Zman0101 (OP)
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June 26, 2011, 03:48:25 PM |
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What is to become of mining ? I realized the difficulty is going up but what will become of Bitcoin when mining is no longer profitable ? Can the difficulty go down if we all stop mining and block 2016 isn't reached in the proper time frame...? or is it possible that we are going to have to make changes to the pool system. What do you guys think is to become of Bitcoin and mining ?
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There are several different types of Bitcoin clients. The most secure are full nodes like Bitcoin Core, but full nodes are more resource-heavy, and they must do a lengthy initial syncing process. As a result, lightweight clients with somewhat less security are commonly used.
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CNMOH
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June 26, 2011, 03:52:37 PM |
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If mining dies, so does bitcoin. Mining will not die. If mining is no longer profitable, people will stop mining, and the total hashing power of the network will drop. If that happens, the difficulty will also drop at the next reset, making mining profitable again.
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1bitc0inplz
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June 26, 2011, 03:58:08 PM |
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Difficulty can go up and down. The only reason difficulty has been going up is because we are solving blocks (on average) faster than once every 10 minutes. If the network slows down, either due to a difficulty rise or a lose of computing power, then difficulty may decrease.
Mining will never end for so long as Bitcoin is around. We all have to remember, the purpose of mining is to solve blocks or to get block rewards, but to rather facility Bitcoin transactions. If mining stops nobody will be able to transfer money to anybody else. The whole system is dependent upon continued mining.
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Forp
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June 26, 2011, 04:08:10 PM |
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If that happens, the difficulty will also drop at the next reset, making mining profitable again. That is the line of reasoning, my brain also uses all the time.  That's exactly the reason why I am not sure whether it is true.  I am asking myself whether there are additional reasons or motivations for mining beyond profit from the 50 BTC mining bounty. 1) Staying part of the community, staying current in know how. 2) Heating your flat.  3) Burn in of your equipment.  4) Future benefits from the transaction fees. 5) Future benefits we all do not know about yet and which we will understand upon release of bitcoin version 0.5cr (cr denoting conspiracy release) 6) We are not mining for bitcoin, we are part of a big social experiment / ponzi scheme / clever attempt of the nsa to break sha256 / clever attempt of wikileaks to break the encryption of yet another video (add your favorite conspiracy theory here).  7) I have a very good reason and I am not going to tell in public  Just following the crowd. Everybody's mining so it can't be a bad move to do so.  Well, I do not know. But I am interested in other theories. (to be honest: I want to understand it for myself, why I am mining) |
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Zman0101 (OP)
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June 26, 2011, 06:09:37 PM |
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Yeah i agree. I mean with out miners the system cant function. But id imagine the difficulty will have to go down... The bitcoin system cant expect miners to just mine for the hell of it. We would have to get some sort of perk. Maybe if the difficulty gets to high... not only will miners still be rewarded for mining for coins but get some sort of kick back on the transactions we process as well. Just a thought.
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Chucksta
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June 26, 2011, 06:11:36 PM |
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If you don't want your mining operation to fizzle out any time soon, then be sure to put in higher bid/ask prices. If the price per BTC is high enough to allow mining with profit, then mining won't die (for the peeps after profit). Of course the crazies and the geeks will carry on mining, no matter what |
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Oldminer
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June 26, 2011, 06:19:46 PM |
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If you don't want your mining operation to fizzle out any time soon, then be sure to put in higher bid/ask prices. If the price per BTC is high enough to allow mining with profit, then mining won't die (for the peeps after profit).
This is true. Mining profitability is dependent on Bitcoin price and I think as far as the future outlook goes for Bitcoin it will continue going up for quite some time. Some are even forecasting the value of Bitcoin to be > $1000 within a year or 2 from now. |
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Grouver (BtcBalance)
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June 26, 2011, 06:36:46 PM |
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If the price goes up for each bitcoin, this will make mining profitable.
If the difficulty goes down cause some people stop mining, mining will be profitable.
One of these two needs to happen to keep mining worth mining.
To bad miners can not really determine price.
Price is determined by demand or the so called market growth of the bitcoin .
So if the demand for Bitcoins does not rise.. but the total hash power does.
Then people will stop mining. And at a X point the difficulty drops slowly and people will start mining again.
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Grouver (BtcBalance)
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June 26, 2011, 06:38:43 PM |
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Some are even forecasting the value of Bitcoin to be > $1000 within a year or 2 from now.
Forecasting cannot be done with stuff like this. They all base that on how fast it growed untill now. Like some guy here on the forums said. Economics is a Social engine... and you can never predict that well. |
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Mousepotato
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June 26, 2011, 11:11:05 PM |
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Current difficulty is absolutely brutal. Look at the biggest pool around (that I know of), Deepbit. Even their avg time to crack a block has doubled to nearly 30 mins since last level. I'm guessing we're going to see a difficulty decrease next time around.
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Mousepotato
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IlbiStarz
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June 26, 2011, 11:28:15 PM |
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Current difficulty is absolutely brutal. Look at the biggest pool around (that I know of), Deepbit. Even their avg time to crack a block has doubled to nearly 30 mins since last level. I'm guessing we're going to see a difficulty decrease next time around.
Lol no way, I bet it'll still rise by a few hundred thousand. We are solving blocks slower though, Bitcoin charts says that we are at 6.01 blocks per hour, which is the closest I've seen to the supposed 10 minutes per block. |
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bcpokey
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June 26, 2011, 11:34:29 PM |
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Current difficulty is absolutely brutal. Look at the biggest pool around (that I know of), Deepbit. Even their avg time to crack a block has doubled to nearly 30 mins since last level. I'm guessing we're going to see a difficulty decrease next time around.
I don't foresee a difficulty decrease, the number of new miners that came online just the last difficulty was huge, and they'll be struggling to see their new huge money pits make them some return. The smartest among them might be considering hashing it out for 2 difficulties then returning the hardware from whence it came, giving them some return for their work, or at least covering restocking fees. And let's be frank, even at this difficulty mining yields roughly 7x back the cost of electricity in "free money". The impatient amongst us will certainly drop out, but the large portion of business minded individuals who have been ramming the difficulty up will still see the coin to be made. |
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Mousepotato
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June 26, 2011, 11:48:07 PM |
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I dunno if I trust the numbers on BitcoinCharts (other than the current exchange rates). They're off on the hash power of Deepbit by nearly 1TH.
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Mousepotato
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Gameover
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NEURAL.CLUB - FIRST SOCIAL ARTIFICIAL INTELLIGENCE
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June 27, 2011, 12:49:12 AM |
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Yeah its pretty much dead. The only reason it was booming was massive speculation and major news reports. After the bubble was popped with serious theft and hacking of mtgox people lost interest seeing how volatile it is. With the recent difficulty increase you can see just how many have lost interest since the next difficulty is expected to be a 3% increase, no where near previous increases. Added to that people like me, I mined on my otherwise idle 6950 for the hell of it, now that profit is down to a few dollars per day its not really worth the hassle, thanks for the $ speculators, moving on... As less and less people use bitcoin the value of it will fall since it has no inherent value... The good news for the bitcoin community with the boom over and all the people who wasted their hard earned money on dedicated rigs hopes and dreams swirling in the toilet, the price may finally stabilize in the single digits, thus promoting actually using bitcoin for goods since vendors can depend on a price.
immediate:
0 or negative growth in mining due to difficulty
decline in value to $1-$5 due to speculators selling out
over months:
stabilization of value
increase in use of bitcoin in real goods
slow growth in value and usage
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NEURAL.CLUB - FIRST SOCIAL ARTIFICIAL INTELLIGENCE
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bcpokey
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June 27, 2011, 12:57:14 AM |
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I dunno if I trust the numbers on BitcoinCharts (other than the current exchange rates). They're off on the hash power of Deepbit by nearly 1TH.
 The numbers seem to jibe decently. @Gameover, how is a slight increase a sign of something being dead? I remember total network power being 2THash not that much more than a month ago, a > 5x increase stabilizing is hardly a death knell. I personally wouldn't mind a retraction in mining power and/or price, but the inertia doesn't seem to be faltering yet. We'll see how bitcoin weathers its current storm. Namecoin seems to be an interesting case study in the possible future of bitcoin, as it saw a huge huge boom due to its profitability, then when difficulty increased to unprofitable levels it saw a sharp retraction in both price and mining power, but it is still alive and kicking, and in about a month I'm guessing you'll see a huge flood into it again, assuming bitcoin doesn't die in that time. So we'll see. |
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Mousepotato
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June 27, 2011, 01:08:16 AM |
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Yeah its pretty much dead. The only reason it was booming was massive speculation and major news reports. After the bubble was popped with serious theft and hacking of mtgox people lost interest seeing how volatile it is. With the recent difficulty increase you can see just how many have lost interest since the next difficulty is expected to be a 3% increase, no where near previous increases. Added to that people like me, I mined on my otherwise idle 6950 for the hell of it, now that profit is down to a few dollars per day its not really worth the hassle, thanks for the $ speculators, moving on... As less and less people use bitcoin the value of it will fall since it has no inherent value... The good news for the bitcoin community with the boom over and all the people who wasted their hard earned money on dedicated rigs hopes and dreams swirling in the toilet, the price may finally stabilize in the single digits, thus promoting actually using bitcoin for goods since vendors can depend on a price.
immediate:
0 or negative growth in mining due to difficulty
decline in value to $1-$5 due to speculators selling out
over months:
stabilization of value
increase in use of bitcoin in real goods
slow growth in value and usage
Why don't we build a camp fire? Sing a few songs? |
Mousepotato
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Departure
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June 27, 2011, 06:29:49 AM |
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Gameover is spot on... bcpokey also has a very valid point.. either way the bitcoin value decreases before it increases again.... so fingers crossed bitcoin lives long enough for it to increase..
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Yeti
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June 27, 2011, 06:41:49 AM |
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Yes, that is the plan. Fees are always included in the miner's payout. Furthermore, the miner who found a block decides which transactions to include. Right now we have only a few tx per block, but in the future it could very well be the case that you need to pay a certain amount just to get your tx cleared, because otherwise they would not do it (and there are likely others that pay fees).
The bounty is there to get things started and will decrease when there is enough traction. At block 210,000 the bounty will be 25 BTC. I expect a jump in fees at that point.
Whether mining will ever be profitable again depends mostly on the BTC/USD exchange rate. There was a time in, I think, March when mining was not profitable because you'd only get 1$ per BTC. Then prices sky-rocketed and new people (including me) started coming in. That might happen again as well.
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grndzero
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June 27, 2011, 07:35:53 AM |
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Yeah i agree. I mean with out miners the system cant function. But id imagine the difficulty will have to go down... The bitcoin system cant expect miners to just mine for the hell of it. We would have to get some sort of perk. Maybe if the difficulty gets to high... not only will miners still be rewarded for mining for coins but get some sort of kick back on the transactions we process as well. Just a thought.
Whoever solves the block gets the transaction fees already. That is the incentive to keep the network going after all the coins have been mined. |
Ubuntu Desktop x64 - HD5850 Reference - 400Mh/s w/ cgminer @ 975C/325M/1.175V - 11.6/2.1 SDK
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Meman
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June 27, 2011, 10:27:54 AM |
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People with the lowest or no power costs will keep on mining and buying new rigs. All others will stop mining and sell their rigs, because it's no more profitable for them. This only can be avoided if there will be a btc price explosion, causing even more people to mine, resulting in a btc price drop and a massive increase in difficulty again. There will be no price explosion, if the low power cost miners can mine enough btc's to meet the demand.
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