50 BTC Per Block to 25 in 2012 !?!?!?!?!

[humanage]

I read somewhere that the number of bitcoins in a generated block will fall from 50 to 25 in the later half of 2012! What should we be expecting? I'm guessing deflation, but will mining still be worth it?

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[torusJKL]

We can only speculate.

Bitcoin could go up because it will be harder to get them.
Bitcoin could stay the same and some miners will stop their rigs because it is not worth it anymore.
Or something in between.

By the way one ? in the title would have been enough. !?!?!?!?! is clearly annoying.

[RaTTuS]

We can only speculate.
.... !?!?!?!?! is clearly annoying.

yeah - I'd go for up up up - so start buying now!!!
 

[humanage]

By the way one ? in the title would have been enough. !?!?!?!?! is clearly annoying.

Sorry, it really worried me as I spent 2 months savings on a mining rig and didn't want it to go to waste.

[Nickers]

Sorry, it really worried me as I spent 2 months savings on a mining rig and didn't want it to go to waste.
[/quote]

I know what you mean, I'm thinking of investing in a rig myself

[this time]

Realistically, when it happens a bunch of people will shut down their rigs b/c of electricity costs, then the difficulty will go down. So although the blocks will be only 25btc it will be easier to get them. Similar to what happened when the $ value of the btc crashed.

[dree12]

Realistically, when it happens a bunch of people will shut down their rigs b/c of electricity costs, then the difficulty will go down. So although the blocks will be only 25btc it will be easier to get them. Similar to what happened when the $ value of the btc crashed.

Since June, the dollar value of bitcoin has collapsed to 20% of what it was before. The difficulty is currently 200% of what it was in June. This means that buying new rigs right now is likely going to be very unprofitable.

[WhatsHappening]

Realistically, when it happens a bunch of people will shut down their rigs b/c of electricity costs, then the difficulty will go down. So although the blocks will be only 25btc it will be easier to get them. Similar to what happened when the $ value of the btc crashed.

Well, there're about 7200 new BTC mined each day. Let's assume that about half of them is to be sold, which makes constant supply pressure on market. As a result, the bitcoin price may get doubled. 25, 50 are just nominals which does not correspond to market value. Difficulty may remain on the same level.

[DeathAndTaxes]

Realistically, when it happens a bunch of people will shut down their rigs b/c of electricity costs, then the difficulty will go down. So although the blocks will be only 25btc it will be easier to get them. Similar to what happened when the $ value of the btc crashed.

Since June, the dollar value of bitcoin has collapsed to 20% of what it was before. The difficulty is currently 200% of what it was in June. This means that buying new rigs right now is likely going to be very unprofitable.

Looking at it from the unsustaible mass media bubble induced prices is silly.  In June if difficulty and price had remained constant the annual ROI (@ $0.10 electricity) was about 8000%.  Do you know any other investment where you can make 8000% on your capital by plugging in some computers?

It was a bubble and it broke.  Mining can be profitable without ever returning to those unsustainable levels.

[LoupGaroux]

Realize that from January of 2011 to June the value had skyrocketed to absurd levels. The difficulty and price corrections were a natural market force brought about by a bubble. Will the values and difficulty bounce around? Yes. Will the reduction to 25 affect things? Not as much as feared, as the much-touted transaction fees will begin to come into play, and the market will begin to mature.

Should you maybe do your homework before dropping thousands on a mining rig? Probably. If you are fearing FPGA killing the market you are not ready for a rig. Spend a year or so playing the exchanges. Mining was never intended to be the be all end all of the bitcoin economy, it is merely the production source, and has been running too hot for the better part of a year. Take the mining rig money and invest in contracts or options and play the float, without the hard investment in physical assets that will burn up, and always be at the mercy of electricity costs.

[Beaflag VonRathburg]

By the way one ? in the title would have been enough. !?!?!?!?! is clearly annoying.

Sorry, it really worried me as I spent 2 months savings on a mining rig and didn't want it to go to waste.

And decided to research what you were getting into after buying the rig?

Mining will balance itself out (with or without the block reward halving), the most efficient miners will stay profitable, the others will shut down.

I'm wondering though, how many people would you actually quantify as having efficient miners? I think this is going to be the major long term test for BTC's survival. I'm on the more expensive end at $.125 KWH and in a rush to get my miners up and running. My goal is to break even before the reward drop. If the market can survive, I'll keep mining as long as it is profitable.

[Highway 596]

What's for certain is that we can look forward to a market flood of used-up video cards in about a year's time as the miners cash out the last value of their now-unprofitable rigs

[LoupGaroux]

By the way one ? in the title would have been enough. !?!?!?!?! is clearly annoying.

Sorry, it really worried me as I spent 2 months savings on a mining rig and didn't want it to go to waste.

And decided to research what you were getting into after buying the rig?

Mining will balance itself out (with or without the block reward halving), the most efficient miners will stay profitable, the others will shut down.

I'm wondering though, how many people would you actually quantify as having efficient miners? I think this is going to be the major long term test for BTC's survival. I'm on the more expensive end at $.125 KWH and in a rush to get my miners up and running. My goal is to break even before the reward drop. If the market can survive, I'll keep mining as long as it is profitable.

Crunch some hard numbers on your payback matrix on trying to get ahead of the curve on payback. At $.125 kWh you are running 55% higher than my cost of electricity and I am already looking at over one year to break even if I created a new rig today. Rigs burn out, parts fail, electricity gets more expensive, and the resale value of your parts diminishes rapidly once it is a generation (or two) old. Nobody is lining up to be used 4000 and 5000 series Radeon cards at anything over 10 cents on the dollar, and the 6000 series will be in the toilet within the year.

If you are comfortable with the long term play, and realizing that you are tying up money in hard assets that will take 2 years or more to break even... go for it. But don't be fooled into thinking that another skyrocket is around the corner.

[Timo Y]

I read somewhere that the number of bitcoins in a generated block will fall from 50 to 25 in the later half of 2012! What should we be expecting?

In theory, when an event is 100% predictable, the market should adjust to that long before the event and there will be no unusually extreme price swings on the actual date of the event.

In practice, some of the traders are irrational, gullible, or just plain ignorant about how bitcoin works.

I'm guessing deflation, but will mining still be worth it?

Mining will always be worth it for SOME miners.  The question is: For how many?

[humanage]

By the way one ? in the title would have been enough. !?!?!?!?! is clearly annoying.

Sorry, it really worried me as I spent 2 months savings on a mining rig and didn't want it to go to waste.

And decided to research what you were getting into after buying the rig?

Mining will balance itself out (with or without the block reward halving), the most efficient miners will stay profitable, the others will shut down.

I'm wondering though, how many people would you actually quantify as having efficient miners? I think this is going to be the major long term test for BTC's survival. I'm on the more expensive end at $.125 KWH and in a rush to get my miners up and running. My goal is to break even before the reward drop. If the market can survive, I'll keep mining as long as it is profitable.

Crunch some hard numbers on your payback matrix on trying to get ahead of the curve on payback. At $.125 kWh you are running 55% higher than my cost of electricity and I am already looking at over one year to break even if I created a new rig today. Rigs burn out, parts fail, electricity gets more expensive, and the resale value of your parts diminishes rapidly once it is a generation (or two) old. Nobody is lining up to be used 4000 and 5000 series Radeon cards at anything over 10 cents on the dollar, and the 6000 series will be in the toilet within the year.

If you are comfortable with the long term play, and realizing that you are tying up money in hard assets that will take 2 years or more to break even... go for it. But don't be fooled into thinking that another skyrocket is around the corner.

OP here, I did research, making decent money already. I knew about the 50-25 drop, but decided  to ask some opinions. Anyways, I know mining will still be profitable for some, I pay a fixed power bill!

[schnell]

Bitcoin could stay the same and some miners will stop their rigs because it is not worth it anymore.

There may be miners stopping, but there will always be people starting, wanting to learn this whole new way to literally 'make' money; so the amount of miners will only ever change in the short term.

[DeathAndTaxes]

Nobody is lining up to be used 4000 and 5000 series Radeon cards at anything over 10 cents on the dollar, and the 6000 series will be in the toilet within the year.

Ahem Ahem

http://www.ebay.com/sch/i.html?_nkw=HD+5970

Honestly I wish I could get them for 10 cents on the dollar.  Hell I would take 25 cents on the dollar in a heartbeat.


I agree with the general idea of your post though.  Still I believe <1 year return on investment is possible even on a $0.125 per kWh.  The key points are don't buy what you don't need. Buy used GPU (they hold their value better), 80-Plus Gold or go home, and Linux. 

If you build a rig that is 2.5MH/W even at $0.125 at current price & difficulty gross revnue is about 300% of electrical cost.  As long as that holds it is possible to build new rigs.  Once then dips to <200% FPGA is likely the only option going forward.

[DeathAndTaxes]

Bitcoin could stay the same and some miners will stop their rigs because it is not worth it anymore.

There may be miners stopping, but there will always be people starting, wanting to learn this whole new way to literally 'make' money; so the amount of miners will only ever change in the short term.

Difficulty is still 30% lower than the peak.  While new people may be joining if the rate of people leaving and joining in terms of hashpower are equal then difficulty will remain static. 

As a miner we don't care about the number of miners only the network aggregate hashpower.

[DeathAndTaxes]

I'm wondering though, how many people would you actually quantify as having efficient miners? I think this is going to be the major long term test for BTC's survival. I'm on the more expensive end at $.125 KWH and in a rush to get my miners up and running. My goal is to break even before the reward drop. If the market can survive, I'll keep mining as long as it is profitable.

My two tests are...
a) is your electrical cost <$0.10 per kWh
b) is your rig capable of >2 MH/W.

You already have one strike against you but $0.125 per kWh gives you more options than say $0.28 per kWh (some European nations).

Efficient rig design comes from:
a) don't buy shit you don't need (aftermarket coolers, SSD/HDD, any CPU > sempron, gamer cases, etc)
b) get as much hashing power possible on 1 rig.  <1.5 GH per rig is worthless.  >2 GH per rig should be your goal
c) 80-Plus Gold.  If you look at the prices of a gold PSU and are tempted to buy some cheap shit then just stop mining isn't for you
d) efficient used 5000 series cards. 
e) No windows.  Hey I am a Microsoft SQL Server developer by occupation and I know when to not use Windows.  Linux on USB stick if you are unwilling to learn then don't waste your money handicapping yourself.

It is possible but they days of slapping together any two cards on a 70% efficient PSU in a retrofitted gamer case are over.  If you try you will be the marginal miner.

Honestly I should stop helping people.  More marginal miners = more cushion to my cashflow. 

[cbeast]

I'm wondering though, how many people would you actually quantify as having efficient miners? I think this is going to be the major long term test for BTC's survival. I'm on the more expensive end at $.125 KWH and in a rush to get my miners up and running. My goal is to break even before the reward drop. If the market can survive, I'll keep mining as long as it is profitable.

b) is your rig capable of >2 MH/W.

if you have a 1000W system, what GPUs will give you > 2 MH/W?