People do not die because no one helps them. They die because of diseases, accidents, genetic issues, poisons, violence, and sometimes just simple old age.

If I were to use your logic, I could claim that I save hundreds of people every day by refraining from killing them.

If you already have 100 BTC there will never be more than 210,000 people who have more bitcoins than you.

Think about that for a moment, and then think about how many have been lost forever already.

To provide historical perspective, I posted this in August of 2013:

"With the price of shares of AM so closely tied to the btc/fiat rate, it is becoming difficult to calculate the correct ROI, and to determine if it is in fact positive.

At $90 per bitcoin, AM shares averaged around 4.5 each. 4.5 * 90 = $405.

At $120 per bitcoin, AM shares averaged around 3.3 each. 3.3 * 120 = $396.

At $130 per bitcoin, AM shares average around 2.9 each. 2.9 * 130 = $377.

Today:

At $140 per bitcoin, AM shares average around 2.5 each. 2.5 * 140 = $350."

As of today, that calculation comes out to:

At $370 per bitcoin, AM shares average around 0.65 each. 0.65 * 370 = $240.

If at any point listed you had sold AM shares and just put them into BTC you would have done much better than holding them.

Chart the dollar price per share vs the price of a bitcoin for an intersting surprise.

Bitcoin is international and wrecks the "round number" phenomenon. For a trader in China, $1000 per bitcoin has no more meaning from a psychological aspect than $383. I mean, does an American care that CNY passes 20,000 Yuan? Not really.

The psychological barriers are only local, bitcoin is global.

Apparently most people think there is some big meter attached to the network that measures the global hash. This is not true at all.

When you go to websites that tell you the global hashrates, they are giving you the information based upon a calculation. The look at the difficulty (a known number) and the time between solved blocks (a known number) and they calculate an approximation of the hash rate required to perform that. They average these numbers over several timeframes to smooth out the curves and give us reasonable approximations... but these are of course just approximations and can be skewed by large difficulty increases.

The global hash does not drop when difficulty increases, it is just a temporary lag where calculations are not reflecting reality quite so closely.

One of the contributing factors to this apparent loss of hash rates we are experiencing is the huge volume of transactions recently. The number of transactions is increasing faster than the actual hash rate. Additionally, as the global hash increases, it becomes more difficult to ship or manufacture enough hash to make a percentage increase.  You cannot have exponential hash increases forever, because if you could we would need the entire energy output of the sun by 2016 to increase the global hash by another 50%. It is slowing because it has to. 40% or 50% increases every two weeks simply cannot continue. There just is not enough energy available. I saw somewhere a chart where someone projected that if we kept increasing the hash rates by 50% every 2 weeks and had 28nm chips that by 2015 we would be using the entire energy output of the united states just for hashing.

diff

It is already stalling...

This will not affect the dividends for some time I am sure. Everyone seems to price shares by the dividends. That being said, I expect the share prices to languish until the dividends explode. By then it will be too late to get on the bandwagon, as always occurs.

Buy when there is blood on the streets. It is pennies on the dollar.

in April when btc hit $266 and crashed, those who bought for more than $140 were cursing for months.

I bet there are plenty who would gladly pony up for coins at $266 today.

This thing has not even begun to crawl yet.

I think the most overlooked statement is that there are currently no commercial data centers available that are designed to to handle the requirements of of a world-class farm. And definitely none that can scale to the farms of the future.

The brick wall that AM hit was not an inability to create chips and boards. It was finding a place to put them. The datacenters of today were not designed for the sort of high-heat high-density equipment that make bitcoin mining profitable. They were built for commercial servers and hard drive arrays... very different. Trying to build a mining farm can quickly overwhelm the resources and capacity of a datacenter built for common blade servers. Expansion starts to get really expensive when you count electricity, cooling, and especially infrastucture and even the building itself.

So he solved it.

Building? Poof, it's gone. Replaced by a $3000 shipping container. Cooling? 97% of costs eliminated. Not just high density of chips, but high density of boards. The very definition of optimization.

AM is doing for farms what ASIC technology did to video cards. Making anyone using generic facilities outdated, under-performing, uncompetitive, and obsolete.

He created ASCF: Application-Specific Computing Facility. (Coined here first!)

FC is so far ahead of the curve he is beyond the horizon.

I do agree that purchasing mining equipment is a way of structuring a purchase of bitcoins, what makes it different is that the total number of bitcoins returned is only a poor estimate due to the inability to accurately predict difficulty increases... one could say it is a bet as to the time difficulty increases will plateau.

That said, I personally believe that there is a component of bitcoin price directly tied to the cost of mining additional coins. There have been quite a number of voices expressing the opinion that they are unrelated. The problem in my opinion was that there was no useful metric. Cost per Gh/s is meaningless as the global hash increases. Fluctuations in the value of BTC make cost analysis almost useless. For that reason I selected a metric that does not ever change as a baseline. 1 bitcoin/day was that metric to which I measure everything else. The change over time of the cost to mine 1 bitcoin per day does not rely on good estimates of future difficulty rates, does not depend on future btc values, and measures today at this moment what is required. No one can with any accuracy project what a particular device will obtain over it's useful lifetime in dollars because no one really knows future difficulty or conversion rates. But they can with reasonable certainty calculate what it costs in dollars today to buy the gear to get 1 btc/day. And that amount is nearly twice what it was two weeks ago.

That tells me that whatever component of btc price is related to mining costs has nearly doubled in two weeks. Comparing this over time with btc prices should allow me to get a rough estimate of what part of the price is related to mining costs. It is really not so complicated.

In the examples above, just use an IOU instead of money.

John the baker creates an IOU for 10 loaves of bread and gives it to Bill the farmer for a sack of wheat.

When John makes the bread, he gives it to Bill in return for the IOU.

Now, the question to be asked is: What is the value of the IOU that John now holds? The answer is ZERO.

"Money" was created in the transaction and destroyed when the transaction was complete. If Bill had traded off that IOU instead of cashing it in, it would retain it's value only until it returned to John. The only way it can keep it's value is if never gets to John.

The banks are John. They create money that only has value if you don't pay it back. When you pay them back it goes poof into the nothingness from which it sprang. But they don't care, because they collect interest on the money they create.

Credit and debt are things which can barely struggle to exist in a deflationary currency. Investing in the currency is generally your best investment overall. Money under the mattress > lending it out because it is essentially riskless investing to just stick it under the mattress. It is a completely different paradigm from that which we are accustomed.

When the first leak occurred a few days ago, the price of a cube was listed at 1.99 btc. That is was around $450, a great price for 30Gh/s.

Today 1.99 btc is $622. You are getting close to what you need to pay for a 30 Gh/s BFL box on ebay. By this weekend, if btc keeps rising, it may be hopelessly overpriced.

Simple enough question to ask, a hard one to answer. Context:

The process of moving to a bitcoin economy may essentially be a story of massive wealth distribution on a scale never before witnessed. The best way to visualize this is the case of the Norwegian chap who bought $27 of bitcoins in 2009 and was rewarded with $885,000 and change for the investment. The world economy hoovered up $885,000 and handed it to him. In his eyes, wealth has certainly been redistributed. But where exactly did it come from? As I watch my bitcoins increase in value, one has to ask where that wealth is being transferred from. It is obviously not being created out of air. The answer is simple but elusive:

Every time bitcoins rise in value, the value of a dollar goes down.

This statement may sound bizarre, but let me explain.  The pool of dollars as a representation of wealth is huge compared to bitcoins. When the price of btc jumps from $100 to $200, this is a huge movement because the bitcoin market cap is so small. This also correlates to loss in dollar value, but it is so small compared to the available pool that it is unnoticeable. Perhaps every dollar loses a billionth of a cent in purchasing power. But billionths of a cent add up when you consider every dollar in existence. Those billions of a cent by definition must add up to the new market cap of btc. When btc hits 3 billion in market cap, 3 billion in value is removed from dollars... spread out across the trillions and trillions and trillions of them. It is almost invisible.

But at some point, the market capitalization of btc WILL be noticeable. The value of the dollar is already decreasing due to government and banking policies. We know this as inflation of course. Bitcoins currently are such a small factor adding to this inflation that no one would even think of tracking it. But imagine a trillion dollar market cap for btc. That is like the fed printing up another trillion dollars. Would that be a noticeable inflation? How about 10 trillion? 100 trillion? Start thinking Zimbabwe.

A million dollars can always buy a million dollars of bitcoins. The problem lies with just exactly what goods your million dollars can buy at this point. Maybe a toaster or a gallon of gas. maybe. We are already seeing the first stages of the prisoners dilemma. Those who move their fiat to btc first will get the most. The longer you wait to defect the worse off you will be. He who defects first defects best the saying goes. The wealth will be distributed to the early adopter, not so much to those who wait. The last will be trading toilet paper fiat for a few satoshis. It is from the late adopters that the wealth will all be transferred.

So it is important to ask this question.

It will prove the correlation between the cost of minting new bitcoins and the value of a bitcoin. Or disprove it. When it costs a million dollars to buy the gear to mint one bitcoin per day we will have our answer.

Because I am measuring the price of asic miners in dollars instead of btc. At over $300 per coin the blades are now more expensive than the bfl singles when measuring hash/dollar. Ebay was chosen for price points because it is liquid and responsive.

I am tracking dollar cost to mine 1 coin per day. Not bitcoin cost to mine 1 coin per day.

Prices of ASICs on ebay are actually increasing. That's what happens when the price of btc moves up 18% in 24 hours.

You don't turn off asics once you buy them. Their profits can be measured in fiat as well as btc.

October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16900 (13 BFL singles from ebay) ($21.72/Gh/s)

November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22013 (17 BFL singles from ebay) ($21.66/Gh/s)

It was much cheaper in dollar terms just 2 weeks ago to get a bitcoin per day. Not quite half the price, but I do see a trend developing.

This trend will likely break once some supply of more cost-efficient asic's becomes available for immediate delivery in bulk, possibly the AM cube on the 14th.

Volume high on all exchanges. All of that fiat flushed into the system over the last week is becoming eligible to purchase BTC. It should take at least a week before it slows down and corrects.