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Author Topic: Bitcoin securities  (Read 2057 times)
Online24o0n
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July 08, 2013, 02:01:50 PM
 #21

litecoinglobal.com  ciphermine shares for LTC  Google news search it.

"Never let the future disturb you. You will meet it, if you have to, with the same weapons of reason which today arm you against the present"
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July 08, 2013, 02:27:35 PM
 #22

Actually the projected time for all coins to be mined out is approximately 130(ish) years.
The official time is that the coins should be all mined out around 2140, but as the hashrate for a majority of time will be higher than the avg rate the previous 14 days or the difficulty will be raising most of the time, therefore there will be a slight overproduction of coins. 2016 blocks will be produced faster than every 14 days on avg so it will probably take quite a bit less than 27 years to produce all the remaining coins, so maby sometime between 2035-2037 or so there will be no more coins to mine.
That will not happen. It might be maybe 1-3 years before, with the current difficulty adjustment it would not be practical for all the coins to be mined 8x faster?

I think you're both right, although TF is right for better reasons.

The block reward will almost certainly halve beneath 1 satoshi / block (this being the definition of the end of the block reward) before the standard projected dates. However, we are still very early in the ASIC era and are seeing the sorts of exponential changes in network hashrate / difficulty that are absolutely impossible to maintain. The hashrate will continue to grow parabolically only until the network is saturated with ASICs - at which point the gains will become incremental as we just add new hardware of the same type onto the network. Generational upgrades to the ASIC infrastructure will provide a sort of leg-up to the hash-rate only occasionally, and with diminishing returns.

Jumping from 128 to 65nm, for example, will improve GH/J but probably wouldn't improve GH/btc on the initial purchase point (at least) - and we're absolutely nowhere near knowing the life expectancy of these chips, but a cursory glance at relevant journal articles such as this one would seem to indicate that sub-130nm chips have a much shorter life expectancy than what people might be thinking. This would be a much better business case for hardware sales than mining, to be sure.

Growth in network hash-rate is going to get off the parabolic rocketship at some point and flatten out into slower growth and incremental improvements. Once we reach this point we will stop seeing 6-8minute average time to block for a difficulty period and start getting closer to 8-10 minutes, I expect. This may not happen for quite a while, of course, at least from the perspective of most in this community.

This is all somewhat irrelevant, however, which is why thy was still somewhat correct.

While the block reward will last for quite a while yet, the real question is how long will it remain meaningful.

75% of all Bitcoin that will ever exist will exist at the time of the second (next) halving. 87.5% of all Bitcoin that will ever exist will exist at the time of the third halving. This process will only continue, and we will have issued >99% of all Bitcoin that will ever exist at the time of the 6th halving sometime before 2033.

What some have observed is that, regardless of this, all coins that actually are in circulation will continue to cycle through the blockchain forever - with some small % of them being paid to miner's as fees. Many have previously noted that the fees will need to out-weigh the block reward itself eventually, however most people tend to talk about this as 'what happens after the end of the block reward'. This will actually need to happen much sooner than that.

At the moment the average fee per block is, interestingly, almost exactly 0.1 BTC - I get this by dividing the trailing 24-hour fees (19.24 BTC) by the number of blocks (192) on blockchain.info. At this rate, even with no change in fees the block reward would drop below the current fee at the 9th halving sometime before 2044.



I guess my only real point is that the minting of new coins is mostly irrelevant to the long-term prospects of miners.

note: thy added to the discussion since I started writing this but I can't really be bothered to edit.

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July 08, 2013, 03:00:46 PM
 #23

so maby sometime between 2035-2037 or so there will be no more coins to mine.
Transaction fees.

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July 08, 2013, 09:34:40 PM
 #24

For the OP:

1 mhz should only pay back about .15-.2 USD considering difficulty increase.

This makes VIRTUALMINE by TAT about double what it's worth.

I don't know why people are paying 88% the same price for the same thing for BFMINES by fuku when it doesn't pay divs until Metabank ships?Huh
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July 08, 2013, 11:37:01 PM
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I don't know why people are paying 88% the same price for the same thing for BFMINES by fuku when it doesn't pay divs until Metabank ships?Huh

Once people realize it's going to be a while before BF receives its miners, the IPO buyers are going to start dumping the shares for a loss. It's already starting to slip a bit under the IPO price and that's only going to continue.

People around here have a very short attention span
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July 09, 2013, 02:33:21 AM
 #26

I don't know why people are paying 88% the same price for the same thing for BFMINES by fuku when it doesn't pay divs until Metabank ships?Huh

One reason is that the bonus dividends in BFMines represents 15-20% higher dividends for the first six months. If you think Metabank delivers above specs, this bonus is even higher. All ASICs delivered seem to trend towards a higher spec to account for any performance issues. For example the AM blades and sticks hash at 30% over spec, and if the Metabank miner does the same, the bonus will be around 50% more than advertised.

Another reason can be that BFMines minues the bonus trades at less than TAT.VM minus the dividends expected until BFMines starts. Depending on how you predict difficulty change, TAT.VM is expected to mine 0.001178 until BFMines comes online. If this estimate is correct (and I've shown why this isn't relevant), the bonus for BFMines will at a minimum be 0.000535. The real cost of TAT.VM compared to BFMines is thus 0.001178 lower and BFMines is 0.000535 lower. That means that at this moment, BFMines is cheaper.

A third reason is that, unlike TAT.VM and DMS.Mining, for example, BFMines does actual mining, meaning it also produces transaction fees. Right now, transaction fees are around 1.1% of the mining income, but if Bitcoin grows, the transaction fees will likely follow, thus making output from BFMines higher than from TAT.VM.

.b

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July 09, 2013, 12:51:26 PM
 #27

I don't know why people are paying 88% the same price for the same thing for BFMINES by fuku when it doesn't pay divs until Metabank ships?Huh

One reason is that the bonus dividends in BFMines represents 15-20% higher dividends for the first six months. If you think Metabank delivers above specs, this bonus is even higher. All ASICs delivered seem to trend towards a higher spec to account for any performance issues. For example the AM blades and sticks hash at 30% over spec, and if the Metabank miner does the same, the bonus will be around 50% more than advertised.

Another reason can be that BFMines minues the bonus trades at less than TAT.VM minus the dividends expected until BFMines starts. Depending on how you predict difficulty change, TAT.VM is expected to mine 0.001178 until BFMines comes online. If this estimate is correct (and I've shown why this isn't relevant), the bonus for BFMines will at a minimum be 0.000535. The real cost of TAT.VM compared to BFMines is thus 0.001178 lower and BFMines is 0.000535 lower. That means that at this moment, BFMines is cheaper.

A third reason is that, unlike TAT.VM and DMS.Mining, for example, BFMines does actual mining, meaning it also produces transaction fees. Right now, transaction fees are around 1.1% of the mining income, but if Bitcoin grows, the transaction fees will likely follow, thus making output from BFMines higher than from TAT.VM.

.b

Fuku thanks for responding. After posting I read the updates on your blog and was starting to digest the other factors. A bit confusing, but interesting nonetheless.

Interesting if you are providing all extra hash over spec as well. That could be big.
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