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Author Topic: If you're mining at around break even prices, STOP!  (Read 4410 times)
norulezapply
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October 30, 2011, 10:53:47 PM
 #1

This is probably stating the obvious, but I felt it should be posted anyway..

If you're running a miner and only making a few cents profit or perhaps just breaking even and hoping for the price to go up, then please, STOP!
You should really be BUYING BTC instead.

If you stop mining at break even and start buying BTC instead:

+ you are raising the demand of BTC by eating up some of the sell orders
+ you are lowering the difficulty of mining


Other things to note:

+ you have effectively "zero variance", you can control how many coins you want every day.
+ you can put your bitcoin hardware to other uses (I pointed mine towards folding@Home)


Perhaps it's only me personally that thinks that all of these things are a good idea, but I thought I'd share it anyway.

With regard to network security, there are a lot of people that are still making profit with FPGAs and cheap/"free" electricity which will help to hold the network up, so I wouldn't worry about this.

Thoughts?

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October 30, 2011, 11:01:59 PM
 #2

This is probably stating the obvious, but I felt it should be posted anyway..

If you're running a miner and only making a few cents profit or perhaps just breaking even and hoping for the price to go up, then please, STOP!
You should really be BUYING BTC instead.

If you stop mining at break even and start buying BTC instead:

+ you are lowering the rate of inflation AKA the rate of new coins being created. This is good as it means less coins are flooding the market.
+ you are raising the demand of BTC by eating up some of the sell orders
+ you are lowering the difficulty of mining


Other things to note:

+ you have effectively "zero variance", you can control how many coins you want every day.
+ you can put your bitcoin hardware to other uses (I pointed mine towards folding@Home)


Perhaps it's only me personally that thinks that all of these things are a good idea, but I thought I'd share it anyway.

With regard to network security, there are a lot of people that are still making profit with FPGAs and cheap/"free" electricity which will help to hold the network up, so I wouldn't worry about this.

Thoughts?

I agree with this. I am buying as much as I can for the next ride to $30 and beyond. Remember $100 by Christmas ? It can still happen folks.
DeathAndTaxes
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October 30, 2011, 11:03:18 PM
 #3

It doesn't lower rate coins are produced.  Difficulty re-adjusts every 2 weeks to keep rate of coin generation relatively constant.

Lower difficulty = lower hashing rate = network more vulnerable to attack.

Profits aren't the only reason that people support the network with hashing power.  I don't feel it is your (or anyone elses) place to tell miners to stop because they are mining at break even (or even at a loss).
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October 30, 2011, 11:36:43 PM
 #4

Quote
Profits aren't the only reason that people support the network with hashing power.
this
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October 31, 2011, 12:32:38 AM
 #5

A couple of thoughts...

This will push the volatility to mining, which might cause some interesting and refreshing feedback in discussion groups. (God damn speculative miners!)

It might be great for the Bitcoin economy and give 2nd phase adopters a change to jump in and see what innovation they can come up with.

It would distribute the inflation across more people (the 2nd phase adopters) and strengthen the economy.


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October 31, 2011, 12:35:04 AM
 #6

I agree with this. I am buying as much as I can for the next ride to $30 and beyond. Remember $100 by Christmas ? It can still happen folks.

I bought a few at $27. If you'd like to split the difference I'll sell you half of those for $13.50 and we can ride to the top together. 8D (I'm with you, long on Bitcoin)

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October 31, 2011, 12:54:48 AM
 #7

If you stop mining at break even and start buying BTC instead:

+ you are lowering the rate of inflation AKA the rate of new coins being created. This is good as it means less coins are flooding the market.
+ you are raising the demand of BTC by eating up some of the sell orders
+ you are lowering the difficulty of mining


As someone already pointed out, the number of coins is near-constant, so you will have little, if any, effect on the rate of inflation.

You will eat some sell orders, however, the coins you would have mined will now go to someone else who will probably put them on the exchange, so you aren't affecting things as much as you think.

By lowering the difficulty of mining you are weakening the network.  Not by very much, but it does make it slightly easier to attack.
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October 31, 2011, 01:44:24 AM
 #8

Profits aren't the only reason that people support the network with hashing power.  I don't feel it is your (or anyone elses) place to tell miners to stop because they are mining at break even (or even at a loss).

Yes, thank you. Helps strengthen my FX and precious holdings and few are the wiser

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October 31, 2011, 07:26:59 AM
 #9

Please use the Search feature. This topic has been posted many many times in the past.  No need to repost an old topic again.

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norulezapply
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October 31, 2011, 06:09:03 PM
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It doesn't lower rate coins are produced.  Difficulty re-adjusts every 2 weeks to keep rate of coin generation relatively constant.
Yeah, a slight oversight on my part. I'll ammend my post.

Quote from: DeathAndTaxes
Profits aren't the only reason that people support the network with hashing power.  I don't feel it is your (or anyone elses) place to tell miners to stop because they are mining at break even (or even at a loss).
I know it's not. And I know that it's not anyone elses either. It's against the whole idea of freedom which Bitcoin carries. I just felt that I should share my thoughts on the matter because it appears that not everyone realises these simple facts. Whether anyone adopts them or not is up to them.

Quote from: BeeCee1
By lowering the difficulty of mining you are weakening the network.  Not by very much, but it does make it slightly easier to attack.
Yes, but the price of Bitcoin falling will naturally push (some) miners off the system anyway, which is something bigger to be worried about than this albeit similar. I don't want to damage the network. I know there are plenty of people that will keep on mining regardless, profit or no profit, so that is why I am not worried about network security. Most serious miners have relatively cheap electricity anyway so won't bother with this.

Quote from: BeeCee1
You will eat some sell orders, however, the coins you would have mined will now go to someone else who will probably put them on the exchange, so you aren't affecting things as much as you think.
Not necessarily correct. If I was a miner who was selling coins for a profit I would be putting them on the market anyway. If I was buying from the market, the coins I could have mined will go to someone else, yes, but there's no "probably" about them putting the coins straight on the exchange. If anything they would be hoarded for a while or used to pay for services. It is reducing the chances of them going on the exchange if anything and still eating up the sell orders, which is the main point here.

Please use the Search feature. This topic has been posted many many times in the past.  No need to repost an old topic again.
If you're going to clutter up the thread with pointless things like this atleast post links to the similar topics in question. I did a search and found nothing with regards to what I wanted to say, but if it has been posted in the past then the market has changed and it doesn't exactly hurt to re-iterate on these points which are probably buried in the forums by now which no-one will likely see again.

If my post helped, I'll happily accept a few bitmills!   15rGg6A1JFZV3b7TTbtpAaiYGdUD1e1oAm
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October 31, 2011, 07:40:27 PM
 #11

I agree, OP. I think, ultimately, buying bitcoins is much more beneficial to the currency than mining them at this point.

The arguments about mining to increase the security of bitcoin are technically true, but in practice, false. As for mining for "fun"? Aside from building the systems, I really don't understand what's fun about mining. Before I liquidated all my rigs, they were running totally independently for weeks/months at a time with no intervention from me whatsoever.
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October 31, 2011, 07:44:42 PM
 #12

The arguments about mining to increase the security of bitcoin are technically true, but in practice, false.

Care to explain?
johnj
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October 31, 2011, 07:44:51 PM
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The arguments about mining to increase the security of bitcoin are technically true, but in practice, false.

What does this even mean?

For instance, someone who has a lot of BTC has an interest in mining to secure their own holdings.  People also participate in folding@home, and there is 0 immediate return.  For others, mining at a current loss is equivalent of 'shorting' the money you pay for electricity to mine in the first place.

There are many reasons to mine below the 'break even' point.

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Gabi
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November 01, 2011, 02:38:19 PM
 #14

Folding@home? Are you joking?

ATI sucks with folding@Home

If you want to go distributed computing and you have ATI then crunch for projects like Milkyway@Home, Collatz or Moo! Wrapper, they run much better on ATI.

Folding is for nvidia and cpu. Not for ati. It's like mining bitcoins with a nvidia.
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November 01, 2011, 02:59:58 PM
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Folding@home? Are you joking?

ATI sucks with folding@Home

If you want to go distributed computing and you have ATI then crunch for projects like Milkyway@Home, Collatz or Moo! Wrapper, they run much better on ATI.

Folding is for nvidia and cpu. Not for ati. It's like mining bitcoins with a nvidia.

I didn't say anything about ATI vs Nvidia - I was speaking purely of the return.

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Dan The Man
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November 01, 2011, 03:02:38 PM
 #16

This is probably stating the obvious, but I felt it should be posted anyway..

If you're running a small retail business and only making a liveable income or perhaps just breaking even and hoping for the economy to improve, STOP!
You should really be working for someone else instead.

If you stop being self employed and start working for a company:

+ you are raising the demand for consumer goods by purchasing what you used to sell
+ you are making it easier for other businesses to compete

Thoughts?

Gabi
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November 01, 2011, 03:03:36 PM
 #17

Yup but bitcoin mining=ati, so if you use mining hardware on folding, it's using ati on folding. A  bad idea  Cheesy
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Gerald Davis


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November 01, 2011, 03:15:56 PM
 #18

Yup but bitcoin mining=ati, so if you use mining hardware on folding, it's using ati on folding. A  bad idea  Cheesy

Why?  If someone wants to support Folding then it doesn't really matter that they don't have the best "rig" for it.  Many people use AMD hardware (no more ATI) on Folding @Home.  They aren't ever going to be a top folder but they do it because they believe in the project and want to donate their computing power there (not to some other project).
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November 01, 2011, 05:10:24 PM
 #19

I prefer efficiency.

There are a lot of projects where ATI (i still call it ati because yes) is better than nvidia, crunching on folding is a bit wasting energy. A nvidia is much better on it.

Also, i said that because a lot of people know Folding but how many people know Milkyway? Collatz? Moo! Wrapper? And that on them ATI is much better than nvidia?
norulezapply
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November 01, 2011, 07:26:34 PM
 #20

This is probably stating the obvious, but I felt it should be posted anyway..

If you're running a small retail business and only making a liveable income or perhaps just breaking even and hoping for the economy to improve, STOP!
You should really be working for someone else instead.

If you stop being self employed and start working for a company:

+ you are raising the demand for consumer goods by purchasing what you used to sell
+ you are making it easier for other businesses to compete

Thoughts?
Incorrect, irrelevant and boring.

How can you compare running a small retail business to mining for Bitcoin?  Huh
Hah, they're completely different things..

If my post helped, I'll happily accept a few bitmills!   15rGg6A1JFZV3b7TTbtpAaiYGdUD1e1oAm
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