Tarnished image

[MooC Tals]

My barber found a tattoo just like that on my scalp the other week.
Could be a bad OMEN

[rabbitweasel]

Distrust of your peers won't bring down bitcoin but it sure won't help it get anywhere. By that I mean more focus should be on how to sustain bitcoin in the long run. Dying GPU mining means fewer miners with ASICs becoming more common so more future bitcoins for fewer people. Fewer coins being mined to cover costs. Transactions per block growing too quickly for current 1MB size limit (increased size will hurt smaller pools but most people don't give a shit). Lost coins (a significant amount of the 11.3m -ish coins currently). We get fair discussion on these items but they are overshadowed by flaming competitions among the large drama user base over future predictions to the point that it's not worth discussing any new insight. To quote a work saying I know, negativity kills productivity.

I think this is the biggest challenge of bitcoin though I'm hopeful that with an increasing difficulty will be good for the community. Less complaining originating from miners looking to make any money at all and more on uses for bitcoin and solving problems like the sliver above. I don't think bitcoins should really be viewed as a way to make money at all and I only support covering transaction costs in the long run (no problem with speculation though for making/losing money).  

[Explodicle]

Transactions per block growing too quickly for current 1MB size limit (increased size will hurt smaller pools but most people don't give a shit).

In addition to block size increases, there are a couple improvements coming down the line to help with transaction volume:
1) Micropayment channels will allow sites like Satoshi Dice to compress each customer into a single transaction per block.
2) Off-chain transactions will be much more secure when they start using multi-signature transaction to hold funds.
Hopefully (fingers crossed!) these will be in easy-to-use clients before Bitcoin gets much more popular.

[bluemeanie1]

Transactions per block growing too quickly for current 1MB size limit (increased size will hurt smaller pools but most people don't give a shit).

In addition to block size increases, there are a couple improvements coming down the line to help with transaction volume:
1) Micropayment channels will allow sites like Satoshi Dice to compress each customer into a single transaction per block.
2) Off-chain transactions will be much more secure when they start using multi-signature transaction to hold funds.
Hopefully (fingers crossed!) these will be in easy-to-use clients before Bitcoin gets much more popular.

how exactly does that work?

what is a 'multi-signature' off-chain transaction?

[Explodicle]

This video helps explain multisignature transactions and micropayments.
http://www.youtube.com/watch?v=mD4L7xDNCmA
One can already do command-line multisignature transactions with the Satoshi client, but it's a big hassle.

Open-Transactions shows great promise as an off-chain solution; I suggest anyone who wants both small blocks and low fees should consider helping with its development either directly or via the "holy grail" bounties.
https://bitcointalk.org/index.php?topic=225954.0
Ripple could be an off-chain solution too, but I'm not holding my breath waiting for them to release the source code.

In-chain micropayments appear to be further away, though. 

========

Thinking more about the zero-sum mining thing... If Bitcoin's market cap is higher than the total sum spent mining (has anyone measured this?), it might be because the exchange rate has gone up since most of the coins have been mined. Coins which were sold and THEN gained value would be speculation profit, not mining profit. I'm assuming price drives difficulty but not vice-versa.

The main point I'm trying to make is if mining was positive-sum, more people would mine (reducing profits for other miners) until it became zero-sum. With expensive hardware it makes sense to mine at a slight loss sometimes, since hardware is a sunk cost. So if we're in an ASIC bubble, could the market be temporarily negative sum?

[crumbs]

[...]
Thinking more about the zero-sum mining thing... If Bitcoin's market cap is higher than the total sum spent mining (has anyone measured this?), it might be because the exchange rate has gone up since most of the coins have been mined. Coins which were sold and THEN gained value would be speculation profit, not mining profit. I'm assuming price drives difficulty but not vice-versa.

The main point I'm trying to make is if mining was positive-sum, more people would mine (reducing profits for other miners) until it became zero-sum.

By using your logic, *every business becomes a zero-sum game*.  If making widgets is profitable, more and more people start making widgets until the profit margin becomes zero.  Therefore, widget manufacture is a zero-sum game. (widget = anything you want, a placeholder, fill in the blank)

With expensive hardware it makes sense to mine at a slight loss sometimes, since hardware is a sunk cost.

Yes, sometimes.  It's like putting up a buy wall in hopes of stemming the sell tide.  Anyone not heavily invested in the currency they're mining at a loss is a fool or a good Bitcoin  Samaritan.  Call me jaded, but i don't like the odds with either one.

So if we're in an ASIC bubble, could the market be temporarily negative sum?

No.

[Explodicle]

By using your logic, *every business becomes a zero-sum game*.  If making widgets is profitable, more and more people start making widgets until the profit margin becomes zero.  Therefore, widget manufacture is a zero-sum game. (widget = anything you want, a placeholder, fill in the blank)

Not all businesses are like Bitcoin mining; miners are in strict competition for a fixed reward. If widget supply goes up and demand is elastic, the total amount paid for widgets per day will increase... but the number of new Bitcoins created per day is fixed, and mining difficulty doesn't drive Bitcoin price. Mining is like a difficulty futures contract, and futures trading is zero-sum (unless the future in question influences you in some way, like farmers buying/selling crop futures).

Didn't you give up on logic and appeal to authority already?

[crumbs]

By using your logic, *every business becomes a zero-sum game*.  If making widgets is profitable, more and more people start making widgets until the profit margin becomes zero.  Therefore, widget manufacture is a zero-sum game. (widget = anything you want, a placeholder, fill in the blank)

Not all businesses are like Bitcoin mining; miners are in strict competition for a fixed reward. If widget supply goes up and demand is elastic, the total amount paid for widgets per day will increase... but the number of new Bitcoins created per day is fixed, and mining difficulty doesn't drive Bitcoin price. Mining is like a difficulty futures contract, and futures trading is zero-sum (unless the future in question influences you in some way, like farmers buying/selling crop futures).

Didn't you give up on logic and appeal to authority already?

Aaaagh!   You win 5 internets.  I guess i'm just a bleedin' heart wussy, still thinking that no one's beyond help

[ScaryHash]

I disagree with the OP.

I just started mining in May. There are many nice people here who have been very helpful.

There is a certain level of frustration that seems to exist regarding ASICS, but I suppose that's what the horses felt when the automobile came onto the streets for the first time.

I'm sure it will pass.

[LostDutchman]

Whether you are mining BTC with ASICS or LTC with scrypt, you cannot lose.

The End.

My $.02.