Ridi (OP)
Member
![*](https://bitcointalk.org/Themes/custom1/images/star.gif)
Offline
Activity: 200
Merit: 11
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 02:58:04 PM |
|
I've been reading this thread https://bitcointalk.org/index.php?topic=36687.0 [Reddit] The Real cost of Bitcoin? - Breaking Down the Math I agree with a few of the posters that the numbers are manipulated in the fact that the bitcoin system can handle many more transactions than what is currently used, without any increased overall cost, resulting in a decreased cost per transaction. This highlights a problem with 'miners' though. Their supply far exceeds the demand. They have to consume massive resources in order to obtain the 50 BTC reward and in order to become profitable they need to sell BTC at gouged rate on the markets. The plain fact of the matter is that BTC is not worth that much, and that much power is not necessary to sustain the system. It's expected that after the mining pool is tapped at 21,000,000 BTC that the miners will hemorrhage unnecessary miners as supply falls to meet demand levels. The current situation though is that as 'miners' pump more processing power into the pool, they will have to gouge the price of BTC to keep running at a profit. Quite simply I don't think it's ethical to be purchasing BTC at these rates unless you have a legitimate need for them. I also speculate that this will catch up with miners, they are essentially pegging the bitcoin to the electricity and equipment involved (not unreasonable) and then throwing in as much electricity and equipment as they can get their hands on (in essence, the decentralized bank can do stupid shit too when the buyers let it.)
|
AliceinCrypto.com Progressive Free 2 Play + Play 2 Earn Fantasy Fight Game with its own Exclusive NFT Collection▐ ▌ WIN A TESLA CYBERTRUCK | $60,000 in BTC | $50,000 in ETH | and MORE! | ▐ ▌
|
|
|
foggyb
Legendary
Offline
Activity: 1736
Merit: 1006
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 03:18:04 PM |
|
Dear Simply: Where do you people come from? You've been a member of this forum for 12 days. And you've picked up a lot of knowledge on your "journey". Thanks for sharing. ![Tongue](https://bitcointalk.org/Smileys/default/tongue.gif)
|
Hey everyone! 🎉 Dive into the excitement with the Gamble Games Eggdrop game! Not only is it a fun and easy-to-play mobile experience, you can now stake your winnings and accumulate $WinG token, which has a finite supply of 200 million tokens. Sign up now using this exclusive referral link! Start staking, playing, and winning today! 🎲🐣
|
|
|
JoelKatz
Legendary
Offline
Activity: 1596
Merit: 1012
Democracy is vulnerable to a 51% attack.
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 03:18:37 PM |
|
I was following you until the last paragraph. How or why is it unethical exactly?
|
I am an employee of Ripple. Follow me on Twitter @JoelKatz 1Joe1Katzci1rFcsr9HH7SLuHVnDy2aihZ BM-NBM3FRExVJSJJamV9ccgyWvQfratUHgN
|
|
|
fastandfurious
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 03:22:10 PM |
|
I've been reading this thread https://bitcointalk.org/index.php?topic=36687.0 [Reddit] The Real cost of Bitcoin? - Breaking Down the Math I agree with a few of the posters that the numbers are manipulated in the fact that the bitcoin system can handle many more transactions than what is currently used, without any increased overall cost, resulting in a decreased cost per transaction. This highlights a problem with 'miners' though. Their supply far exceeds the demand. They have to consume massive resources in order to obtain the 50 BTC reward and in order to become profitable they need to sell BTC at gouged rate on the markets. The plain fact of the matter is that BTC is not worth that much, and that much power is not necessary to sustain the system. It's expected that after the mining pool is tapped at 21,000,000 BTC that the miners will hemorrhage unnecessary miners as supply falls to meet demand levels. The current situation though is that as 'miners' pump more processing power into the pool, they will have to gouge the price of BTC to keep running at a profit. Quite simply I don't think it's ethical to be purchasing BTC at these rates unless you have a legitimate need for them. I also speculate that this will catch up with miners, they are essentially pegging the bitcoin to the electricity and equipment involved (not unreasonable) and then throwing in as much electricity and equipment as they can get their hands on (in essence, the decentralized bank can do stupid shit too when the buyers let it.) Welcome to the game, I have been saying this for a month now. The direct buyer at the exchange are feeding the miners fat and happy. The problem is that the direct buyer doesn't understand economics. My tip is to start reading the mining sector of this forum.
|
|
|
|
brocktice
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 03:24:18 PM |
|
This was the equilibrium posited by Satoshi in his paper, and you have it wrong. In fact, price drives mining, not the other way around. Whether there are 5 miners or 5000 the supply will be the same. The large moves in the market make plain that speculators, not miners, are the ones setting prices.
|
|
|
|
fastandfurious
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 03:35:58 PM Last edit: August 13, 2011, 05:19:14 PM by fastandfurious |
|
This was the equilibrium posited by Satoshi in his paper, and you have it wrong. In fact, price drives mining, not the other way around. Whether there are 5 miners or 5000 the supply will be the same. The large moves in the market make plain that speculators, not miners, are the ones setting prices.
You are right "sometimes". The problem is this, when the mining sector of the Bitcoin economy gets to big, the direct buyer starts feeding the beast (the miners), they want and need to have their money back from their investment, and the only way to do this is to attack the direct buyer at the exchanges. You could say that it is a constant fight between the direct buyer and the miners. My belief right now is that the miners are in desperate need to get their money back and that is the reason we see the price hit new lows. If the direct buyer were smart, we would already have hit equilibrium, but the direct buyer is greedy and don't understand economics. The heavy investments was all made in May and June of this year. Before the money of those investments are not taken home from the direct buyer we will see a continued downturn and pressure on price. That was the reason I said it will hit 5-6 dollars when it cost 12 dollars a couple of weeks ago.
|
|
|
|
Ridi (OP)
Member
![*](https://bitcointalk.org/Themes/custom1/images/star.gif)
Offline
Activity: 200
Merit: 11
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 04:45:04 PM |
|
I was following you until the last paragraph. How or why is it unethical exactly?
I probably should have been more specific. With miners consuming massive resources being the economy's need, I feel it's unethical to support and fund this ecologically wasteful behavior. These resources are namely electricity, equipment, and the resources used to create both. In essence I'm taking a Green stand on purchasing bitcoin. I would also like to add before the troll have a chance to chime in about how such things sound like government regulation. I'm exercising the principles of voting with my dollars and using free speech to advocate my beliefs. I don't think this needs a programming fix or some kind of authority pegging bitcoin to a reasonable price. I think this needs a 'let's get our head's out of our asses' fix. Edit- Dear Simply: Where do you people come from? You've been a member of this forum for 12 days. And you've picked up a lot of knowledge on your "journey". Thanks for sharing. ![Tongue](https://bitcointalk.org/Smileys/default/tongue.gif) *Hands foggyb some troll chow and scratches behind it's ears* Thanks for the feedback
|
AliceinCrypto.com Progressive Free 2 Play + Play 2 Earn Fantasy Fight Game with its own Exclusive NFT Collection▐ ▌ WIN A TESLA CYBERTRUCK | $60,000 in BTC | $50,000 in ETH | and MORE! | ▐ ▌
|
|
|
JoelKatz
Legendary
Offline
Activity: 1596
Merit: 1012
Democracy is vulnerable to a 51% attack.
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 04:51:16 PM |
|
I probably should have been more specific. With miners consuming massive resources being the economy's need, I feel it's unethical to support and fund this ecologically wasteful behavior. These resources are namely electricity, equipment, and the resources used to create both. In essence I'm taking a Green stand on purchasing bitcoin. I assume you take the same stand on banks and credit cards, right?
|
I am an employee of Ripple. Follow me on Twitter @JoelKatz 1Joe1Katzci1rFcsr9HH7SLuHVnDy2aihZ BM-NBM3FRExVJSJJamV9ccgyWvQfratUHgN
|
|
|
Ridi (OP)
Member
![*](https://bitcointalk.org/Themes/custom1/images/star.gif)
Offline
Activity: 200
Merit: 11
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 05:11:06 PM |
|
This was the equilibrium posited by Satoshi in his paper, and you have it wrong. In fact, price drives mining, not the other way around. Whether there are 5 miners or 5000 the supply will be the same. The large moves in the market make plain that speculators, not miners, are the ones setting prices.
Supply of Miners and processing power is the problem, not the supply of Bitcoin. We have excessively more processing power than we need. And yes, speculators are the ones feeding the beast so to say. I think the money is recycling itself though, miners and those who understand mining are seeing bitcoin forced below profitability by the market and buying it expecting it to sell profitably based on the cost of mining. Miners and those who made a lot of money on the BTC speculation bubble are likely, in my opinion, recycling the money over and over again and hemorrhaging it out of the economy with speculation. I assume you take the same stand on banks and credit cards, right?
In my case that is a very safe assumption. I do not do business with either, for many reasons.
|
AliceinCrypto.com Progressive Free 2 Play + Play 2 Earn Fantasy Fight Game with its own Exclusive NFT Collection▐ ▌ WIN A TESLA CYBERTRUCK | $60,000 in BTC | $50,000 in ETH | and MORE! | ▐ ▌
|
|
|
Fjordbit
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 05:56:16 PM |
|
This highlights a problem with 'miners' though. Their supply far exceeds the demand.
How do you figure this? The daily supply of bitcoins is around 7300. The daily trade volume for bitcoing is in the 20-40 thousand range depending on the day (in the last 24 hours it's been about 24 thousand, but I've seen it higher this week). Clearly more people are buying than there are coins being mined.
|
|
|
|
grod
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 06:14:21 PM |
|
I'm not sure you can take volumes at MtGox as a reliable proxy for number of coins having traded hands at the end of the day. There's a lot of froth being caused by bots playing with each other as a result of reduced commissions. And day traders are all on mtgox, since no other exchange has enough volume or volatility for anything over $1000 in play money. I strongly doubt $73000 new dollars are finding their way to mtgox a day let alone 5-20x that.
Only the operator of mtgox has a clear picture of how many bitcoins vs how many dollars are being deposited as opposed to being taken out, and as a result what % of newly minted coins are being hoarded in comparison to the historic 80%+ levels. I'm one of those jonny-come-lately miners, and I can tell you all I'm doing is depositing bitcoins and receiving dollars. I have no reason to believe my behavior is atypical of the other 3/4 of the mining power.
What I think happened as a result of 3/4 mining power being added since June is a shift from a mining demographic content to hoard most and sell a small % to those of us wanting to sell most and hoard very little. This IMO is not a bad thing.
|
|
|
|
Ridi (OP)
Member
![*](https://bitcointalk.org/Themes/custom1/images/star.gif)
Offline
Activity: 200
Merit: 11
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 06:48:33 PM |
|
This highlights a problem with 'miners' though. Their supply far exceeds the demand.
How do you figure this? The daily supply of bitcoins is around 7300. The daily trade volume for bitcoing is in the 20-40 thousand range depending on the day (in the last 24 hours it's been about 24 thousand, but I've seen it higher this week). Clearly more people are buying than there are coins being mined. To re-iterate my point, it is the supply of Miners (or particularly processing power), not the supply of bitcoin, that I am concerned with. Mining requires massive amounts of power which should serve to limit the amount of miners joining the pool. Instead the market buy-side adjusts to protect the miners profitability. An Example. You could eliminate half the processing power of the system and it wouldn't effect the supply of BTC one iota, but the amount of power used to process transactions (and mint BTC) would be massively reduced. The Demand for 'Miners' comes from transactions, there need to be enough miners to swiftly process all transactions currently on the system. Which we currently have many THz of processing power going to transact something like a few hundred transactions during peak transaction times.
|
AliceinCrypto.com Progressive Free 2 Play + Play 2 Earn Fantasy Fight Game with its own Exclusive NFT Collection▐ ▌ WIN A TESLA CYBERTRUCK | $60,000 in BTC | $50,000 in ETH | and MORE! | ▐ ▌
|
|
|
the joint
Legendary
Offline
Activity: 1834
Merit: 1020
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 06:54:15 PM |
|
I was following you until the last paragraph. How or why is it unethical exactly?
Bingo. If someone is willing to pay $1,000,000 for it, how is that unethical? People place the value they want to place upon something. Nobody is forcing them to buy, and yet, they are buying. I could charge you $1,000,000 per BTC, and even then, how would that be unethical? If you don't want it, don't buy it.
|
|
|
|
the joint
Legendary
Offline
Activity: 1834
Merit: 1020
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 06:56:04 PM |
|
I've been reading this thread https://bitcointalk.org/index.php?topic=36687.0 [Reddit] The Real cost of Bitcoin? - Breaking Down the Math I agree with a few of the posters that the numbers are manipulated in the fact that the bitcoin system can handle many more transactions than what is currently used, without any increased overall cost, resulting in a decreased cost per transaction. This highlights a problem with 'miners' though. Their supply far exceeds the demand. They have to consume massive resources in order to obtain the 50 BTC reward and in order to become profitable they need to sell BTC at gouged rate on the markets. The plain fact of the matter is that BTC is not worth that much, and that much power is not necessary to sustain the system. It's expected that after the mining pool is tapped at 21,000,000 BTC that the miners will hemorrhage unnecessary miners as supply falls to meet demand levels. The current situation though is that as 'miners' pump more processing power into the pool, they will have to gouge the price of BTC to keep running at a profit. Quite simply I don't think it's ethical to be purchasing BTC at these rates unless you have a legitimate need for them. I also speculate that this will catch up with miners, they are essentially pegging the bitcoin to the electricity and equipment involved (not unreasonable) and then throwing in as much electricity and equipment as they can get their hands on (in essence, the decentralized bank can do stupid shit too when the buyers let it.) Welcome to the game, I have been saying this for a month now. The direct buyer at the exchange are feeding the miners fat and happy. The problem is that the direct buyer doesn't understand economics. My tip is to start reading the mining sector of this forum. Speculation can add a lot of value. A deflationary currency assumes that over time, it's value will eventually increase far beyond it's current level. So, buyers will sacrifice additional short-term risk for the potential of long-term profit.
|
|
|
|
geek-trader
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 07:08:11 PM |
|
To re-iterate my point, it is the supply of Miners (or particularly processing power), not the supply of bitcoin, that I am concerned with. Mining requires massive amounts of power which should serve to limit the amount of miners joining the pool. Instead the market buy-side adjusts to protect the miners profitability.
How does "market buy-side adjusts to protect the miners profitability." ? This does not happen. Just last week, when BTC went down below $10 and stayed there, many miners got out. The network total hashrate went from over 15 THashes/s to below 12. Right this second it's at 11.925 Thashes/s Mining follows price, not the other way around. The "market buy-side" protects it's own profitability, not the miner's. That's just basic economics. BTC traders trade because they think THEY can make money. They buy or sell to enrich themselves. They are not some charity for miners.
|
|
|
|
Ridi (OP)
Member
![*](https://bitcointalk.org/Themes/custom1/images/star.gif)
Offline
Activity: 200
Merit: 11
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 07:34:58 PM |
|
I was following you until the last paragraph. How or why is it unethical exactly?
Bingo. If someone is willing to pay $1,000,000 for it, how is that unethical? People place the value they want to place upon something. Nobody is forcing them to buy, and yet, they are buying. I could charge you $1,000,000 per BTC, and even then, how would that be unethical? If you don't want it, don't buy it. And what do you know, I'm not buying, I don't see why you are arguing my point. Unless you think that speculation is the only reason a person would buy or sell. To re-iterate my point, it is the supply of Miners (or particularly processing power), not the supply of bitcoin, that I am concerned with. Mining requires massive amounts of power which should serve to limit the amount of miners joining the pool. Instead the market buy-side adjusts to protect the miners profitability.
How does "market buy-side adjusts to protect the miners profitability." ? This does not happen. Just last week, when BTC went down below $10 and stayed there, many miners got out. The network total hashrate went from over 15 THashes/s to below 12. Right this second it's at 11.925 Thashes/s Mining follows price, not the other way around. The "market buy-side" protects it's own profitability, not the miner's. That's just basic economics. BTC traders trade because they think THEY can make money. They buy or sell to enrich themselves. They are not some charity for miners. Markets are a two way street. That is basic economics. You're example about the Hash Rate falling is exactly what I'm talking about. My ethics say 11.9 is way too fucking much resource consumption for something that will still produce just fine a 2 or 3. I plan to advocate that until the price reaches a point low enough to force our obese bitcoin miner baby to a healthy rate.
|
AliceinCrypto.com Progressive Free 2 Play + Play 2 Earn Fantasy Fight Game with its own Exclusive NFT Collection▐ ▌ WIN A TESLA CYBERTRUCK | $60,000 in BTC | $50,000 in ETH | and MORE! | ▐ ▌
|
|
|
triforcelink
Member
![*](https://bitcointalk.org/Themes/custom1/images/star.gif)
Offline
Activity: 112
Merit: 10
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 07:40:51 PM |
|
You guys forgot to mention network security (look up the 51% attack) What is the cost of security and how do you even go about measuring it?
|
|
|
|
the joint
Legendary
Offline
Activity: 1834
Merit: 1020
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 07:46:06 PM |
|
I was following you until the last paragraph. How or why is it unethical exactly?
Bingo. If someone is willing to pay $1,000,000 for it, how is that unethical? People place the value they want to place upon something. Nobody is forcing them to buy, and yet, they are buying. I could charge you $1,000,000 per BTC, and even then, how would that be unethical? If you don't want it, don't buy it. And what do you know, I'm not buying, I don't see why you are arguing my point. Unless you think that speculation is the only reason a person would buy or sell. Your response is irrelevant to what I said. I said "they" are buying -- i.e. other people are buying. You are not, but others are. Value is embedded in the relationship between a subject (you) and the object (Bitcoin). Your decision to perceive Bitcoin as less valuable than its current trading value is irrelevant to the value others place upon Bitcoin, and it's because of the value that others place upon it that the trading price is currently at ~$10. If others placed the value much lower, then the trading value would be much lower. Did I say speculation is the only reason a person would buy or sell? I said that it can add to perceived value, and I think this is quite evident given the relatively small number of Bitcoin merchants. Buyers can buy to purchase goods, or because they think there will be more goods available (i.e. a growing Bitcoin economy), or because they think it is a better alternative to traditional currency, or because they think it's value will increase and they can "buy" more USD, or any other reason. Nonetheless, they are buying, and apparently, Bitcoins are simply "worth" the value at which they buy them, and that value is determined subjectively.
|
|
|
|
the joint
Legendary
Offline
Activity: 1834
Merit: 1020
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 07:52:16 PM |
|
Markets are a two way street. That is basic economics. You're example about the Hash Rate falling is exactly what I'm talking about. My ethics say 11.9 is way too fucking much resource consumption for something that will still produce just fine a 2 or 3. I plan to advocate that until the price reaches a point low enough to force our obese bitcoin miner baby to a healthy rate.
You must have weird a weird definition of ethics. I don't see how "11.9" for BTC that requires "too fucking much resource consumption" is worse than "2 or 3" for BTC that requires "too fucking much resource consumption. Wouldn't 11.9 be better than 2 or 3? At least then people better appreciate the product derived from "too fucking much resource consumption." Moreover, I don't get how this is tied into what is objectively wrong or right. "I value my 2008 Saturn Aura at 50 grand. I won't sell it to you for less" "How fucking dare you! It required too much fucking resource consumption to make! It should be $2 or $3!" "Ok, I'll buy 20,000 of them from you then." Edit: By the way, I'm pretty sure chopping down millions of trees to produce fiat currency (the production of which, by the way, also requires more fiat currency to fund it) fits into the category of "too fucking much resource consumption." Then again, I have no problem going back to a straight bartering system, but then you can kiss global commerce goodbye.
|
|
|
|
geek-trader
|
![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
August 13, 2011, 08:05:49 PM |
|
I fail to see how "ethics" applies to capitalism at all. We are dealing with raw capitalism here, not your feelings. If people can make money at it, they will do it.
|
|
|
|
|