paulie_w (OP)
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September 26, 2012, 06:02:10 PM Last edit: September 26, 2012, 06:03:56 PM by hazek |
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sure, nobody knows what will happen to the market when the reward halving happens, but what are the miners PLANNING?
can any pool operators comment?
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AmDD
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September 26, 2012, 06:23:23 PM |
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I plan on watching what the market does and either continuing mining or not.
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casascius
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The Casascius 1oz 10BTC Silver Round (w/ Gold B)
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September 26, 2012, 06:25:20 PM |
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I imagine it's the same for most miners: they will either continue mining or they will not.
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Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable. I never believe them. If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins. I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion. Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice. Don't keep coins online. Use paper or hardware wallets instead.
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tHash
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September 26, 2012, 06:28:12 PM |
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GPUs are definitely going to be done. ASICs should be arriving about that time.
I may just hold the coins minted with the expensive hardware for a while, if the value does not increase at least a bit.
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dirtycat
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September 26, 2012, 06:58:19 PM |
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im liquidating all my coins and gpus the week prior... then using the funds to buy ammo, firearms, and canned food. december 21st is right around the corner!
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poop!
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P_Shep
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This is not OK.
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September 26, 2012, 07:35:46 PM |
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I'll react like this:
o_o
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nedbert9
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September 26, 2012, 07:52:20 PM |
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US Govt prints ridiculous amounts of currency
BFL produces a ridiculous amount of asics
Reward halves
Guess I'll go buy some gold.
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slush
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September 26, 2012, 07:55:49 PM |
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how are you going to react to the reward halving? can any pool operators comment?
Hm... keep on mining?
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os2sam
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Think for yourself
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September 26, 2012, 08:01:17 PM |
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sure, nobody knows what will happen to the market when the reward halving happens, but what are the miners PLANNING?
can any pool operators comment?
The same thing I was planning when I started mining over a year ago, keep on mining. Not like this is an unexpected event. It's the way bitcoin works. What are you planning? What comment would you expect the pool operators to have? Sam
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A: Because it messes up the order in which people normally read text. Q: Why is top-posting such a bad thing? A: Top-posting. Q: What is the most annoying thing on usenet and in e-mail?
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Ivica
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September 26, 2012, 08:02:26 PM |
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US Govt prints ridiculous amounts of currency
BFL produces a ridiculous amount of asics
Reward halves
Guess I'll go buy some gold.
It's not like even, if you bring 100x times more hashpower to pools, they will mine ridiculously more coins. There is difficulty to keep sure there is only 1 block per 10 minutes. ![Grin](https://bitcointalk.org/Smileys/default/grin.gif) Though, nothing stops US gov.
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Stephen Gornick
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September 26, 2012, 09:41:30 PM |
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I plan on watching what the market does and either continuing mining or not.
But I am perplexed. One argument is that even when BTC daily production drops [Edit: the block reward], if the exchange rate rises maybe to the $20 range and difficulty doesn't rise much, that come December, mining can still be done profitably --- barely. So today let's say a 58xx GPU might sell for $150 or whatever. But if the exchange rate does rise from today's $12 to $20, isn't that $150 worth of value better invested in BTCs than in GPUs? Sure, the GPU will still be worth $150 or whatever in December after the drop, so there's not a lot of risk in waiting to see if the exchange rate does rise sufficiently to compensate, but you'll definitely miss the opportunity to capture the increase in the BTC/USD from $12 to $20. But if it doesn't rise you'll be selling the hardware then. And regardless, how much longer after the reward drop before ASICs will decimate GPU mining entirely? Unless you have really cheap (e.g., $0.05 per kWH) electricity (or free if included in rent, lease, botnet, etc.) the likelihood that you'll continue mining on GPUs in 2013 is approaching zero. But for now, .... the less risky move is to dance while the music is playing I guess (er ..., to milk that cow while it is still producing.)
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AmDD
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September 26, 2012, 09:49:32 PM |
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I plan on watching what the market does and either continuing mining or not.
But I am perplexed. One argument is that even when BTC daily production drops [Edit: the block reward], if the exchange rate rises maybe to the $20 range and difficulty doesn't rise much, that come December, mining can still be done profitably --- barely. So today let's say a 58xx GPU might sell for $150 or whatever. But if the exchange rate does rise from today's $12 to $20, isn't that $150 worth of value better invested in BTCs than in GPUs? Sure, the GPU will still be worth $150 or whatever in December after the drop, so there's not a lot of risk in waiting to see if the exchange rate does rise sufficiently to compensate, but you'll definitely miss the opportunity to capture the increase in the BTC/USD from $12 to $20. And regardless, how much longer after the reward drop before ASICs will decimate GPU mining entirely? Unless you have really cheap (e.g., $0.05 per kWH) electricity (or free if included in rent, lease, botnet, etc.) the likelihood that you'll continue mining on GPUs in 2013 is approaching zero. But for now, .... dance while the music is playing (er ..., milk that cow while it is still producing.) Im newish to bitcoins and have only just recently bought my GPUs and started mining. I bought them second hand and used other hardware I already had laying around. Once my hardware is paid for its all profit for me. Even if I only just breakeven Im happy because I love playing around with computer hardware and I would have done something similar anyway with zero return. But it is that simple for me, if the market crashes I'll sell my hardware and move on, if it doesnt I'll keep mining.
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SgtSpike
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September 26, 2012, 09:55:52 PM |
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I'll still be mining... not on GPU's though.
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eleuthria
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September 26, 2012, 10:53:03 PM |
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Miners really shouldn't have much to worry about. The portion of miners that will mine at a loss is very low.
When reward is halved, gross revenue is halved, and profit is cut in more than half since expenses are static. Miners will drop out, difficulty will drop. ASICs won't have a big effect on this. It's very simple economics. X investment returns an average of Y profit. The more profit to be had, the more people mine, the worse their profit margin becomes.
The key here is the following formula: Price/Difficulty * Block Reward. If half as many coins are produced per day, difficulty will be cut in half (not precisely, but very close), unless price doubles, in which case difficulty would be roughly the same. Obviously it will be a mixture of the two. It will be worse off than we are now because there will always be hobbyists (who mine at a loss), botnets (who mine at no cost), and people with "Free" electricity (who effectively steal it from their oblivious landlord).
The only thing miners are going to notice is pool fees will likely go up/pools will cease to be free. The reward halving DOES cut pool operator income in half, assuming each pool loses speed proportional to their current share of the network. This is because pool's earn [at neutral luck]: Pool Fee * Pool Share of Network * 7200 BTC (daily production of BTC). With the change, pool's will be earning: Pool Fee * Pool Share of Network * 3600 BTC (daily production of BTC).
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SgtSpike
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September 26, 2012, 10:57:10 PM |
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Pool income is something I hadn't thought about before eleuthria - thanks for bringing that up.
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stevegee58
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September 26, 2012, 11:29:42 PM |
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I've been mining since Jan 8, 2012.
When I started I was making about 0.13 BTC/day with difficulty=1,250,758. During that period the exchange rate was about $6.50/BTC. $0.84/day in Jan 2012.
As of today the difficulty is 2,864,141 and I'm making about 0.07 BTC/day. (I wasn't making as much as I could in January because I didn't know how to overclock). The exchange rate is $12.32/BTC. $0.87/day today
If the exchange rate is still $12.32/BTC on halving day I'll drop to $0.43/day. Actually less because the difficulty will be somewhat higher.
The thing is, I don't look at this like I'm making so many dollars/day income. I'm accumulating BTC for speculation and I personally think BTC will be worth much more than $12.32 in the long run. So the halving doesn't bother me at all.
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paulie_w (OP)
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September 26, 2012, 11:41:43 PM |
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will the miners band together and demand a higher sell price for bitcoin?
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stevegee58
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September 26, 2012, 11:43:43 PM |
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will the miners band together and demand a higher sell price for bitcoin?
They won't have to. It's going to go up on its own through normal market forces.
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You are in a maze of twisty little passages, all alike.
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CoinLab
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September 26, 2012, 11:53:58 PM |
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We're going to transition our GPU hashing power to solving other High Performance Compute problems, like protein folding and CGI rendering, while continuing to pay out our miners in Bitcoin.
If you're worried about your GPU miner no longer remaining profitable, you should check out our Protected Pool. When mining earnings drop, you'll be able to sell us a number of shares at a guaranteed price ($2.5 per GH/s per day) equal to the number of shares you submitted to us before the price drop.
This rate should keep most rigs profitable, so if you mine with 10GH/s for 6 months before GPU mining earnings plummet, our pool will let you keep your same 10GH/s earning for another 6 months. Or, sell half your cluster, and you'll have 12 months of runway at 5GH/s (or 24mo at 2.5 GH/s...). We can offer this because we'll be able to sell your GPU compute power at higher-than-bitcoin rates, and your rig will be solving these more-valuable work units.
You can read more about our pool in the link in our signature.
</shamelessplug>
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Stephen Gornick
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September 27, 2012, 08:53:45 AM |
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If the exchange rate is still $12.32/BTC on halving day I'll drop to $0.43/day. Presuming you are like most other GPU miners and pay a normal electric rate (e.g., $0.15 per kWh) then your electricity for the rig will likely exceed $0.43/day. But let's say it is break even. You'ld rather pay $12 to your electric company for a month of mining which yields 1 BTC versus sending $12 to an exchange and getting your 1.0 BTC that way? And if your electric bill comes in higher than the $0.43 per day, then you are paying above market rate to buy -- and you are going through the effort of managing a rig for free. If it is a hobby, then call it a hobby. But anyone mining GPUs for the purpose of profit should know right now ... in about 60 days the party is over. [Edit: Of course, there are other uses for your GPUs, but mining BTC for-profit is specifically what I'm addressing.]
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