did ASIC ruin bitcoin ?

[smscotten]

Why do people keep thinking this?
The miner could have bought  BTC directly with the capital investment (or maybe the initial investment was BTC anyway) so the future value of bitcoin doesn't matter. The investment is good if it makes more BTC than the capital would have bought, it's bad if it doesn't - the price of BTC does not factor into this.

I'm inclined to agree. I mine as an "investment" of sorts, but not the kind that pays short-term dividends on a balance sheet. The payoff is not a percentage-measurable profit but knowing that I've done something to support the operation of a currency I believe will make the world a better place for me to live in.

It's kind of cool that I get to spend the dividends too, and I wouldn't keep buying hardware if I were seeing nothing come back to me at all. And I know enough other people are doing it so I don't need to, but that's just sort of how I roll.

[JoelKatz]

Why do people keep thinking this?
The miner could have bought  BTC directly with the capital investment (or maybe the initial investment was BTC anyway) so the future value of bitcoin doesn't matter. The investment is good if it makes more BTC than the capital would have bought, it's bad if it doesn't - the price of BTC does not factor into this.

Huh? Say a mining machine costs $5,000 and is expected to average about one Bitcoin per day over the next 3 months. If Bitcoins are $1 each, that's a lousy deal. If Bitcoins are $100 each, that's a pretty good deal. The cost of mining hardware is based on dollars because mining companies have to pay employees and suppliers that way.

[Snail2]

A note about the original question. ASICs didn't ruin bitcoin. ASICs put bitcoin to an "industrial" level. What these boxes ruined is the "small town" feeling

[SeanArce]

You don't own bitcoin. Like the above user said, bitcoin was meant for use to have a free economy. asics didn't ruin anything. I would mine alt coin. Crypto gave a new meaning to competing currencies

[smscotten]

A note about the original question. ASICs didn't ruin bitcoin. ASICs put bitcoin to an "industrial" level. What these boxes ruined is the "small town" feeling

For some people, maybe. With my one FPGA and two block eruptors it still feels like a pretty small town around here.

But yeah, I think you're exactly right about what other people think it ruined.

[shields]

Why do people keep thinking this?
The miner could have bought  BTC directly with the capital investment (or maybe the initial investment was BTC anyway) so the future value of bitcoin doesn't matter. The investment is good if it makes more BTC than the capital would have bought, it's bad if it doesn't - the price of BTC does not factor into this.

Huh? Say a mining machine costs $5,000 and is expected to average about one Bitcoin per day over the next 3 months. If Bitcoins are $1 each, that's a lousy deal. If Bitcoins are $100 each, that's a pretty good deal. The cost of mining hardware is based on dollars because mining companies have to pay employees and suppliers that way.

If BTC are $100 each, the question is whether the miner will ever mine 50BTC? If it mines more than 50BTC it's profitable otherwise it isn't, as you could have bought 50BTC. The argument people make is "oh you pay $5,000 and make only 25BTC, but those BTC will be worth way more than $5,000 in future so it's a good investment". My point is no matter what the price of BTC rises to you'd be better off buying 50 up front instead of mining 25.

[smscotten]

Theoretically given infinite time, the mining hardware is always the better purchase because it makes new Bitcoin. Though that might intuitively make sense, it's wrong if either of the following conditions are true (basically the same condition, but whatever):

1) difficulty increases and/or block rewards decrease faster than you can mine new coin.
2) difficulty goes high enough that the amount mined won't add up to your initial investment in your lifetime.

The difference between the two conditions is only whether it's "never" or "not in your lifetime." So basically the same condition even if the math shakes out a little differently.

That's why the block eruptors make such great gifts and less-great investments. If you give one away, the recipient gets a free fountain of money for the rest of their life. What fun! Even if it will be fractions of a Satoshi per year in not too long, it is free! Yay! But when you buy them with your own money it's sort of a different dynamic.

[razorfishsl]

Stupidity is like Nuclear waste....
Better to stay FAR way, even better to not get any on you.

[shields]

2) difficulty goes high enough that the amount mined won't add up to your initial investment in your lifetime.

Or difficulty rises to a level that your electricity costs of running the miner exceed the BTC you make from it.

[JoelKatz]

If BTC are $100 each, the question is whether the miner will ever mine 50BTC? If it mines more than 50BTC it's profitable otherwise it isn't, as you could have bought 50BTC.

It's actually slightly worse than that ecause if you buy 50 BTC, you can sell them any time you want. If you mine 50 BTC, you can't sell them until you mine them.

The argument people make is "oh you pay $5,000 and make only 25BTC, but those BTC will be worth way more than $5,000 in future so it's a good investment". My point is no matter what the price of BTC rises to you'd be better off buying 50 up front instead of mining 25.

True, but the arguments rarely work out quite that way. You generally don't really know how many BTC you're going to get because future difficulty is hard to predict. But I absolutely agree that if you're trying to decide whether to mine, you should first compare buying mining hardware to buying BTC.

[RChevalier]

Depends on who you ask.  For GPU miners, yes.  For the receivers of the first Avalon batch, no.  For those waiting for their deliveries, depends on your queue.  Then there are long term investors and day traders.  Day traders may like the ever increasing volume to play with.  Long term investors may hate the volitility. Merchants dealing in bitcoin may also like the increase in volume and ultimately the publicity it brings.  In the overall sense I don't think ASICs ruined Bitcoin itself, just certain aspects relating to it, for certain people.  Bitcoin will continue to chug along, and ASICs will eventually be archived as just another part of bitcoin's history when something better comes along.

[smscotten]

Day traders may like the ever increasing volume to play with.

I'm with you on the rest of it, but this confused me. How do ASICs contribute to increased trading volume?

[User705]

You can't ruin Bitcoin with hardware.  Bitcoin can be ruined if it's utility is threatened but that's not with hardware.  Even if someone had a magic box with 60% of hashing power right now they still wouldn't find it profitable in real life to double spend and crash the rate vs simply to mine and sell the coins at a much higher rate.  That's exactly what happened with Avalon.  They probably at one point had more hashpower than the entire network combined if not a few times that, but who could they double spend to make it even remotely worthwhile?  Nobody.  Will that remain true as we approach both a much larger acceptance therefore a much easier double spend profitability and a lower block reward combined with lots of old cheap asics with lots of hashpower but simply electrically inefficient.  Only time will tell.

[faiza1990]

yes I believe its ruin

[01BTC10]

What would have ruined Bitcoin is that an attacker used existing technology (ASIC) to 51% the network. ASIC actually made the network more secure. When the price was lower it was easier to mine bitcoins but interest was lower. Now the price is higher and so is the difficulty since everyone is sharing the same pie and interest increased.

[Darktongue]

The space race is fucking over.  Hype has fallen and yes BTC more then likely needs a fix.  2  years of speculation lead to a ton of improvements on GPU and FPGA Mineing.  For some it was an education.  Myself included.  Now that we really don't have much to tweak on we are bored and restless LOL.

It's an arms race now. No real fun in that.  No real education aside from perhaps understanding ASIC Tech. I pray daily somebody will find a homebrew method to allowing one to expand on this hardware they have.  But thay isn't going to happen.  I for one am going to continue keeping one or two gpu rigs around.  So much can be done aside from ET Search and PW Cracking.

For me it's not about money.  This hosted mineing shit with 4737474GigaNanoUberBits of hash powet per person.  Thats more money then brains

[frankenmint]

Sigh...no it proliferated bitcoin. Now there are other alts around and they exist for complainers to mine about.  I think there are more inventive ways that those with fiat could use the bitcoin and also the proliferation of alts - http://vimeo.com/71559751

Once more people ...both rich and poor....have these alts it will be a good incentive to push merchants into accepting them.  I think that bitcoin being around this long and having this much network hashing power available allows it to be resistant to being attacked.  Unlike a computer,  an asic machine doesnt use an OS and is not subject (yet) to the risk of botnets or malware designed to wreak havok.  I don't know why the blackhats haven't yet created FUDwallets or spinoffs of coins that are designed to destroy cpus or hardware as they would then put off potential entrants to the community and would also sabatoge those whom wish to encroach on their precious pie of network hashrate. 

 

Crazy right...I hope that doesn't happen but I imagine it would...UNLESS we decide to work together to build upon a platform of cryptocurrency economies.  Like for instance why couldn't a bunch of comicbook shops ban together and be willing to accept bitcoin litecoin and galaxycoin exclusively?  Wouldn't that just shoot the price of galaxycoin UP?  Why couldn't fastfood shops accept fastcoin?  I think that currencies could be here to stay if there were more adoptions for them and/or useful purposes. 

[ProfMac]

I am likely only to break even and am OK with that.

fuck that, you may be OK with that but i will bet you my soul the majority of people will not be OK with that. people dont invest to break even. they expect or hope for a healthy return.

The first bitcoin miners did not expect return.

[User705]

I am likely only to break even and am OK with that.

fuck that, you may be OK with that but i will bet you my soul the majority of people will not be OK with that. people dont invest to break even. they expect or hope for a healthy return.

The first bitcoin miners did not expect return.

that may be the problem with this wave is that a lot of people will get disillusioned that they got taken for a ride by the earlier adopters and quit or start calling cops and lawyers.

[SlyFoxy12]

I'd say little yes, it's not because ASIC is a problem it's the fact that previously we were all mining coin with readily available hardware so it felt equal opportunity but now it's difficult to get hold of good hardware and at the same time a lot of shifty people are trying to dupe people with fake offers to buy miners or even the people selling miners genuinely are quite shifty like BFL, unless it goes back to how it was I feel the system will lose a lot of hobbyists because it comes down to how do you compete against such people?

a block erupter hashes at a respectable rate when you compare to GPU, and cost much less. Now we all know that they wont hit ROI -- did anyone here running a GPU cluster hit roi?

When has anybody actually made bank? Other than ATI, and now ASIC vendors and their resellers.  It sounds like people upset they cant play, like USB asics aren't on these very forums for BTC.38

Yeah I did, but I ran a small operation, bought 2 GPUs and stuck then in an already high powered machine, ran it for a few months and made double my money but that does involve knowing when to sell out your coins and not being too greedy.

Block Erupters aren't very economical pieces of kits, you'd need a good number to keep up with the difficulty rate