLAP   0.0263%
LXC   0.0255%
DOGED0.0242%
SRC   0.0235%
CAP   0.0229%
NOBL   0.0227%
COL   0.0227%
BITS   0.0210%
SLG   0.0210%
ORB   0.0203%
XMG   0.0197%
TES   0.0196%
RBY   0.0194%
CSC   0.0194%
BQC   0.0188%
GAIA   0.0188%
VTA   0.0186%
EXCL   0.0184%
SUPER0.0179%
FST   0.0173%
TRC   0.0173%
SXC   0.0170%
DIME   0.0166%
XBS   0.0155%
MNE   0.0155%
LTCD   0.0145%
LKY   0.0142%
TRUST0.0138%
NKA   0.0136%
QSLV   0.0136%
QTL   0.0134%
QBK   0.0132%
CLR   0.0129%
BOOM0.0127%
NEOS   0.0125%
ECC   0.0125%
NYAN   0.0123%
NKT   0.0121%
XPD   0.0114%
CINNI   0.0114%
GLC   0.0112%
SFR   0.0112%
FRK   0.0110%
XCN   0.0106%
XDQ   0.0106%
OMC   0.0106%
YAC   0.0104%
SSD   0.0104%
UFO   0.0102%
TEK   0.0102%
WKC   0.0099%
CKC   0.0095%
BLC   0.0093%
LOT   0.0093%
FRSH   0.0093%
RZR   0.0091%
SMBR   0.0091%
GRS   0.0089%
SPA   0.0089%
TIT   0.0089%
MWC   0.0088%
XDE   0.0086%
BSTY   0.0084%
NYC   0.0082%
DRKC   0.0076%

[Introducing the Altcoin200 Index]

Introducing the Altcoin200 Index

There are a small number of altcoin price indices out there, however many of them are small (10-25 components) and may have complex methodologies that could cause the index to rebalance frequently. This index seeks to simplify the tracking of alt-coin aggregate prices and increase the breadth now that there are many hundreds of alt-coins. This index is fully investable using various cryptocurrency markets and price data is easily available making this a suitable benchmark for altcoin investors or traders.

Index visibility
The index price will be updated daily (or as frequently as possible if longer than daily) via Twitter. @Altcoin200 will tweet the values. For questions or comments & feedback you can email Altcoin200[at]gmail.com

A website complete with graphs, price history and analytics will follow if this gains enough support and traction.

Methodology
The index is comprised of the 200 largest alt-coins by market capitalization, denominated in BTC prices. To keep the index a monitor of truly 'alternate' coins, BTC, LTC, XRP and BitShares are excluded. Crypto-'assets' such as Gems are also excluded. The index composition is listed below.
The index price is calculated as the weighted price (denominated in BTC), multiplied by 1,000.

Rebalancing will occur if component weights exceed +/- 15% of initial weightings and initial weightings will be reset if rebalancing occurs. If a weighting exceeds the band threshold to the downside making it no longer a constituent of the index, a new altcoin will be added to replace it. Weightings will also be rebalanced every 1st of the month even if bands have not been exceeded.
If a new altcoin comes in to existence with a sufficient market capitalization to warrant inclusion in the index, it will be added after 100 days of being listed on a tradable exchange.

*Please note that for now, it has been decided to use market capitalization and not a float-adjusted measure. The reason being is that any pre-mined coins may be offered for sale and exchanged at any time.

If this in any way is helpful, useful or of interest to you, please consider donating: 1DaU6hDhxzveN7EoVDdywyfG7JX1D6j5Pz

Symbol|%age Weight
DOGE   11.5716%
STR   10.8112%
XPY   10.8054%
NXT   9.1449%
DRK   7.5142%
PPC   5.9176%
NMC   4.2986%
BANX   3.6222%
NSR   3.4039%
XCP   2.5684%
YBC   2.5204%
NBT   1.8244%
BCN   1.6199%
XMR   1.4137%
MSC   1.3151%
BLK   1.1590%
 D   0.8919%
NOTE   0.7397%
CLAM   0.6939%
XTC   0.6570%
QRK   0.6525%
MONA0.6505%
RBT   0.6248%
FC2   0.5793%
RDD   0.5106%
UNO   0.4849%
XDN   0.3998%
IXC   0.3921%
NVC   0.3679%
NAV   0.3262%
DGB   0.3223%
SDC   0.2997%
I0C   0.2837%
MEC   0.2727%
WDC   0.2686%
EMC   0.2682%
NLG   0.2645%
BURST0.2556%
ARCH   0.2541%
GSX   0.2505%
IFC   0.2500%
XPM   0.2485%
BLOCK0.2431%
PTS   0.2424%
FAIR   0.2394%
VIA   0.2329%
PND   0.2258%
FTC   0.2237%
URO   0.2133%
HYPER0.2036%
POT   0.2014%
CURE   0.1995%
VRC   0.1975%
NODE   0.1956%
VTC   0.1805%
ANC   0.1796%
MAX   0.1634%
MZC   0.1552%
APC   0.1475%
XC   0.1449%
ZET   0.1436%
CANN   0.1432%
RBR   0.1377%
XST   0.1205%
NTR   0.1177%
XCR   0.1125%
SLR   0.1123%
UTC   0.1095%
DGC   0.1090%
SYS   0.1084%
BOST   0.1039%
UNB   0.1002%
BAY   0.0993%
SPR   0.0991%
QORA   0.0931%
DEM   0.0930%
NAUT   0.0887%
MOON0.0859%
OPAL   0.0848%
ZEIT   0.0846%
OCUPY0.0829%
DMD   0.0818%
CZC   0.0814%
SWIFT0.0795%
ZCC   0.0758%
MMXIV0.0740%
START0.0726%
VPN   0.0693%
CESC   0.0672%
DVC   0.0643%
AM   0.0635%
NET   0.0624%
XWT   0.0622%
BLU   0.0574%
JPC   0.0531%
HBN   0.0503%
FRC   0.0497%
BBR   0.0494%
FLT   0.0490%
 S   0.0488%
MYR   0.0488%
MINT   0.0482%
KARM   0.0479%
HYP   0.0464%
IOC   0.0445%
USDe   0.0445%
RIC   0.0436%
PINK   0.0434%
XAI   0.0432%
GMC   0.0421%
UNC   0.0419%
NOO   0.0415%
EFL   0.0408%
HTML50.0408%
BTM   0.0397%
FIMK   0.0397%
CGB   0.0393%
HZ   0.0373%
CRYPT0.0373%
EAC   0.0369%
ARI   0.0361%
RIN   0.0350%
EMC2   0.0345%
MARYJ0.0341%
CLOAK0.0330%
VIOR   0.0319%
BYC   0.0313%
TIPS   0.0309%
FIBRE   0.0309%
XWC   0.0304%
ABY   0.0289%
TAG   0.0279%
C2   0.0278%
AUR   0.0276%
PTC   0.0266%
FLAP   0.0263%
LXC   0.0255%
DOGED0.0242%
SRC   0.0235%
CAP   0.0229%
NOBL   0.0227%
COL   0.0227%
BITS   0.0210%
SLG   0.0210%
ORB   0.0203%
XMG   0.0197%
TES   0.0196%
RBY   0.0194%
CSC   0.0194%
BQC   0.0188%
GAIA   0.0188%
VTA   0.0186%
EXCL   0.0184%
SUPER0.0179%
FST   0.0173%
TRC   0.0173%
SXC   0.0170%
DIME   0.0166%
XBS   0.0155%
MNE   0.0155%
LTCD   0.0145%
LKY   0.0142%
TRUST0.0138%
NKA   0.0136%
QSLV   0.0136%
QTL   0.0134%
QBK   0.0132%
CLR   0.0129%
BOOM0.0127%
NEOS   0.0125%
ECC   0.0125%
NYAN   0.0123%
NKT   0.0121%
XPD   0.0114%
CINNI   0.0114%
GLC   0.0112%
SFR   0.0112%
FRK   0.0110%
XCN   0.0106%
XDQ   0.0106%
OMC   0.0106%
YAC   0.0104%
SSD   0.0104%
UFO   0.0102%
TEK   0.0102%
WKC   0.0099%
CKC   0.0095%
BLC   0.0093%
LOT   0.0093%
FRSH   0.0093%
RZR   0.0091%
SMBR   0.0091%
GRS   0.0089%
SPA   0.0089%
TIT   0.0089%
MWC   0.0088%
XDE   0.0086%
BSTY   0.0084%
NYC   0.0082%
DRKC   0.0076%

UNB is up over 5,000% in the past couple days.. any ideas on why?
I have noticed that the mining difficulty seems to be stuck at a low 13.3M.. one would suspect that with the price rising so too would the difficulty---

You may be interested in this working paper: Research paper on cryptocurrency mining arbitrage

https://www.researchgate.net/publication/269698897_Evidence_for_Bitcoin__Altcoin_Price_Efficiency_Miners%27_Arbitrage_in_Cryptocurrency_Markets?ev=prf_pub

You may be interested in this working paper: Research paper on cryptocurrency mining arbitrage

https://www.researchgate.net/publication/269698897_Evidence_for_Bitcoin__Altcoin_Price_Efficiency_Miners%27_Arbitrage_in_Cryptocurrency_Markets?ev=prf_pub

https://www.researchgate.net/profile/Adam_Hayes2/publication/269708450_What_Factors_Give_Cryptocurrencies_Their_Value_An_Empirical_Analysis/links/54945fd20cf29b94481e8bb3.pdf?origin=publication_detail

My whole problem with proof-of-stake is that it's supposed to be analogous to putting money in say a 3- or 6-month CD where it sits tied up and earns interest.
The reason a CD earns interest is that while it sits tied up, the bank issues loans and extends credit to businesses (very few 3- or 6- month personal loans). These businesses take the loans in order to continue day to day operations and repay it with a portion of future sales proceeds. The reason the businesses need the loans is that it's cheaper for them to borrow than to sit on excess cash that could put to work doing productive things.
Meanwhile, the bank promises you x% on your CD while it charges x + y% to the business, and makes the incremental profit of y%.

With a POS wallet, where does the interest come from? If it's just coming from the POS hashing creating a flow of coins by generating new money supply, well this is doomed to fail. Imagine if instead of the mechanics of the CD above, you put the money into the CD and get promised x%, and instead of loaning that money out to earn a spread on the interest received they ask the Fed to print x% more dollars for you. Nothing has changed. There has been no value added. The result is just more money, which will ultimately reduce the *real* value of that money in terms of buying power:

Say $100 buys all the groceries you need for the month.
You put $100 in a 3-month CD that pays a 3-month rate of 2%. And assume the second scenario where money is just created for you and not put to work. You receive $102 back after 3 months, but now it costs you $102 to buy all the same groceries for the month that used to cost $100.

There does seem to be something fishy going on IMHO. Maybe I am wrong. Maybe there is nothing sinister at work, but certainly something is amiss amongst all the hype. My fear is that it will cost those who wish to cash in on a get rich quick scheme who are too trustworthy without giving a good critical look at the situation.

First off, the whole point of the Bitcoin revolution was for decentralized NON-intermediated exchange. Offering a new altcoin in an ICO - as if it were a stock offering for a new company is misleading and dubious. An IPO of stock occurs after the company has existed for a while with private investment before they seek to go public. They usually go public to raise capital in order to grow the company. So is XPY an ICO for XPY or is it a way for Gaw to raise capital? Who is to say they don't control (directly or indirectly) or influence 51%+ of mining capacity? Of course they make claims but there is no way to really know it's all anonymous.

Second, the set aside reserve fund for marketing and adoption by merchants is simply an advertising budget. They can advertise and market all they want, but the fact is Bitcoin has free advertising every day. Bitcoin is the Goliath and while XPY may be the David in terms of technical stats and features, it will need more than a slingshot to get it accepted by merchants and consumers alike.

Third, the fiat reserve fund is all smoke and mirrors. This implies that to the extent they still have a dollar reserve in that account they can artificially prop up the market price as XPY/BTC and XPY/USD or EUR trading comes online. This makes Gaw the de facto "Central Bank" of XPY controlling the 'price of money' (can be interpreted here as the interest rate due to the Proof-of-Stake return feature). Proof-of-work miners who can transact in BTC already have no reason not to simply mine for XPY and trade them for BTC online to effectively earn more BTC via XPY than mining for BTC directly. This is artifice and will collapse once that fiat reserve ultimately runs dry. They can also control the price of XPY to some extent by throttling the difficulty adjustments and have it deviate from the protocol. One way to encourage mining would be to artificially hold the difficulty low even while more and more hashpower is pointed at mining XPY. The problem is what if all these newly mined coins are subsequently traded for BTC? That will drive down the price in the market (denominated in BTC).

Finally, there is technological risk. Sure with today's ASICs this model is profitable, but remember that innovation in hardware in this space is moving incredibly fast. The price of hashing power has plummeted in the past year and will continue to plummet as more competition (especially from Chinese start ups etc) get going. And what about the competition that will likely be induced by the perceived profitability of the Gaw XPY ICO? There are no barriers to entry for another established firm or well-funded start up to copy and improve upon this model.

Look, I do NOT believe this is an outright scam. I do believe it smells fishy in its motives to profit Gaw and not necessarily its 'shareholders' (aka miners/hashlet owners). Is it also a slap in the face to the entire Bitcoin credo of non-intermediated exchange?

(And then there is this: https://bitcointalk.org/index.php?topic=857670.6860)