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Author Topic: Newly minted idiot  (Read 7979 times)
Synaptic
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June 16, 2011, 10:51:02 AM
 #1

http://www.reddit.com/r/Bitcoin/comments/i0r4o/ready_for_a_little_casual_mining/

What a poor sap...judging by the time this was posted, this is likely a delivery to someone who went all-in and ordered everything when they saw BTC at $30.

Hopefully this isn't some dipshit with a wife and kid(s)...cause this fuck-face is in for a rude awakening in about 15 days, lol.
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June 16, 2011, 11:27:49 AM
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What a perfect illustration of the Tragedy of the Commons.
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June 16, 2011, 11:29:49 AM
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I'm sure he can make a profit. I'm jealous.

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June 16, 2011, 11:35:40 AM
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What a perfect illustration of the Tragedy of the Commons.

How?
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June 16, 2011, 11:45:10 AM
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If you haven't noticed all cards are 5770... Which you can get dirt cheap. Smart investment.

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June 16, 2011, 03:13:34 PM
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Saw the picture last night...

I'd hope he got everything on a discount.  I'll reserve my judgement until it's known what he paid for all of that.  with the priced of used 5770's, I would hope you'd be getting them @$60 or so each if you're buying quantity like that.

They are however decent hash / power consumption.
Synaptic
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June 16, 2011, 03:22:37 PM
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Saw the picture last night...

I'd hope he got everything on a discount.  I'll reserve my judgement until it's known what he paid for all of that.  with the priced of used 5770's, I would hope you'd be getting them @$60 or so each if you're buying quantity like that.

They are however decent hash / power consumption.

Nothing there appeared to be used goods.

In all likely-hood everything there, including the rented office space, was paid for on credit/loan(s). I have a hard time imagining anyone with that kind of disposable income (unless it's some bored rich young man) wasting it on such a speculative venture...

Even at the very lowest end that easily $10k worth of gear there, plus rent, plus electricity.  Everything here (yes, it's just a picture, but knowing what we do of bitcoining so far we can make pretty damn good assumptions) points to this being someone who supposes they can make a business out of this.

I just hope he doesn't have a family, or has a shitload of disposable income and a hell of a lot of otherwise worthless free time to kill.
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June 16, 2011, 03:24:06 PM
 #8

In the long run, the profitability of mining doesn't depend on the price of BTC.  It depends on whether you can mine a Ghash cheaper than the competition.

and what's gonna happen in 15 days, oh prophet?  Smiley

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June 16, 2011, 03:28:12 PM
 #9

$10k worth of gear is quite cheap lol


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June 16, 2011, 07:19:06 PM
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What a perfect illustration of the Tragedy of the Commons.

How?

A new farmer to the commons not adding a couple of cows, but an entire herd of them. In two weeks the commons will be that much harder to utilize for everyone. It is advantageous for each miner to add as many video cards as possible, but in so doing they make the difficulty increase, thus causing diminishing returns on everybody's cards and requiring more cards to keep the same level of income, causing a higher difficulty, etc etc. Unless price moves substantially, in a couple of months the difficulty will be so high that many will be mining at a loss. But that is how the game goes.

With the current difficulty progression, at best I am going to make *maybe* 200 more bitcoins in the next 3 months...and I am pushing 6 GHash/s.
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June 16, 2011, 07:37:15 PM
 #11

Nothing there appeared to be used goods.

In all likely-hood everything there, including the rented office space, was paid for on credit/loan(s). I have a hard time imagining anyone with that kind of disposable income (unless it's some bored rich young man) wasting it on such a speculative venture...

Even at the very lowest end that easily $10k worth of gear there, plus rent, plus electricity.  Everything here (yes, it's just a picture, but knowing what we do of bitcoining so far we can make pretty damn good assumptions) points to this being someone who supposes they can make a business out of this.

I just hope he doesn't have a family, or has a shitload of disposable income and a hell of a lot of otherwise worthless free time to kill.

Why? Seriously. USD 10k worth of goods + some thousands operating costs is about my ticket for "lets try it out". Defined by not hurting me - the amount that makes me mad for wasting some money, but nothing that I remember after half a year.

Not everyone has a disposable income of a mcDonalds worker. There are those of us that would take 15000 USD from a credit card to finance something like that - and then pay out back next month totally from their post tax income. Seriously. It is not that much money. And it could be worth it.
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June 16, 2011, 07:44:06 PM
 #12

Nothing there appeared to be used goods.

In all likely-hood everything there, including the rented office space, was paid for on credit/loan(s). I have a hard time imagining anyone with that kind of disposable income (unless it's some bored rich young man) wasting it on such a speculative venture...

Even at the very lowest end that easily $10k worth of gear there, plus rent, plus electricity.  Everything here (yes, it's just a picture, but knowing what we do of bitcoining so far we can make pretty damn good assumptions) points to this being someone who supposes they can make a business out of this.

I just hope he doesn't have a family, or has a shitload of disposable income and a hell of a lot of otherwise worthless free time to kill.

Why? Seriously. USD 10k worth of goods + some thousands operating costs is about my ticket for "lets try it out". Defined by not hurting me - the amount that makes me mad for wasting some money, but nothing that I remember after half a year.

Not everyone has a disposable income of a mcDonalds worker. There are those of us that would take 15000 USD from a credit card to finance something like that - and then pay out back next month totally from their post tax income. Seriously. It is not that much money. And it could be worth it.

That is again assuming that he got all that stuff at distributor pricing. If he paid retail it will be significantly more.
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June 16, 2011, 07:55:53 PM
 #13

What a perfect illustration of the Tragedy of the Commons.

How?

Hint: narrowly define "Commons".

This is economics, not a Tragedy.  The miners chase the Red Queen -- it's not like they don't know the game's rules beforehand.
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June 16, 2011, 08:02:10 PM
 #14

I think the key for mining is making back your investment as fast as possible while the BTC is still trading at a fair price and the difficultly isn't too high. Once you make your hardware cost back, everything past that (assuming you aren't paying a ton for power) is just profit. And even if the market did crash and bitcoin had an epic fail, you'd still be sitting on a ton of used gear which you'd be able to sell for even more profit.


http://www.minerware.com - Cost effective Mhash/s per Dollar
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June 16, 2011, 08:45:44 PM
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Synaptic, I've been following your posts and threads over the past few days and I've observed that (1) you've got some reasonable things to say, and (2) that you say them with astonishing douchebaggery.  Chill out.
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June 16, 2011, 09:20:21 PM
 #16

And you care that someone might be wasting their money.... why?

Besides, he could likely resell all of that hardware for 75% of what he bought it for in the coming months.  As long as he can regain the 25% lost on depreciation in bitcoins (which should only take a matter of days), he won't be out any money if it all comes crashing down.
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June 16, 2011, 09:26:04 PM
 #17

A new farmer to the commons not adding a couple of cows, but an entire herd of them. In two weeks the commons will be that much harder to utilize for everyone. It is advantageous for each miner to add as many video cards as possible, but in so doing they make the difficulty increase, thus causing diminishing returns on everybody's cards and requiring more cards to keep the same level of income, causing a higher difficulty, etc etc. Unless price moves substantially, in a couple of months the difficulty will be so high that many will be mining at a loss. But that is how the game goes.

That's not a tragedy of the commons, it's called competition. The total bounty of (50 coins + fees)/block does not decrease, it's only spread thinner, so that the less competitive miners die out. If anything, more miners means a more stable network, more users, therefore more fees.

A real tragedy of the commons is this: every guy brings more cows up to the point were there's overgrazing, no time for grass to recover and grow, and the total utility of the grazing land goes down temporarily or permanently, even to zero in the event of desertification. So maximizing the individual utility has diminished or destroyed the global utility of the shared resource.
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June 17, 2011, 12:16:44 AM
 #18

What a perfect illustration of the Tragedy of the Commons.

How?

A new farmer to the commons not adding a couple of cows, but an entire herd of them. In two weeks the commons will be that much harder to utilize for everyone. It is advantageous for each miner to add as many video cards as possible, but in so doing they make the difficulty increase, thus causing diminishing returns on everybody's cards and requiring more cards to keep the same level of income, causing a higher difficulty, etc etc. Unless price moves substantially, in a couple of months the difficulty will be so high that many will be mining at a loss. But that is how the game goes.

With the current difficulty progression, at best I am going to make *maybe* 200 more bitcoins in the next 3 months...and I am pushing 6 GHash/s.

The reason it's not a tragedy of the commons is because it's good for Bitcoin.  The more network hashing power Bitcoin has, the more secure the network is, and thus the more viable and safe Bitcoin is.  It's only a "tragedy" if you look at it from the miners' perspective.  If you actually care about all of the other aspects to Bitcoin besides making a quick buck off mining, then the network growing in size is a great thing.
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June 17, 2011, 12:28:25 AM
 #19

Synaptic, I've been following your posts and threads over the past few days and I've observed that (1) you've got some reasonable things to say, and (2) that you say them with astonishing douchebaggery.  Chill out.

+1

I still have to go write up a response to his "logical" discussion of bitcoin.

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datguywhowanders
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June 17, 2011, 12:29:20 AM
 #20

A new farmer to the commons not adding a couple of cows, but an entire herd of them. In two weeks the commons will be that much harder to utilize for everyone. It is advantageous for each miner to add as many video cards as possible, but in so doing they make the difficulty increase, thus causing diminishing returns on everybody's cards and requiring more cards to keep the same level of income, causing a higher difficulty, etc etc. Unless price moves substantially, in a couple of months the difficulty will be so high that many will be mining at a loss. But that is how the game goes.

That's not a tragedy of the commons, it's called competition. The total bounty of (50 coins + fees)/block does not decrease, it's only spread thinner, so that the less competitive miners die out. If anything, more miners means a more stable network, more users, therefore more fees.

A real tragedy of the commons is this: every guy brings more cows up to the point were there's overgrazing, no time for grass to recover and grow, and the total utility of the grazing land goes down temporarily or permanently, even to zero in the event of desertification. So maximizing the individual utility has diminished or destroyed the global utility of the shared resource.

Thanks for giving the textbook definition there.

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