Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[jonoiv]

As there is a good chance many of the asics are already run at a loss.  

This is statement is unfounded at all. Electricity could be very cheap in some part of China

Maybe it's real but I don't buy it. Especailly as if "secret" in China, it would send out a massive heat signature and the authorities would think they are growing cannabis in those buildings.  

So what? The police will just find a computer farm instead of a cannabis farm.

http://translate.google.co.uk/translate?hl=en&sl=zh-CN&u=http://www.360doc.com/relevant/212102353_more.shtml&prev=/search%3Fq%3D%25E4%25B8%25AD%25E5%259C%258B%25E9%259B%25BB%25E5%258A%259B%25E6%2588%2590%25E6%259C%25AC%26client%3Dfirefox-a%26hs%3Dzmj%26rls%3Dorg.mozilla:en-US:official%26channel%3Drcs

1.00 USD    =    6.14322 CNY

1 CNY = 0.16 cent

very low cost electricy in china is about 0.5 CNY (8 cent per KW/h)

even if the price of EQ is $2000 per TH and it the most effienet machine @ 0.7 watts per GH then it's still run at a loss and at current rates would never break even.  Even if the EQ was free, and it's the most efficient Asic available it would still only be making $12 a month by December (at current difficulty increase).   Similar conditions (only more extreme) than October last year.  BTC is very undervalued.


As for the authorities, finding such an operation I suspect the tax man might be interested, I doubt they would just walk away after finding a 1/4 of a billion $ setup.  

If that's true no one in China (and most parts of the world, actually) should be mining, as they could get more bitcoin by simply buying from the market.

Why?

I was mining when it wasn't profitable last year.  then the big pump came.  But most asics are not currently profitable at current prices.  these are facts.   

[Moria843]

As there is a good chance many of the asics are already run at a loss.  

This is statement is unfounded at all. Electricity could be very cheap in some part of China

Maybe it's real but I don't buy it. Especailly as if "secret" in China, it would send out a massive heat signature and the authorities would think they are growing cannabis in those buildings.  

So what? The police will just find a computer farm instead of a cannabis farm.

http://translate.google.co.uk/translate?hl=en&sl=zh-CN&u=http://www.360doc.com/relevant/212102353_more.shtml&prev=/search%3Fq%3D%25E4%25B8%25AD%25E5%259C%258B%25E9%259B%25BB%25E5%258A%259B%25E6%2588%2590%25E6%259C%25AC%26client%3Dfirefox-a%26hs%3Dzmj%26rls%3Dorg.mozilla:en-US:official%26channel%3Drcs

1.00 USD    =    6.14322 CNY

1 CNY = 0.16 cent

very low cost electricy in china is about 0.5 CNY (8 cent per KW/h)

even if the price of EQ is $2000 per TH and it the most effienet machine @ 0.7 watts per GH then it's still run at a loss and at current rates would never break even.  Even if the EQ was free, and it's the most efficient Asic available it would still only be making $12 a month by December (at current difficulty increase).   Similar conditions (only more extreme) than October last year.  BTC is very undervalued.


As for the authorities, finding such an operation I suspect the tax man might be interested, I doubt they would just walk away after finding a 1/4 of a billion $ setup.  

If that's true no one in China (and most parts of the world, actually) should be mining, as they could get more bitcoin by simply buying from the market.

Why?

I was mining when it wasn't profitable last year.  then the big pump came.  But most asics are not currently profitable at current prices.  these are facts.   

I'm still mining with 8 overclocked S1s at 1.6 Th/s. Currently making about 1BTC/month on about $330/month electricity. So I'm paying $330/BTC since these old miners are all paid off. Until electricity cost is greater than value of BTC mined, I'll keep on mining. You can still make money with equipment that has ROI'd. Not sure if I want to upgrade or buy more though???

[dropt]

Why?

I was mining when it wasn't profitable last year.  then the big pump came.  But most asics are not currently profitable at current prices.  these are facts.   

Because algebra and logic.  In example:

1) It costs you $110 in electricity to mine a single Bitcoin.

2) It costs you $100 to buy a single Bitcoin on the exchange.

If you spend $100 in electricity, you get ~0.91BTC vs. 1 BTC bought off the exchange for that same $100.

If you spend $110 in electricity, you get 1 BTC vs. 1.1BTC if bought off the exchange for $110.

In neither scenario is it "smart" or make sense to mine at a loss when you could purchase more coin off the exchange than you could by mining.  The addage of "adding support to the network" as a justifier for mining at a loss is a concept of the past.

[JayJuanGee]

Patience, just a few more days. Bulls have to exhaust ammo first.

that's the irony of your comment... The bulls have near endless amo, while the bears have a limited supply, unless they are engaging in shenanigans or unapproved (or unknown) fractional reserve type behaviors.

[adamstgBit]

I'm still mining with 8 overclocked S1s at 1.6 Th/s. Currently making about 1BTC/month on about $330/month electricity. So I'm paying $330/BTC since these old miners are all paid off. Until electricity cost is greater than value of BTC mined, I'll keep on mining. You can still make money with equipment that has ROI'd. Not sure if I want to upgrade or buy more though???

1btc a month every month without upgrading? really?

[JayJuanGee]

PS. Another thing that election system designers often fail to notice is that the mere suspicion that votes could be leaked is enough to coerce voters.  For example: a mafia boss spreads the rumor that he has an agent inside the system who can obtain that information, and anyone in his domain who did not vote for XYZ may get a surprise visitor carrying a baseball bat.  Even of the rumor is totally false, a voter who thinks that it could be true will probably vote XYZ, just in case.  To prevent such things, the system must be such that every voter can dismiss such rumors and trust that his vote will not be revealed.  Any system that is built on top of a cryptocoin protocol is already way too complicated for that.

Yet another often overlooked fact is that open source is necessary, but not sufficient, to ensure that the system has no exploitable bugs or backdoors.  The basic difficulty there is that the binary that is actually running in the equipment may not correspond to the published and verified source; and there is no secure way to check for that risk in practice.  (That is also a fundamental problem of the Trezor and other hardware wallets, by the way.  It seems that the Trezor fans too have trouble grasping this detail.)

Frequently, Jorge, you make a lot of sense, if you stick to non-crypto topics.   

[Moria843]

I'm still mining with 8 overclocked S1s at 1.6 Th/s. Currently making about 1BTC/month on about $330/month electricity. So I'm paying $330/BTC since these old miners are all paid off. Until electricity cost is greater than value of BTC mined, I'll keep on mining. You can still make money with equipment that has ROI'd. Not sure if I want to upgrade or buy more though???

1btc a month every month without upgrading? really?

I never said every month. I said that's what I'm currently making. Used to make a lot more of course; and realize that I will make a lot less in the future. My statement "Until electricity cost is greater than value of BTC mined, I'll keep on mining" still makes sense.

[Davyd05]

As there is a good chance many of the asics are already run at a loss.  

This is statement is unfounded at all. Electricity could be very cheap in some part of China

Maybe it's real but I don't buy it. Especailly as if "secret" in China, it would send out a massive heat signature and the authorities would think they are growing cannabis in those buildings.  

So what? The police will just find a computer farm instead of a cannabis farm.

http://translate.google.co.uk/translate?hl=en&sl=zh-CN&u=http://www.360doc.com/relevant/212102353_more.shtml&prev=/search%3Fq%3D%25E4%25B8%25AD%25E5%259C%258B%25E9%259B%25BB%25E5%258A%259B%25E6%2588%2590%25E6%259C%25AC%26client%3Dfirefox-a%26hs%3Dzmj%26rls%3Dorg.mozilla:en-US:official%26channel%3Drcs

1.00 USD    =    6.14322 CNY

1 CNY = 0.16 cent

very low cost electricy in china is about 0.5 CNY (8 cent per KW/h)

even if the price of EQ is $2000 per TH and it the most effienet machine @ 0.7 watts per GH then it's still run at a loss and at current rates would never break even.  Even if the EQ was free, and it's the most efficient Asic available it would still only be making $12 a month by December (at current difficulty increase).   Similar conditions (only more extreme) than October last year.  BTC is very undervalued.


As for the authorities, finding such an operation I suspect the tax man might be interested, I doubt they would just walk away after finding a 1/4 of a billion $ setup.  

If that's true no one in China (and most parts of the world, actually) should be mining, as they could get more bitcoin by simply buying from the market.

Why?

I was mining when it wasn't profitable last year.  then the big pump came.  But most asics are not currently profitable at current prices.  these are facts.  

I would only guess, that if they built up slowly and paid off equipment asap constantly they could be ahead of the curve. They would also have to have access to massive amounts of asic machinery which I can believe. I also believe they would easily pay less when ordering in bulk, as they would be literally kick starting asic business or allowing a new production line to start up with orders of their size. If you imagine 250m in asic miner @ 2k, that a 125k miners... no way you pay the same 2k a guy buying 1 or maybe 5. SO 5% of the current hash rate is 10,032,203.55 ghs / 125k miner = an average of 80ghs per machine and paying 2k a machine, wait till they're only running 1ths machinery only.

[dropt]

wtv you do DO NOT buy cloud hashing contacts 

QFT.

[JayJuanGee]

Does anybody also have a bad feeling about this? The Chinese will continue dumping for years...
At least we know now who the wall guys are.

http://www.thecoinsman.com/2014/08/bitcoin/inside-one-worlds-largest-bitcoin-mines/

3600 coins are 3600 coins, and it doesn't matter whether they are mined on some guys phone or a wall of silicon a mile high.  But the guy who has to buy the mountain of silicon is a lot less likely to sell them for peanuts.

Even one location like this is NOT going to mine all of the coins... maybe 30% at best, no?

It's possibly 18% IE the "unknown" mining operation.   However some could be minded via a pool, to hide the true hash power.  Or it could be discus fish.


https://blockchain.info/pools

O.k. From our understanding, the article was referring to a bitcoin mining location that was NOT even open yet; however, the bitcoin mining location was anticipated to contain four warehouses full of mining equipment and to be "one of" the largest in China. 

 I know that this is the speculation thread and all, but really,  if the location is one of the largest, but there are more similar sized ones, we have no real knowledge of how much of the bitcoin mining it currently takes nor how much mining power it will take 6 months from now or 1 year from now.  They seemed to indicate that each warehouse took about 30 days to put into place, but in the end, I remained unclear about whether any of the mining locations, at that spot were currently operational. 

Even when it is all open, could such a location mine more than 30 % of the bitcoins, unless it is conglomerated with other locations?

Well the article states that the temperature is reasonable at  25 "degrees (77 °F)."  That seems to suggest it's running.   and certain clues as to the GH/s of the entire setup can be made from the info given.   The simplest being $1,000,000 a month in electric.   If you say the best asics are at 0.7 Watts per GH.  and the older Asics are about 3 Watts per GH,  then you could assume an average of 1.5 Watts per GHs.  all you need then is the pric of electricity in China and to have a ball park figure.

Another way would be to say from the picture and the mix of machines, you could estimate maybe approx 3TH per square meter  @ 3000 would be very roughly 9PH.  So 4 warehouses would be 36PH / 20% of total hash (close to the 18%)

It's very unlikely that the vast majority of the asics are not already running.  As there is a good chance many of the asics are already run at a loss.  turning them on at the same time makes no sense.  Also there is a good chance some of the photos are shopped.  ". I was asked not to post photos of the construction."   additionally the writer says "150 meters in length, by perhaps 20 meters wide" of the photos look like the buildings are about 7 x 21 meters making 150 square meters.  

On further reading I say the article is just BS.  If genuine, and each "3000" square meter warehouse has inside, $60,000,000 of EQ.  so in total it's about $250,000,000 setup currently run at a loss.  

Maybe it's real but I don't buy it. Especailly as if "secret" in China, it would send out a massive heat signature and the authorities would think they are growing cannabis in those buildings.  

you make a lot of assumptions that could go either way... but I appreciate your discussion and even suggestion that there maybe various untruths in the article. 

By the way, I doubt that the Chinese government would need to rely upon any kind of heat signature to raise suspicion about activities in the buildings - b/c the mere electricity draw of such an operation would be quite notable in and of itself and likely NOT outside of government's area of knowables.

[adamstgBit]

the walls are not fake they are in real danger of being eaten at any moment


its not looking good, but bullish is the market, and so price hardly moves despite intense pressure.

[NotLambchop]

...
Well, the whole point of blockchain-based technology is precisely that it takes trust out of the equation completely...

He brought up several interesting points which you might have missed.  I'll try to put them in different wrappers, hopefully not losing the meaning in the process.

1.  Assume a magical black box which, when the "press" button is pressed, prints out the *exact* result of an election.  Also assume that it is the definitive Black Box--while the result is [by definition] invariably correct, no one knows how it works.  It's a hypothetical, accept everything above as a given.
What do you think the odds of such a thing becoming the accepted method of national elections?  

2.  People do not trust technology--they don't understand it.  They do not understand most of modern technology, including simple stuff like ATMs, but they do not need to trust it--they trust the agencies behind it (banks, in case of ATMs).  This may be absurd, but that's how it is.  There is no similar agency backing the blockchain, and Joe Sixpack has a natural distrust of eggheads.

3.  Recounts.  There is little to suggest that a recount in conventional elections would produce results more accurate than the initial tallying.  But it makes people feel better.  Those tangible slips of paper, as ridiculous and flawed as they are, are used even when a purely digital apparatus recording choices directly from a keyboard to electronic storage (like a hugely-redundant RAID or something) would be cheaper, more convenient, and [provably] more reliable.  Go figure, but that's how it is.

Or, to summarize all the points: Let's not try to improve living conditions through rational insight, because the irrational fears of what is possibly a majority of the population would be offended by the improvements at first.

(Not attacking you, NotLambchop. Just the message you relay )

I guess I'm not being clear (and don't worry attacking me, my best friends are all serious pricks.  But fun.).  The reason I repeated JorgeStolfi's points is one of his posts made me realise that I wasn't seeing all aspect of the election problem, or rather that other people were seeing it differently from me.  I was looking at it as a techy, "Is it possible to create a foolproof, incorruptible and practical voting system based on the blockchain."  JorgeStolfi pointed out that the technical aspect was not the gist of it.  From his perspective, the technical side was not even the relevant part.  According to him (or, rather, how I understood him), the most important aspect of a voting system was not its accuracy or even resistance to tampering, but *how acceptable and irrefutable it is to the losing party*.

I haven't thought about it that way, but, after reading his posts, I was able to see it in a totally new light.  It hit me that the problem I was trying to solve wasn't even necessarily the correct one.  One of those "aha" moments.

I'm a sucker for stuff like that.  I may not agree with his notion that it's a case of rigging a turbojet to pop popcorn, but I like "getting" how other people see stuff.
I'm not being too clear, but hopefully you get my drift.  It's like spending endless time working out the minutia of a car's suspension geometry, and finding out that the only thing people care about has nothing to do with handling--they just want it in powder blue.

*And I get that this reads like some peaking acidhead's ramblings about his latest revelation.

[JayJuanGee]

As there is a good chance many of the asics are already run at a loss.  

This is statement is unfounded at all. Electricity could be very cheap in some part of China

Maybe it's real but I don't buy it. Especailly as if "secret" in China, it would send out a massive heat signature and the authorities would think they are growing cannabis in those buildings.  

So what? The police will just find a computer farm instead of a cannabis farm.

http://translate.google.co.uk/translate?hl=en&sl=zh-CN&u=http://www.360doc.com/relevant/212102353_more.shtml&prev=/search%3Fq%3D%25E4%25B8%25AD%25E5%259C%258B%25E9%259B%25BB%25E5%258A%259B%25E6%2588%2590%25E6%259C%25AC%26client%3Dfirefox-a%26hs%3Dzmj%26rls%3Dorg.mozilla:en-US:official%26channel%3Drcs

1.00 USD    =    6.14322 CNY

1 CNY = 0.16 cent

very low cost electricy in china is about 0.5 CNY (8 cent per KW/h)

even if the price of EQ is $2000 per TH and it the most effienet machine @ 0.7 watts per GH then it's still run at a loss and at current rates would never break even.  Even if the EQ was free, and it's the most efficient Asic available it would still only be making $12 a month by December (at current difficulty increase).   Similar conditions (only more extreme) than October last year.  BTC is very undervalued.


As for the authorities, finding such an operation I suspect the tax man might be interested, I doubt they would just walk away after finding a 1/4 of a billion $ setup.  

Didn't you used to be a bear or at least frequently making bearish type comments?    Have you converted, or am I getting you mixed up with some other poster?

[windjc]

There may be some truth to what you are saying, but I doubt that potential bitcoin investors are giving as much weight to MTGOX factors as you are making out of the situation.  My understanding is that investment and adoption has considered to go up in the BTC space at a considerable rate, in spite of the GOX collapse in February and some of the later news of its various fallouts.  Accordingly adoption and investment and liquidation opportunities are going to help to drive the next upward price wave.. whether that occurs this week, in the next couple of weeks, in the next couple of months or even a year down the road.  

By the way, I doubt it is going to take another year before we find a new ATH.. that will likely soar BTC prices into at least the $3-5K range.. and possibly higher, if such growth is delayed further.  In that regard, I am glad to be amongst early adopters (not as early as some but NOT as late as others, too).  

I respect your doubts and guesses, because it's a speculation forum afterall. But, if you are an experienced investor, then these "little" things are The things that you have to consider when investing. To me, the market seems weak and it's perfectly logical to me why. Most of the people here like to think that the weak market is all one conspiracy, and there are always whales around the corner who will throw millions at BTC any moment now.. any moment now.. it will surely happen any moment now. To me, things are more simple then that. Currently it's just very hard to convince someone new to buy bitcoins without looking like a snake oil salesman.

Serious question: under what minimum circumstances in the future would you concede that bitcoin is here to stay and will have at least a role to play in the earths global financial role moving forward?

For instance at what market cap would you finally give respect to bitcoin? Under what kind of other conditions.

You write it off as gambling and speculation now. When would you concede it to be much more than that?

And I'm not asking for your utopian hope, I'm asking for your truth assuming bitcoin continues on it's current trajectory of uses and potential uses.

[adamstgBit]

1/2 a million dollars required to move bitcoin a fraction of a percent in either direction, such liquidity, very intense, wow

[Richy_T]

As there is a good chance many of the asics are already run at a loss.  

This is statement is unfounded at all. Electricity could be very cheap in some part of China

Maybe it's real but I don't buy it. Especailly as if "secret" in China, it would send out a massive heat signature and the authorities would think they are growing cannabis in those buildings.  

So what? The police will just find a computer farm instead of a cannabis farm.

Which may be why asics can be run at a loss

[ChartBuddy]

Explanation

[JayJuanGee]

The coinsman article says the operation currently accounts for "perhaps 5 % of the total network". Taking that claim at face value, that's 180 BTC per day, or 5400 a month, 2,700,000 USD at current rates. Minus electricity, 1,700,000 USD is left to cover other costs and startup expenses if the price remains stable (ha!). Is that reasonable? I don't know.

GOOD Eye!!!!  That sounds pretty reasonable and really the remaining $1.7 million per month seems to be an amount to work with in terms of other operational costs.

I doubt that they are cashing out their BTC at these prices, but we do NOT really have any evidence regarding what large scale miners are doing - except some hearsay reports that they are cashing out small percentages of the BTC (less than 25% of their holdings)... yet the cash out rate is likely going to fluctuate depending on a variety of factors, including long term vision of future price and ability of miners to pay expenses through other means in order to weather some of the low price period until maybe $3k coins come about or at least maybe to cash some of them out at various price points as the price is rising- for example: $600, $700, $800 etc.. ?  And, probably they have various formulas in place to help to predetermine how many to cash out in what time periods and depending upon whether the price is rising fast or slow or if the price is dropping.

[Hunyadi]

1/2 a million dollars required to move bitcoin a fraction of a percent in either direction, such liquidity, very intense, wow

IMO it's good that whales are back in business.

[NotLambchop]

^