Please Read!! Help Stop This Madness.

[An amorous cow-herder]

Because how do these claims apply to the "electronic value storage and transfer system" (EVSTS) as opposed to "currency"?
Does the EVSTS need to be mainstream to succeed?
Does the EVSTS need to grow to succeed?
Does the EVSTS need all of its members sending money all the time?

Thats a very good way of putting it.
And to answer the questions. It has to be sustainable. At current rates the maintance costs are $7.2M/month. Thats 25 BTC/block at block/10 minutes with BTC at ~$1K. In the long term the transaction fees have to pay the maintance cost, since no more BTC are "printed" or "mined" or however you want to call it.
The income from transactions fees is still very low, not enough to maintain the network at current rates by far. The options are either to increase transaction volume by a large amount in the mid term or reduce the amount of miners, thus decreasing overall security.

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[niothor]

Because how do these claims apply to the "electronic value storage and transfer system" (EVSTS) as opposed to "currency"?
Does the EVSTS need to be mainstream to succeed?
Does the EVSTS need to grow to succeed?
Does the EVSTS need all of its members sending money all the time?

Thats a very good way of putting it.
And to answer the questions. It has to be sustainable. At current rates the maintance costs are $7.2M/month. Thats 25 BTC/block at block/10 minutes with BTC at ~$1K. In the long term the transaction fees have to pay the maintance cost, since no more BTC are "printed" or "mined" or however you want to call it.
The income from transactions fees is still very low, not enough to maintain the network at current rates by far. The options are either to increase transaction volume by a large amount in the mid term or reduce the amount of miners, thus decreasing overall security.

Or to increase efficiency of mining , we already see cost per GH dropping to 5$ form 100 in the past.
And where did you get that 7.2 M/Month?

[An amorous cow-herder]

Or to increase efficiency of mining , we already see cost per GH dropping to 5$ form 100 in the past.
And where did you get that 7.2 M/Month?

Energy efficiency isnt the issue here. Its the bitcoins being generated by mining. 25 per block every roughly ten minutes. Or, in numbers 25BTC/block*6 blocks/hour*24hours/day*30days/months. Thus 108K BTC/month.
And yeah, sorry, that $7.2M/month was an old figure, checked an old version of a spreadsheat. The current numbers are far worse.
So basicly, since the network generates those 108K BTC (or, at current rates ~$108M) per month and most mining hardware barely breaks even nowadays even at those extremely high bitcoin prices its pretty fair to assume that this is the real cost is run the network.

[hashman]

Frankly your Economics department is correct in each of it's criticisms, you may of course point to a few threads of real trade that other Zealots like yourself engage in as a kind of Cargo-cult activity trying to 'summon' an economy out of a deflationary currency. 

But this dose not a real economy make, most people claiming to spend BTC immediately buy replacement BTCs when ever they spend them (making a net dollar purchase), or are just creaming off some of their wealth increase.  Lastly you have Mining equipment purchases which are clearly just an attempt to get more BTC's and should be seen as a COST of running the system, not it's economy.

If you are not able to understand that BTC is a speculative mania and not a currency then frankly you deserve to be flunked in Economics.

Whether this guy is right or wrong, you are paying to learn from your profs.  Obviously, they didn't have bitcoin when they got their degrees.  Study something else to get the most education for your coin    

[niothor]

Or to increase efficiency of mining , we already see cost per GH dropping to 5$ form 100 in the past.
And where did you get that 7.2 M/Month?

Energy efficiency isnt the issue here. Its the bitcoins being generated by mining. 25 per block every roughly ten minutes. Or, in numbers 25BTC/block*6 blocks/hour*24hours/day*30days/months. Thus 108K BTC/month.
And yeah, sorry, that $7.2M/month was an old figure, checked an old version of a spreadsheat. The current numbers are far worse.
So basicly, since the network generates those 108K BTC (or, at current rates ~$108M) per month and most mining hardware barely breaks even nowadays even at those extremely high bitcoin prices its pretty fair to assume that this is the real cost is run the network.

I was talking about the cost of miners , and not electricity.
Compare the first avalons with the knc miners and with the cointerra version
The price of getting the equal amount of hash the network has is dropping each month.

Also please let me know how much PH will that 108M/month buy. Around 20PH? 3 times more than we have?

[Rygon]

Bitcoin is fundamentally threatening to neo-Keynesian economists and those who favor left political stances.  Paul Krugman for example leads the NYT in a nearly single voice of dissent with his ridicule of bitcoin.  He, for example is constantly calling BTC 'deflationary' while calling the USD either stable or occasionally 'slightly deflationary' (lol).  I imagine your profs are of a similar mindset.

We DO know bitcoin is most likely in a speculative bubble at the moment.  If it is not it is changing history.

What we do NOT know yet is your professors are wrong in the weight of their bias.  I think they are.  But only time will tell.They are most certainly right about some of their stances on btc.

Fundamentally, you are trying to argue in favor of Austrian economic theory in a school for Keynesian theory. It's the economics equivalent of an evolutionist going to a Catholic school and trying to convince them that creationism is wrong. Don't risk failing your project because you are sticking to your guns. Worse case scenario is that your professors don't think you've learned anything in four years of school and think you shouldn't get your degree.

[An amorous cow-herder]

Also please let me know how much PH will that 108M/month buy. Around 20PH? 3 times more than we have?

Are you assuming a constant rate of BTC/TH or BTC/PH?
Thats the beginners mistake, as long as difficulty increases you will have a decline. And 20PH for 108M? Now, lemme se, where do you get 20PH for $108M? Or 20GH for $108, or 0.18GH/$ or 5.55$/GH.
Yeah, thats what you get on pre orders. And checking mining calculators like genesisblock those devices might, or might not, ROI. And given that current devices, and lets face it, 90%+ of current hasing power comes from asics, the devices in use currently are mostly first gen asics. Only the early orders are gonna ROI. Quite a couple of people are gonna have to pay for the privilege of mining.
But thats actually pretty irrelevant, since the mining industy will obviously converge towards the profit generated from mining. If mining equipment generates money out of nothing you buy it. If it generates less than you pay for it, you dont. The only mining equipment that still has a chance of profiting is pre orders, which is basicly the same as gambling. The size of the hardware mining industy is pretty excactly the same as the profit generated from mining. Yes, things are that simple at times.

[niothor]

Also please let me know how much PH will that 108M/month buy. Around 20PH? 3 times more than we have?

Are you assuming a constant rate of BTC/TH or BTC/PH?
Thats the beginners mistake, as long as difficulty increases you will have a decline. And 20PH for 108M? Now, lemme se, where do you get 20PH for $108M? Or 20GH for $108, or 0.18GH/$ or 5.55$/GH.
Yeah, thats what you get on pre orders. And checking mining calculators like genesisblock those devices might, or might not, ROI. And given that current devices, and lets face it, 90%+ of current hasing power comes from asics, the devices in use currently are mostly first gen asics. Only the early orders are gonna ROI. Quite a couple of people are gonna have to pay for the privilege of mining.
But thats actually pretty irrelevant, since the mining industy will obviously converge towards the profit generated from mining. If mining equipment generates money out of nothing you buy it. If it generates less than you pay for it, you dont. The only mining equipment that still has a chance of profiting is pre orders, which is basicly the same as gambling. The size of the hardware mining industy is pretty excactly the same as the profit generated from mining. Yes, things are that simple at times.

If mining will be less profitable with a projected difficulty increase and miners stop buying hardware , where will that projected increase come from?

[An amorous cow-herder]

If mining will be less profitable with a projected difficulty increase and miners stop buying hardware , where will that projected increase come from?

Dumb people. A lot of people fail a basic math. Why do you think people still buy first gen asics or even block eruptors on ebay?

[niothor]

If mining will be less profitable with a projected difficulty increase and miners stop buying hardware , where will that projected increase come from?

Dumb people. A lot of people fail a basic math. Why do you think people still buy first gen asics or even block eruptors on ebay?

1) Difficulty increases only if people are buying more miners.
2a) Difficulty is so high that people are not covering their running cost , people with low efficency miners stop and it's worth again mining for people with low costs.
2b) Difficulty is high that it's not worth buying miners but worth running them. Difficulty won't +/-. Until a new cheap miner emerges and we go to 2a.

This shit has been debated so many times in the forums it's getting annoyingly.
One of them:
https://bitcointalk.org/index.php?topic=295270.0

[An amorous cow-herder]

This shit has been debated so many times in the forums it's getting annoyingly.
One of them:
https://bitcointalk.org/index.php?topic=295270.0

Thanks for providing a link that proves my point.

[niothor]

This shit has been debated so many times in the forums it's getting annoyingly.
One of them:
https://bitcointalk.org/index.php?topic=295270.0

Thanks for providing a link that proves my point.

Why din't you told me in the first place your blind?

[An amorous cow-herder]

Why din't you told me in the first place your blind?

From your link:

To be able to calculate that, you need two simple assumptions:
- overall miners are rational and will only keep buying hardware until they reach the point of marginal profitability within a given period (investment horizon).
- Likewise, ASIC vendors will keep producing and selling chips as long as  its profitable, ie, as long as miners are wiling to pay a price above their marginal costs.

Ok, so miners will buy hardware as long as it as revenure>cost. Revenue is BTC over lifetime. Simple as that.
And ASIC vendors will build as long as miners pay more than production cost.

Fact 1: No miner you can actually currently buy (direct order) will make more than you pay for it, e.g. BFL.
Fact 2: No miner you can pre-order is guaranteed to be delivered on time, nor what the difficulty will be by then (unless you where to somehow know the total shipments in PH/s), nor how much a BTC will be worth by then.
And you call me blind???

[niothor]

Why din't you told me in the first place your blind?

From your link:

To be able to calculate that, you need two simple assumptions:
- overall miners are rational and will only keep buying hardware until they reach the point of marginal profitability within a given period (investment horizon).
- Likewise, ASIC vendors will keep producing and selling chips as long as  its profitable, ie, as long as miners are wiling to pay a price above their marginal costs.

Ok, so miners will buy hardware as long as it as revenure>cost. Revenue is BTC over lifetime. Simple as that.
And ASIC vendors will build as long as miners pay more than production cost.

Fact 1: No miner you can actually currently buy (direct order) will make more than you pay for it, e.g. BFL.
Fact 2: No miner you can pre-order is guaranteed to be delivered on time, nor what the difficulty will be by then (unless you where to somehow know the total shipments in PH/s), nor how much a BTC will be worth by then.
And you call me blind???

Go to that page , do the math and then say you were wrong:
"The income from transactions fees is still very low, not enough to maintain the network at current rates by far."

[An amorous cow-herder]

Go to that page , do the math and then say you were wrong:
"The income from transactions fees is still very low, not enough to maintain the network at current rates by far."

I can do a lot better. Back to you.

[niothor]

Go to that page , do the math and then say you were wrong:
"The income from transactions fees is still very low, not enough to maintain the network at current rates by far."

I can do a lot better. Back to you.

Your link 
Network Deficit Per Day - Shows difference between transaction fees and cost of bitcoin mining.

The cost of mining on blockchain is based on gpu numbers.

[An amorous cow-herder]

Your link 
Network Deficit Per Day - Shows difference between transaction fees and cost of bitcoin mining.

The cost of mining on blockchain is based on gpu numbers.

No, its the simple difference of payouts per day (calculating BTC in USD) vs income generated via transactions.
If you dont believe me, just compare it to the following, that the real actual income from usefullness. Yes, the transaction fees have never exceeded those 42K USD/day. And thats not even close to the "income" generated for block rewards. Block rewards are going to die with time. Transaction fees are the long term sustainability. And they are not catching up nearly fast enough.

[niothor]

Your link 
Network Deficit Per Day - Shows difference between transaction fees and cost of bitcoin mining.

The cost of mining on blockchain is based on gpu numbers.

No, its the simple difference of payouts per day (calculating BTC in USD) vs income generated via transactions.
If you dont believe me, just compare it to the following, that the real actual income from usefullness. Yes, the transaction fees have never exceeded those 42K USD/day. And thats not even close to the "income" generated for block rewards. Block rewards are going to die with time. Transaction fees are the long term sustainability. And they are not catching up nearly fast enough.

So you're telling me that your link
https://blockchain.info/de/charts/network-deficit
, labeled network deficit and explained as
Network Deficit Per Day - Shows difference between transaction fees and cost of bitcoin mining.
 
is "the simple difference of payouts per day (calculating BTC in USD) vs income generated via transactions"

Sir , You are obvious an Idiot.

[An amorous cow-herder]

So you're telling me that your link
https://blockchain.info/de/charts/network-deficit
, labeled network deficit and explained as
Network Deficit Per Day - Shows difference between transaction fees and cost of bitcoin mining.
 
is "the simple difference of payouts per day (calculating BTC in USD) vs income generated via transactions"

Sir , You are obvious an Idiot.

Ok, then tell me just one little thing. Why was the network deficit in April a lot bigger? Graphics cards were a lot more expensive in April? No? Oh right, there was a price surge of BTC.
I think there is an obvious idiot here, and i got a hunch it aint me.

[Ibian]

Is this really necessary? It's up to each individual miner if mining is worth it. Leave it to them.