At what point do we stop kidding ourselves? Bye Bye mining farms.

[mrkubanftw]

It is illegal in the usa to run any form of private currency. Cite the liberty dollar experiment that went south back in 2008.


http://www.nytimes.com/2012/10/25/us/liberty-dollar-creator-awaits-his-fate-behind-bars.html?_r=0


This just goes to show, if it gets big enough, and it threatens what congress has set in place... they will slap the hammer down. We can't even get politicians to audit our IRS nor our federal reserve to see how much gold we actually have. To expand our 'federal reserve' that holds gold and prints money, is a private bank, with strong interest in this country. I'm not saying they are unbeatable but they will put up a huge fight. Considering they are basically holding our country hostage right now...

[ddink7]

Another post inspired by the psuedo-science of global warming. Carbon footprint is irrelevant...I don't care if the network uses 1.21 GW of energy, if it makes Bitcoin more secure.

[mrkubanftw]

Another post inspired by the psuedo-science of global warming. Carbon footprint is irrelevant...I don't care if the network uses 1.21 GW of energy, if it makes Bitcoin more secure.

We have proved here in this thread that centralized mining regardless of hashrate does not increase security it decreases it. Please read comments.

[photon_coin]

Satoshi predicted these events.
He said that btc could one day increase costs of things to sustain it.

I say let it run

[Lauda]

Another post inspired by the psuedo-science of global warming. Carbon footprint is irrelevant...I don't care if the network uses 1.21 GW of energy, if it makes Bitcoin more secure.

We have proved here in this thread that centralized mining regardless of hashrate does not increase security it decreases it. Please read comments.

Exactly. While many thinks that an increase in hashrate directly leads to an increase of security. Which is wrong. However we can't really say that it does not increase it at all.
I would say that it partially increases the security, because if someone new decides to do a 51% he would need many more miners. Although the downside here is obviously that a farm which is close to the necessary amount of hashrate for an attack could go rogue.

I do not see a way for mining to become decentralized again?

[LiteCoinGuy]

When doing these calculations one has to take into consideration that the bitcoin system may replace large bank datacenters , ATM machines , millions of big power hungry cash registers . CC terminals and scanners will eventually all be replaced by low power tablet devices. Plus , no longer the expenses of producing , securing , transporting cash , all of these are very expensive so ultimately alough bitcoin mining requires a lot of energy once it goes mainstream the overall energy consumption will be way less than the current fiat value transfer systems we use today.

[mayflor2]

In short, mining is really unprofitable now and wasting this amount of electricity is uneconomical too. 

[Eastwind]

The total cost of mining is usually similar to the block rewards.

It is still cheaper than cost of maintaining today's banking system, many many folds.

then why governments are not adopting bitcoin, it would be a win win situation for them, if the cost are vastly cheap, is only regualtion that prevent this? or there is somethign else...

i think they just don't like to not have the control over money

The answer is quite simple, although this might be a little off the topic. They are never going to adopt something that they can not control. If everyone were to use Bitcoin this moment, the banks would start dying out pretty quickly in my opinion. They could only die if someone were to start offering loans in Bitcoin (like banks do).

Actually they are trying to find ways to use the blockchain technology because it is cheaper for them. I wonder how much power banks waste compared to Bitcoin?

Exactly. Also, governments are controlled by people with money, the bankers.

[mrkubanftw]

Another post inspired by the psuedo-science of global warming. Carbon footprint is irrelevant...I don't care if the network uses 1.21 GW of energy, if it makes Bitcoin more secure.

We have proved here in this thread that centralized mining regardless of hashrate does not increase security it decreases it. Please read comments.

Exactly. While many thinks that an increase in hashrate directly leads to an increase of security. Which is wrong. However we can't really say that it does not increase it at all.
I would say that it partially increases the security, because if someone new decides to do a 51% he would need many more miners. Although the downside here is obviously that a farm which is close to the necessary amount of hashrate for an attack could go rogue.

I do not see a way for mining to become decentralized again?

Thank you!

I agree that it a sense it increases security by dictating that a 51% attack would require that much more hashing power from a new party, but yes in the sense that an Existing farm make an attack having already had a good portion of the net hash makes it less. So its a give and take depending which argument you wish to follow.


How do we DE-centralize this trend? Or at least slow this trend down? We would need hardware available at competitive rates when they are still at competitive speeds or it will never happen. Produce ONLY one type of miner? Which would increase the hell out of competition. Idk i'm all for input. ASIC was a huge mistake imo. It should have never been allowed on the network. As I look over at my S5's shaking my head lmao.

[mrkubanftw]

When doing these calculations one has to take into consideration that the bitcoin system may replace large bank datacenters , ATM machines , millions of big power hungry cash registers . CC terminals and scanners will eventually all be replaced by low power tablet devices. Plus , no longer the expenses of producing , securing , transporting cash , all of these are very expensive so ultimately alough bitcoin mining requires a lot of energy once it goes mainstream the overall energy consumption will be way less than the current fiat value transfer systems we use today.

While I do agree with this you have to consider banks are already doing this themselves. They want to cut costs as much as we do. Every chance they get they move to more electronic ways of doing things. Idk about you all but i already rarely if ever have cash on me or need to go to an atm. I have direct deposit like most people so i also rarely physically make deposits. Hell even back in 2008 i had a completely electronic bank of america account. Banks are not nearly as far behind as you would suggest.

[Miracal]

no one can touch bitcoin, enough said!!!

They can, they can put it up in sky and fuck it right through between if they have the power to. They will only have power if there is no strong support behind them. We need to be that strong support.

[mrkubanftw]

no one can touch bitcoin, enough said!!!

They can, they can put it up in sky and fuck it right through between if they have the power to. They will only have power if there is no strong support behind them. We need to be that strong support.

Yeah I agree. It would be short-sighted to say they Can't do this or do that. They can do whatever they please given enough motivation to do so. In other news a bit OT, we (USA) just legalized same-sex marriage on a federal level.

[jonald_fyookball]

 Hashrate will rise to an almost unprofitable state,

already happened.


https://blockchain.info/charts/hash-rate

How? I suppose its a matter of interpretation. It's still quite profitable in my area as well as many areas. Undervolted I would be over 50% profitable.

how?  it's already risen to the 400,000,000 level three months ago and hasn't moved beyond it.  as you said, it's 'almost unprofitable' (or else it would be rising further).  it may do so later , for example of the btc price rises, but for now, it ain't.

Dude.

http://www.coinwarz.com/calculators/bitcoin-mining-calculator

I already cited my predictions thread. You can't sit here and tell me its 'barely' profitable when one of the original profitability calculators is spelling out that it's (mining) is 200% profitable over electricity cost. Places like washington (all hydro power) are like 400% profitable. Unless you live in the EU or New York.. you should do just fine for while yet. I don't anticipate a jump in hashrate until the block reward halves. It's possible it might slightly pick up before then but i doubt it. I think the price of bitcoin will drop slightly over the next few months going into Q3 and when Q4 hits i expect KNC to launch whatever shenanagins they have planned and then we will see some action. Using the last 180 day horizon as reference we are lucky to have seen a 4% increase in hashrate per month, with 3-4 drops in diff. I think this is attributed to people changing out less efficient miners for more efficient miners. People have actually decreased hash power but with a lesser electricity cost so its more over profitable in the long run.

Aren't you ignoring the cost of mining gear? 

Obviously its marginally profitable.  How else would you explain the fact
that the hashrate hasn't risen meaningfully in 3 months.

[mrkubanftw]

 Hashrate will rise to an almost unprofitable state,

already happened.


https://blockchain.info/charts/hash-rate

How? I suppose its a matter of interpretation. It's still quite profitable in my area as well as many areas. Undervolted I would be over 50% profitable.

how?  it's already risen to the 400,000,000 level three months ago and hasn't moved beyond it.  as you said, it's 'almost unprofitable' (or else it would be rising further).  it may do so later , for example of the btc price rises, but for now, it ain't.

Dude.

http://www.coinwarz.com/calculators/bitcoin-mining-calculator

I already cited my predictions thread. You can't sit here and tell me its 'barely' profitable when one of the original profitability calculators is spelling out that it's (mining) is 200% profitable over electricity cost. Places like washington (all hydro power) are like 400% profitable. Unless you live in the EU or New York.. you should do just fine for while yet. I don't anticipate a jump in hashrate until the block reward halves. It's possible it might slightly pick up before then but i doubt it. I think the price of bitcoin will drop slightly over the next few months going into Q3 and when Q4 hits i expect KNC to launch whatever shenanagins they have planned and then we will see some action. Using the last 180 day horizon as reference we are lucky to have seen a 4% increase in hashrate per month, with 3-4 drops in diff. I think this is attributed to people changing out less efficient miners for more efficient miners. People have actually decreased hash power but with a lesser electricity cost so its more over profitable in the long run.

Aren't you ignoring the cost of mining gear? 

Obviously its marginally profitable.  How else would you explain the fact
that the hashrate hasn't risen meaningfully in 3 months.

No i'm not ignoring it i'm assuming you already have it.. as do i. ROI and profitability are slightly different my friend. The ROI calculator iv'e created has many other aspects than just price involved. Heavy speculation is needed.

[johnyj]

A cryptocurrency that cost nothing to make will eventually worth nothing, because it is voluntarily participated. Why should I pay 200 dollar for something that cost nothing to make??? Suppose that you can generate 1 bitcoin today with a cost of 1 dollar, then everyone will immediately go to generate coin and sell it on market for $199 of profit right away, that will drag the price down to 1 dollar.

First, if I gave 144 people 25 bitcoins each, and they sold them, what would happen to the price of a bitcoin? According to you, the market would collapse because it cost them nothing to gain those bitcoins. Obviously, it wouldn't because there are enough free bitcoins to affect the market. You can't generate an unlimited number of bitcoins, so you can't drag the value down to the marginal cost.

Second, suppose Bitcoin was premined and 1 bitcoin was given to each of 21,000,000 people. Would the value of the bitcoins forever be 0? What if other people wanted some? What if people wanted two or more? What if one person managed to collect 10,000 and got someone to trade two pizzas for them? Would the value still forever be stuck at 0? No.

Don't you see? The value of a bitcoin has nothing to do with the cost of creating it. The supply of bitcoins does not depend on their value and bitcoins are not consumed. The economics of gold, oil, and other commodities do not apply to bitcoin.

These are good arguments

Your first assumption is exactly like those chinese miners with free electricity, they can dump their cheap coin on the market to make a quick buck. But since the bitcoin supply is extremely limited, a large hedge fund would still be possible to raise the market price by 10 fold regardless of sell pressure out there (They can anticipate how large the sell pressure can be)

However, after the rally is over, the hedge fund cashed out and went for vacation for two years, now we are left with all the miserable bitcoin investors seeing a falling market. In a falling market, many of bitcoin's promises are broken, so the demand will also shrink significantly. In such a time, how much should a bitcoin worth becomes very important for people's decision making. And naturally, a common indicator is the mining cost: If the coin worth more than mining cost, miners will sell, if lower, miners will hold, that will adjust the supply. And this is what happened during 2014, exchange rate kept going down until they got close to mining cost

And as you said, if there is no new supply, then even the cost is zero, the coin could still worth something if there is certain amount of demand. I'm not totally sure about this reasoning, but this reasoning can work if the demand of this coin is unique, can not be replaced by anything else(like diamond), or the demand is forced on many people (like fiat money). Bitcoin is not forced on anyone, so that leaves us with only the "unique demand" requirement, and there is indeed a unique demand: anti-inflation currency. Non of the other fiat currencies in the world are anti-inflation. However, any other cryptocurrency can also be anti-inflation

So what makes bitcoin different than any other alt-coins would be its large community. If this community is large enough, everyone prefer to use bitcoin for transaction, then bitcoin will work like fiat money, automatically hold its value without production cost. But to be honest, most of the community consists of speculators, real bitcoiners are minority, so the community and its value are very unstable, depends on the price movement

If there is any new coin generation, or fee generation, and people are possible to participate the mining, then the mining competition will raise its cost to the market price. Imagine that when one coin worth 1 million dollar while mining each block will give you a fee of 1 bitcoin, the mining cost of each block would get close to 1 million dollar due to competition

Actually you can also use this to explain the price rally: When this community expands very fast, the demand surge and the price of bitcoin will rise exponentially, causing the mining infrastructure to expand, mining cost to rise. And when price is going down, the community also shrinks very fast, the demand goes down and price crash further, but get some strong support around the mining cost

[mrkubanftw]

A cryptocurrency that cost nothing to make will eventually worth nothing, because it is voluntarily participated. Why should I pay 200 dollar for something that cost nothing to make??? Suppose that you can generate 1 bitcoin today with a cost of 1 dollar, then everyone will immediately go to generate coin and sell it on market for $199 of profit right away, that will drag the price down to 1 dollar.

First, if I gave 144 people 25 bitcoins each, and they sold them, what would happen to the price of a bitcoin? According to you, the market would collapse because it cost them nothing to gain those bitcoins. Obviously, it wouldn't because there are enough free bitcoins to affect the market. You can't generate an unlimited number of bitcoins, so you can't drag the value down to the marginal cost.

Second, suppose Bitcoin was premined and 1 bitcoin was given to each of 21,000,000 people. Would the value of the bitcoins forever be 0? What if other people wanted some? What if people wanted two or more? What if one person managed to collect 10,000 and got someone to trade two pizzas for them? Would the value still forever be stuck at 0? No.

Don't you see? The value of a bitcoin has nothing to do with the cost of creating it. The supply of bitcoins does not depend on their value and bitcoins are not consumed. The economics of gold, oil, and other commodities do not apply to bitcoin.

These are good arguments

Your first assumption is exactly like those chinese miners with free electricity, they can dump their cheap coin on the market to make a quick buck. But since the bitcoin supply is extremely limited, a large hedge fund would still be possible to raise the market price by 10 fold regardless of sell pressure out there (They can anticipate how large the sell pressure can be)

However, after the rally is over, the hedge fund cashed out and went for vacation for two years, now we are left with all the miserable bitcoin investors seeing a falling market. In a falling market, many of bitcoin's promises are broken, so the demand will also shrink significantly. In such a time, how much should a bitcoin worth becomes very important for people's decision making. And naturally, a common indicator is the mining cost: If the coin worth more than mining cost, miners will sell, if lower, miners will hold, that will adjust the supply. And this is what happened during 2014, exchange rate kept going down until they got close to mining cost

And as you said, if there is no new supply, then even the cost is zero, the coin could still worth something if there is certain amount of demand. I'm not totally sure about this reasoning, but this reasoning can work if the demand of this coin is unique, can not be replaced by anything else(like diamond), or the demand is forced on many people (like fiat money). Bitcoin is not forced on anyone, so that leaves us with only the "unique demand" requirement, and there is indeed a unique demand: anti-inflation currency. Non of the other fiat currencies in the world are anti-inflation. However, any other cryptocurrency can also be anti-inflation

So what makes bitcoin different than any other alt-coins would be its large community. If this community is large enough, everyone prefer to use bitcoin for transaction, then bitcoin will work like fiat money, automatically hold its value without production cost. But to be honest, most of the community consists of speculators, real bitcoiners are minority, so the community and its value are very unstable, depends on the price movement

If there is any new coin generation, or fee generation, and people are possible to participate the mining, then the mining competition will raise its cost to the market price. Imagine that when one coin worth 1 million dollar while mining each block will give you a fee of 1 bitcoin, the mining cost of each block would get close to 1 million dollar due to competition

Actually you can also use this to explain the price rally: When this community expands very fast, the demand surge and the price of bitcoin will rise exponentially, causing the mining infrastructure to expand, mining cost to rise. And when price is going down, the community also shrinks very fast, the demand goes down and price crash further, but get some strong support around the mining cost

Yeah I agree! Solid input guys! I really enjoyed reading your reply.

[johnyj]

To expand the community is the key to success, but mining concentration definitely does not help to get more people involved. Bitcoiner usually started with mining, and get to know the other aspects later on. We need good more businesses to sell millions of miners to individuals to let them experience money creation in bitcoin ecosystem, and they will feel the difference with fiat money system where no one except the banks are allowed to create money

[Dexter770221]

PS4 or XONE consumes ~100W when playing games. Also casual gamer PC consumes same amount of power (not to mention enthusiast PC). In every second there is at least 10M players worldwide (propably alot more). That equals to 1GW of power wasted just for fun. You say Bitcoin network is wasting power?

[odolvlobo]

PS4 or XONE consumes ~100W when playing games. Also casual gamer PC consumes same amount of power (not to mention enthusiast PC). In every second there is at least 10M players worldwide (propably alot more). That equals to 1GW of power wasted just for fun. You say Bitcoin network is wasting power?

More energy is spent on watching cat videos than on mining bitcoins. Sorry, no citation. You'll just have to believe me. 

[Eastwind]

Bitcoin can add another PoW algorithm which is difficult to implement in ASIC and can be mined by most people but not botnet. This will help solve the cetralisation problem.