Mining at a loss: Insurmountable Problem in the near future or am I mistaken?

[Vod]

niemivh you are right, mining will not be profitable in the future.  Bitcoin is the only commodity in history that has a GUARANTEED REDUCTION in rewards by 50% every few years until returns drop to ZERO.  Then you are depending on transaction fees which have no guarantees that they will be significant.

What are you talking about?  Bitcoin does not have a guaranteed reduction in rewards.  MINING bitcoins does.  The two are completely different.

[1714787714]

1714787714

[1714787714]

1714787714

[Mousepotato]

niemivh, the simple solution to this "insurmountable problem" is to mine your coins and wait til they're valuable enough to cover your HW cost and THEN sell them.

[edd]

Niemivh,

You seem to be assuming that all miners will immediately stop mining and abandon bitcoins if their efforts momentarily become cost prohibitive. Just because you did does not mean some won't hold out until one or more variables change, causing profitability to once again increase.

In other words (just as others have tried to point out), miners who can't or won't mine due to its lack of profitability make it more profitable for those who continue.

[niemivh]

so what would you have said to the miners in the beginning when they were paying for electricity -

and bitcoins were trading for 8 cents - with no buyers?



if they had listened to you -

bitcoins wouldn't be roughly $14 dollars now...



you're not factoring in faith.

early adopters had faith in bitcoin's future -

you don't.



so you did the right thing by leaving.

more for the believers.

Faith is nice, I guess, but if the fundamentals of Bitcoin were based on a faulty foundation it wouldn't have mattered.  That was then, this is now.

Nobody seems to be addressing the fundamental concern I'm raising here.  Not surprising, that happens all the time here.

[niemivh]

niemivh you are right, mining will not be profitable in the future.  Bitcoin is the only commodity in history that has a GUARANTEED REDUCTION in rewards by 50% every few years until returns drop to ZERO.  Then you are depending on transaction fees which have no guarantees that they will be significant.

What are you talking about?  Bitcoin does not have a guaranteed reduction in rewards.  MINING bitcoins does.  The two are completely different.

And you think the price is going to be going up or even staying the same if miners sell their gains and equipment?  How you figure?

[niemivh]

niemivh, the simple solution to this "insurmountable problem" is to mine your coins and wait til they're valuable enough to cover your HW cost and THEN sell them.

Aren't addressing the large buy-in cost that exists now, will increase past the point of Moore's law soon, and also that this was not the case for the past 2 years.

[RandyFolds]

As we've seen it only takes someone with about 4% of the supply of BTC to completely crash the price to $0.01, that is the kind of downward pressure compounded with the lack of liquidity that can be brought to bear. 

When did we see this?

[niemivh]

Niemivh,

You seem to be assuming that all miners will immediately stop mining and abandon bitcoins if their efforts momentarily become cost prohibitive. Just because you did does not mean some won't hold out until one or more variables change, causing profitability to once again increase.

In other words (just as others have tried to point out), miners who can't or won't mine due to its lack of profitability make it more profitable for those who continue, either by choice or necessity.

Actually I didn't assume that.  But I am pointing out a trend that I believe we are already witnessing, the slow decline in price from after the period of great volatility that apparently has no end in sight.  I'm wondering if this could break into a full scale 'run for the exit'.

Please read my post again if you care to debate what I'm actually trying to convey rather than what you've quote mined.

[Mousepotato]

As we've seen it only takes someone with about 4% of the supply of BTC to completely crash the price to $0.01, that is the kind of downward pressure compounded with the lack of liquidity that can be brought to bear. 

When did we see this?

No idea.  I'm guessing some time in 2009?

[niemivh]

As we've seen it only takes someone with about 4% of the supply of BTC to completely crash the price to $0.01, that is the kind of downward pressure compounded with the lack of liquidity that can be brought to bear. 

When did we see this?

The MtGox hack was a sell off of a single account with about 4% of the entire BTC volume.  This isn't a point to say that this was a legitimate trade or anything like that, but it did show that there wasn't enough of a countervailing force (liquidity) to absorb that sell off.

Leads me to believe that if any other person with 100k in BTC were to even sell it off via a darkpool it would cost more downward pressure in the market than we are already experiencing.

[RandyFolds]

As we've seen it only takes someone with about 4% of the supply of BTC to completely crash the price to $0.01, that is the kind of downward pressure compounded with the lack of liquidity that can be brought to bear. 

When did we see this?

No idea.  I'm guessing some time in 2009?

We didn't...

As we've seen it only takes someone with about 4% of the supply of BTC to completely crash the price to $0.01, that is the kind of downward pressure compounded with the lack of liquidity that can be brought to bear. 

When did we see this?

The MtGox hack was a sell off of a single account with about 4% of the entire BTC volume.  This isn't a point to say that this was a legitimate trade or anything like that, but it did show that there wasn't enough of a countervailing force (liquidity) to absorb that sell off.

Leads me to believe that if any other person with 100k in BTC were to even sell it off via a darkpool it would cost more downward pressure in the market than we are already experiencing.

Nope. Why don't you read up on that one again?

[Mousepotato]

Aren't addressing the large buy-in cost that exists now, will increase past the point of Moore's law soon, and also that this was not the case for the past 2 years.

Yes it was.  Before GPU mining came along, in order to increase your hashing power, you had to buy more CPUs, which meant an additional mobo/PSU/memory/etc.  And back then top of the line Core i7s were (still are) more expensive than 6990s... yet people still did it.

[static]

dood!

you sold all your btc according to your post.


and you think btc is fail.




so stfu already and leave.

[RandyFolds]

so stfu already and leave.

This...

[niemivh]

so stfu already and leave.

This...

Granted.  I'm out of here for this and other reasons.

Opposing viewpoints are not tolerated on a forum that pretends to promote 'freedom' and 'liberty'.  Only freedom and liberty to chant the dogma into an echo chamber of other ignorant drones who literally have never read any history book that didn't massage their already preconceived notions.

The incredulous nature of the average user here is starting to rub off on me, I'm off to greener pastures.

To those who will listen take it or leave it.

We'll see who is right.

[tvbcof]

Hopefully people who don't need their rigs any more will sell them...at a discount   Actually I did seriously considered this when I decided _not_ to build a rig.  And I suspected that a ramp-up in the manufacture of cards may overshoot demand.

I use a space heater sometimes.  I may as well be mining due to the nature of the laws of thermodynamics, but a space heater is currently much cheaper than a mining rig.  (Then there is the noise problem I suppose.)

[ttk2]

so stfu already and leave.

This...

Granted.  I'm out of here for this and other reasons.

Opposing viewpoints are not tolerated on a forum that pretends to promote 'freedom' and 'liberty'.  Only freedom and liberty to chant the dogma into an echo chamber of other ignorant drones who literally have never read any history book that didn't massage their already preconceived notions.

The incredulous nature of the average user here is starting to rub off on me, I'm off to greener pastures.

To those who will listen take it or leave it.

We'll see who is right.

Look  i know we seem impolite, but we have heard this again and again and again and again from almost day 1. It gets bothersome after the 100th time and after the 1000th time we get a little short tempered. When something new is brought to the table we debate and come to our own conclusions, you have brought nothing new to the table, your just rehashing a point we have all heard 10 times today alone. We sound like an echo chamber simply because we have already debated this with the guy before you and the guy before him and so on and so forth. I apologize on behalf of this form but i really cant blame them for being like this after dealing with the exact same questions brought up every 10 minutes each time the author believing that he was the first one to see this terrible problem, and reiterating that we are en echo chamber simply because we reached a consensus the first time someone asked this question. 

[cunicula]

niemivh you are right, mining will not be profitable in the future.  Bitcoin is the only commodity in history that has a GUARANTEED REDUCTION in rewards by 50% every few years until returns drop to ZERO.  Then you are depending on transaction fees which have no guarantees that they will be significant.

Yes this is right, but near future is a mischarecterization. Weak security followed by sabotage followed by collapse will take decades to come to pass. 2nd mischarecterization is hardware quality. Much more important will be what you are paying for electricity. Some people have it for free. Others as low as 5 us cents per kwh. These people will be the medium term miners.

Right now i am still mining. Bubble guarenteed to burst in decades can remain inflated for decades.
People might see the light with regards to proof of stake before the disaster occurs. Then the bubble would not need to pop even in decades.

[indio007]

As we've seen it only takes someone with about 4% of the supply of BTC to completely crash the price to $0.01, that is the kind of downward pressure compounded with the lack of liquidity that can be brought to bear. 

When did we see this?

The MtGox hack was a sell off of a single account with about 4% of the entire BTC volume.  This isn't a point to say that this was a legitimate trade or anything like that, but it did show that there wasn't enough of a countervailing force (liquidity) to absorb that sell off.

Leads me to believe that if any other person with 100k in BTC were to even sell it off via a darkpool it would cost more downward pressure in the market than we are already experiencing.

I thought they had fictitious bitcoins in MTGOX's system. They basically credited themselves a gazillion bitcoins that didn't really exist and sold them.

[RandyFolds]

so stfu already and leave.

This...

Granted.  I'm out of here for this and other reasons.

Opposing viewpoints are not tolerated on a forum that pretends to promote 'freedom' and 'liberty'.  Only freedom and liberty to chant the dogma into an echo chamber of other ignorant drones who literally have never read any history book that didn't massage their already preconceived notions.

The incredulous nature of the average user here is starting to rub off on me, I'm off to greener pastures.

To those who will listen take it or leave it.

We'll see who is right.

I agree that the forum is a troll's nest, but what is your end game with starting this thread? Did you think that everyone would be like, "Yeah, dude, you're totally right. We're all out!" or what?

You sure used a lot of words to say 'I hate you guys I'm not playing anymore!'.