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Author Topic: I'm not seeing miners leave in hordes...  (Read 10686 times)
BkkCoins
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September 14, 2011, 04:14:15 AM
 #21

And then you have those with electric heating and winter coming on soon. No reason not to mine to heat the house...

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September 14, 2011, 11:55:34 AM
 #22

Anyone mining for under the cost of electricity per bitcoin is basically making one bet, that the future value of the bitcoin will be worth more than it is today.  Is it a safe bet?  Absolutely not.  No matter what you read on these forums no one really knows if bitcoins will be worth $25, $10, $5 or $1 in a year's time.  A lot can happen to bitcoin and its periphery during that time (just recall the last 4 months!).

Five months ago the 'difficulty drives price' argument was popular on these forums.  We've seen that argument fail many times (just check bitcon's value in June and now, and compare difficulty).  The next argument for much higher values is a reduction in bitcoins per block sometime next year from 50 to 25.  Yet no one really knows if this will have any impact on price.  Difficulty has more than quadrupled in the last few months (equivalent to getting 12.5 BTC per block instead of 50 with the same difficulty) yet the price is a fraction of what it once was.

Miners are probably not leaving in hoards now because they're betting on higher prices.  My suggestion is if bitcoin's price remains well below $10 we won't see new miners, and if it stays around $5 only North Americans can afford to mine for a rather meager return.

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September 14, 2011, 01:02:20 PM
 #23

I must be mining at a cheaper rate than 90% of the forum users because I'm still profitable at $3/coin at these difficulty levels. I'm not sure why any of you would stop.
I get electricity @ ~$.074/KWh, so I have no problem mining and keeping profitable for a long time (until we hit about $2/BTC at current difficulty). Difficulty decrease is pretty significant, too, however. Balances it out a bit. When BTC was over $20, the profits were utterly ridiculous for miners, and I knew I had to sell as much as I could because the price increase was unjustified. Now we're at a pretty reasonable profit rate -- still high, though, considering how little time it takes to maintain miners.

@Cluster2k I think people are betting on the future much more than you're assuming. We all knew BTC mining was becoming rapidly more difficult, so people were speculating and buying in, thinking the lower cost to "produce" BTC now would make it a good investment for when difficulty ramps up later. - And I think it's clear people were speculating based on how wildly volatile BTC was at the time. However, I think it eventually came clear to people buying in the hype that the cost to produce BTC even at a difficulty 5x what we're at now wouldn't justify how much they're paying. Now we're seeing people speculate again because of the strong downward trend in mining difficulty, I think, though the downward trend in price obviously has an enormous impact, too. People are getting nervous and selling, seeing the present trends and predicting a grim future. That's how stocks work, too, and people who trade against the news after the news' effect has peaked or dipped tend to see fantastic returns. It's rare for people to trade on fundamentals anymore, and instead we see a lot of chartists with self-fulfilling prophecies speculating. Some of us still have thousands in BTC who aren't willing to see another potential 50% drop in BTC value against gov't currencies, and the present trend is suggesting that's possible, so fickle people get out while they can. I'll be holding and mining, at least until we see what happens to price after the block reward halves.

Getting the fickle miners out of BTC may be good for the value of BTC long-term, I think. When the price drops for us in BTC long, we have no problem holding until demand increases. Less supply (all else assumed same) will result in a higher price. Upward trend encourages the masses to buy more, and that's when we can sell at a higher price, sticking the losses to the followers.

tl;dr - Sell high, buy low, fuck trends, trust fundamentals, never invest more than you're willing to lose and stay out of debt.

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BkkCoins
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September 14, 2011, 01:10:31 PM
 #24

... Now we're seeing people speculate again because of the strong downward trend in mining difficulty, I think, though the downward trend in price obviously has an enormous impact, too....
What strong downward trend? Maybe you're not talking about Bitcoin?

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September 14, 2011, 01:28:23 PM
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... Now we're seeing people speculate again because of the strong downward trend in mining difficulty, I think, though the downward trend in price obviously has an enormous impact, too....
What strong downward trend? Maybe you're not talking about Bitcoin?


Yeah I agree, not sure where you think there's a downward trend?  Yeah, it's going down a bit from the peak, something to the tune of around 7%, but that's after almost a 700% jump in the months prior.
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September 14, 2011, 04:13:30 PM
 #26

It's certainly very noticeable in terms of how much BTC I'm receiving/day (though I may be biased after expecting 20%+ less every time the difficulty shifts), and shows no sign of stopping right now. At any rate, it's the greatest downward trend ever in Bitcoin's history.

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September 14, 2011, 07:00:45 PM
 #27

I have found this chart interesting.

difficulty by itself really has no meaning for a miner.
USD:BTC by itself likewise really has no meaning.

What matter is price & difficulty.   
If price of BTC falls 90% and difficulty falls 90% I will make the same amount (in USD).
Likewise if price of BTC rises 500% and difficulty rises 500% I will still make the same amount (in USD).

Till now I haven't seen a good way to express that important relationship.

http://bitcoinx.com/charts/

This chart illustrates it well (showing daily revenue in dollars per 100MHash/s).
http://bitcoinx.com/charts/chart_large_lin_30d.png

Long term we would expect this trend to fall continually because the cost to produce 100MHash/s rig continually falls (faster and cheaper GPU due to Moore's law).


Great chart by the author (although I think changing the unit to GH/s might be more applicable today).


GPUs don't follow Moore's law.
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September 14, 2011, 07:05:49 PM
 #28

GPUs don't follow Moore's law.
Butterflies don't follow gravity.

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September 14, 2011, 11:04:55 PM
 #29

Yes they do.  Transistor density in GPU (and thus hashing power) has doubled roughly every 24 months.  If anything GPU development more perfectly follow Moore's law.

I thought Moore's Law said something about 18-months, not 24-months.  

Either that or "anything that can go wrong will go wrong" or something like that.

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September 15, 2011, 12:28:24 AM
 #30


If hypothetically bitcoin fell to <$5 and stayed CONTINUALLY under $5 for 30 days (long enough for miners to get next electric bill) you likely would see some behavior change.

That's the key right there.  Most people will stick it out at least until the next power bill hits and maybe even for two bills, hoping to see a turnaround in price or drop in difficulty that will keep mining profitable.  There's definitely some people out there that will continue to mine regardless, but I bet some of the power goes dark after a while.  For example, I'm running 11 GH or so and it's costing about $500/month with a great .085 cents/kwh power rate.  If it gets unprofitable for me I'll still probably keep a GH or two running to help the network, but I can't afford to throw $400-$500 at it each month with no return for very long.

People need to factor in that winter is coming in the Northern Hemisphere as well. Both European and US miners will be turning back on as there is no other spaceheaters with a return, except the aforementioned marijuana farm. I used to dump my grow exhaust into the house in winter, to my ladyfriend's chagrin (she doesn't partake). It kept things warm at no additional cost, but you don't run odor control like ozone (toxic) while you are blowing into your living space so the house tended to get a bit fragrant.

I know here in Los Angeles (on LADWP at least), electricity rates also drop beginning in September, almost halving my cost per kwhr. Thank god for public utilities. My friend on Edison (the private one) pay almost triple my rate and are only 15 miles away...

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September 15, 2011, 01:42:01 AM
 #31

GPUs don't follow Moore's law.

Yes they do.  Transistor density in GPU (and thus hashing power) has doubled roughly every 24 months.  If anything GPU development more perfectly follow Moore's law.

Do you mean potential hashing power? Because transistor count and hashing power are not directly correlated, as noted by the 2billion transistors of RV870 monstrously crushing fermis 3billion transistors in hashing power.
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September 15, 2011, 04:46:46 AM
 #32

GPUs don't follow Moore's law.

Yes they do.  Transistor density in GPU (and thus hashing power) has doubled roughly every 24 months.  If anything GPU development more perfectly follow Moore's law.

Do you mean potential hashing power? Because transistor count and hashing power are not directly correlated, as noted by the 2billion transistors of RV870 monstrously crushing fermis 3billion transistors in hashing power.

+1 Moore's law doesn't really apply to GPUs because for their different architecture nature than CPUs, Moore is more into RISC and CISC architectures.
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September 15, 2011, 05:12:40 AM
 #33

Moore's law applies to all technology, not just CPU's and transistors. Of course it would apply to GPU's. Despite their different architecture... I am not familiar enough with it to argue with you on the specifics... but new generations of technology make development of subsequent, more powerful, technology possible. That is the essence of the way moores law should be understood. Not a precise relation to CPU speeds.

Either that or "anything that can go wrong will go wrong" or something like that.

That's "Murphy's Law" you are thinking about. Anything that can potentially go wrong, WILL go wrong. Essentially. I love this law, as it is true on so many levels. I've spent way too much time thinking about it, probably because my own surname is Murphy and I am a narcissist.  Smiley

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September 15, 2011, 08:17:28 AM
 #34

half the electric used for mining put into a more profitable venture. You can even recycle your parts lol look at the computer fan on the right lol



I would like to say this is a joke and I don't cultivate cannabis Cheesy I took this picture from google images.

Growing coral is somewhere up in the mix as far as using electricity to make money.  There is a lot of coral that goes for $200 a frag -- some only approx. 1 square inch.  I'm about to get back into the saltwater reef hobby, but not to make money.  Just a little 1.5 gallon pico.

These all go for $200+ and are just the tip of the iceberg.  The disc they are glued on to is 1-2" in diameter.




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September 15, 2011, 08:31:28 AM
 #35

Growing coral is somewhere up in the mix as far as using electricity to make money.  There is a lot of coral that goes for $200 a frag -- some only approx. 1 square inch.  I'm about to get back into the saltwater reef hobby, but not to make money.  Just a little 1.5 gallon pico.

These all go for $200+ and are just the tip of the iceberg.  The disc they are glued on to is 1-2" in diameter.

Nice. Where would I find out more about this? Is there a hobbyist site?
What is the connection with using electricity?

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September 15, 2011, 10:49:35 AM
 #36

Growing coral is somewhere up in the mix as far as using electricity to make money.  There is a lot of coral that goes for $200 a frag -- some only approx. 1 square inch.  I'm about to get back into the saltwater reef hobby, but not to make money.  Just a little 1.5 gallon pico.

These all go for $200+ and are just the tip of the iceberg.  The disc they are glued on to is 1-2" in diameter.


That is really cool.

A little squidoo entry I found on growing coral:

http://www.squidoo.com/coralgrowing
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September 15, 2011, 01:11:56 PM
 #37

And then you have those with electric heating and winter coming on soon. No reason not to mine to heat the house...

Yeah the temps already dropped to freezing last night here in Chicago  Shocked  I may need to pick up another 5970 to heat my whole apartment hehehe.....Actually that would be quite an expensive space heater!  My 5970 sure does love the cold weather though, they are VERY affected by ambient temps compared to other cards.  At full load they were mining at 62C (same as my 5830s and 6950s which was shocking to see) with a room temp of 58C.

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September 15, 2011, 04:00:14 PM
 #38

Growing coral is somewhere up in the mix as far as using electricity to make money.  There is a lot of coral that goes for $200 a frag -- some only approx. 1 square inch.  I'm about to get back into the saltwater reef hobby, but not to make money.  Just a little 1.5 gallon pico.

These all go for $200+ and are just the tip of the iceberg.  The disc they are glued on to is 1-2" in diameter.


That is really cool.

A little squidoo entry I found on growing coral:

http://www.squidoo.com/coralgrowing

Am I the only one that thinks it's funny that there's a SQUIDoo lens about CORAL?
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September 15, 2011, 04:40:30 PM
 #39

half the electric used for mining put into a more profitable venture. You can even recycle your parts lol look at the computer fan on the right lol



I would like to say this is a joke and I don't cultivate cannabis Cheesy I took this picture from google images.

Growing coral is somewhere up in the mix as far as using electricity to make money.  There is a lot of coral that goes for $200 a frag -- some only approx. 1 square inch.  I'm about to get back into the saltwater reef hobby, but not to make money.  Just a little 1.5 gallon pico.

These all go for $200+ and are just the tip of the iceberg.  The disc they are glued on to is 1-2" in diameter.


Hilariously enough, I farm coral as well as the ganj. Nowhere near as profitable as growing dope, and takes a HELL of a lot more time and effort. You need a ton of space to make a profit. Reefer takes 3.5 months to mature, most of those coral frags were grown out for a year at least, with a lot of expensive consumables sustaining them, not to mention having to procure the original genetics for highway robbery prices.

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September 15, 2011, 05:08:48 PM
 #40

The thing is both require effort, mining does not.

First they ignore you, then they laugh at you, then they keep laughing, then they start choking on their laughter, and then they go and catch their breath. Then they start laughing even more.
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