A few newbie questions

[Salavator]

Hi, all I have been trying to find out a bit about bitcoins but I still have a few questions:

1. Will mining become increasingly less profitable in the following years ?
2. Assuming you have no power costs then when (if not already) will it become unprofitable to mine?
3. Does the cpu contribute to mining hashes/s or just the graphics card(s) ?
4. If you are managing your own wallet then how do you go about buying and selling bitcoins ? Could you use a site like mtgox?
5. Lets say you install the bitcoin software on a live cd and generate a bunch of addresses, then how do you copy your wallet (where is the file located).
6. What are the predictions for the value of a bitcoin in the following years?
if you can answer any of the questions then your help would be appreciated.
thanks,

[1713570100]

1713570100

[1713570100]

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[Gabi]

1)no one know
2)never? if your expense are 0 then you will always be profitable... but, no power costs? Your parents pay the bill? Because well free power doesn't exist
3)Both, if you use the right miner. Problem, cpu mining is so slow that is almost useless. My quadcore make like 20mhash/s while my gpu make like 320...
4)yeah. Remember, always pay attention with your wallet, backup it and pay attention to virus and whatelse
5)dunno
6)no one know

[nmat]

1. No one really knows. Depends on a lot of stuff
2. It obviously depends on the costs/type of original investment... Some investments may never break even.
3. CPUs are irrelevant right now. Don't bother with them. Use only GPUs
4. Yes. Just transfer the coins to MtGox/TradeHill/CampBX and sell them.
5. Data directory: https://en.bitcoin.it/wiki/Data_directory
6. $1000000000.. Wait, no, I meant $0.01... No, that's not it. Maybe $10? $60? $0.97? $523?

[ZodiacDragon84]

1. once they reach the X block where you only get 25 Btc per payout, it would seem improbable that you would make a profit.
2.If you had a stream or solar or wind turbines on your property, and properly maintained them, and they were paid off, then you would have no problems with your electric bill. However, bitcoin mining is not very nice to your computer hardware, and you would likely have to buy (a) new card(s) before you could pay them off.
3. CPU mining seems to be mostly irrelevant at this point, and everybody is mining with GPUs
4.indeed. or tradehill, or other sites, etc. etc.
5.why would you install it to a live CD? I would suggest a flash drive. I am not sure why one would generate a bunch of addresses though...
6.my prediction of the value is that it will level off after people stop using bitcoins as a trade commodity like gold or silver, and start treating it like real currency. we need more sites that offer products and services for bitcoin to stabilize it. we need people who mine with big mining rigs to hold the coins, instead of converting them to cash on an exchange. instead of trying to get rich quick, treat it like you are going to work, and instead of dollars, your working for bitcoin. once people treat it as an actual currency, then the price will stabilize. Just a news thoughts

[Salavator]

I was thinking install it on a live cd so that there is no trace of it having ever existed on and it comes into no contact with a system that is possibly infected

[Bert]

1. once they reach the X block where you only get 25 Btc per payout, it would seem improbable that you would make a profit.

$ echo "4*365.25*24*6" | bc
210384
$ echo "8*365.25*24*6" | bc
420768
$
(the above numbers are once every 4 years, 365.25 days in a year, 24 hours in a day and 6 block every hour AKA one block every 10 minutes)

So after block number 210384 the Generation value will half to 25BTC per block. (circa 1 year 3 months from now)
And half again after block number 420768 to 12,5 BTC (circa 5 years 3 months from now)

But I'm inclined to agree with Gabi and nmat

1. No one really knows. Depends on a lot of stuff
... snip ...

[ZodiacDragon84]

Thanks for the math Bert! not much on coding myself, so your post helped drive the point home. what are the odds of a low power radeon showing up on the scene that works great for mining...lol

[Bert]

Thanks for the math Bert! not much on coding myself, so your post helped drive the point home. what are the odds of a low power radeon showing up on the scene that works great for mining...lol

I would find it hard to believe that AMD(ATI) have not noticed some rise in their profits recently and that they would not try and capitalise on it. But as to whether they can bring some low power product to market, at a price people are willing to pay, in less than a year is a different question.

[ThePiachu]

1. Will mining become increasingly less profitable in the following years ?
If more people will be using Bitcoins, then there will be more coins to earn in each block = more profit
If Bitcoins will be worth more = more profit
If less people will be mining coins, you will get more coins for mining = more profit
(supposing everything else will stay the same for those examples, a bit simplification)

2. Assuming you have no power costs then when (if not already) will it become unprofitable to mine?
You have to take into account the longevity of your hardware and its cost. If it earns more money during its life cycle than it cost you, it is profitable (although putting your money in the bank or investing in something else might earn you more). You can do your math at:
http://tpbitcalc.appspot.com/

3. Does the cpu contribute to mining hashes/s or just the graphics card(s) ?
CPU can contribute, but in most cases it's not much

4. If you are managing your own wallet then how do you go about buying and selling bitcoins ? Could you use a site like mtgox?
Send Bitcoins from your own wallet to the address given by mtgox, sell them there, get money from mtgox to your bank.

5. Lets say you install the bitcoin software on a live cd and generate a bunch of addresses, then how do you copy your wallet (where is the file located).
Probably in the same place as the wallet would normally be (depends on your os)

6. What are the predictions for the value of a bitcoin in the following years?
If you could predict that accurately, you would be rich then;). If people leave it, probably it will go down in value. If people will adopt it, it will gain value. So, do your best and spread the Bitcoin news to everyone you know!;)

[joulesbeef]

you can run your wallet off a livecd if you want, but you would have to be careful and make a new one before you use up 100 addresses. Of course the blockchain has to download somewhere.

there are also wallets on phones and such, which have less malware right now, and you could also store your coins on the exchanges, but that could be dangerous as we have seen the exchanges get hit but if you dont have many coins, then who cares. WHen I mined many of the alternative coins, I didnt use their clients at all, I simply sent all my coins to the exchanges as I mined them.

[Fjordbit]

2. Assuming you have no power costs then when (if not already) will it become unprofitable to mine?

One thing I wanted to add on here is that you have to consider opportunity costs. So if you have 3 high powered Radeon cards mining, it could still be technically profitable to mine with btc at $1.00 and difficulty at 1,700,000, but you need to consider the value of selling those cards on ebay and buying a treasury bond or some other investment. There is also the depreciation on the cards themselves, as gaming hardware doesn't hold up value very well over time.

[Fjordbit]

6. we need more sites that offer products and services for bitcoin to stabilize it.

It's more than just this. We really need a whole economy or at least some vertical economies. Part of the trouble is that people still need to buy their inputs in their local currency. The guy who is selling beef? He needs to get his feed in GBP. He has a whole bunch of other inputs too (land taxes, machine repairs, etc), but if he could switch over the majority of his inputs to bitcoin, then his prices could stabilize. But then the feed company would have inputs too and they would need to stabilize that.

I do agree it's the speculators that are pushing the price around too much, though.