The future of mining

[JohnFromWIT]

It might be too far off for most to really care about, but still.
When difficulty becomes so high that mining is only possible by hugely invested companies,
isn't it very likely that there will eventually be only a few companies capable of mining, possibly just one?
If becomes a line of business almost impossible to get into, but easy to go bust in.

[Yakamoto]

Well, there are some companies that allow for you to buy hashes already, such as cex.io.

[master-P]

It is a possibility I guess, we've already seen the mining game shift towards those who are more financially privileged and companies. I think if such a scenario became a reality, most people may opt to fork the blockchain and use a different hashing algorithm to break the monopoly on mining.

[Salmon1989]

In the past, everyone can use their gaming GPUs to mine bitcoin, and then they need to buy ASICs.
Soon, mining at home will be obsolete with the power limit (something like 20 amps?).
Bitcoin mining has become less and less decentralized.

[DolanDuck]

Maybe scrypt mining will last some more, but in the near future it will be unuseful to mine at home for us common mortals.

[JohnFromWIT]

Bummer.
I was hoping someone was going to explain why this couldn't happen.
Would you need majority consent to fork the blockchain?
Because I figure if it became a mainstream thing most users would have no interest in how it implemented
even when it negatively affects them.

[Salmon1989]

I was hoping someone was going to explain why this couldn't happen.
Would you need majority consent to fork the blockchain?
Because I figure if it became a mainstream thing most users would have no interest in how it implemented
even when it negatively affects them.

IMO, centralization could and would happen. I don't think it will be down to just one or a few mining entities though.
I agree with you that average Joe don't care much of the problem, and indeed many of them don't understand mining at all (like not many people are interested in knowing how international wire transfers are cleared).

[odolvlobo]

...
When difficulty becomes so high that mining is only possible by hugely invested companies,
...

I think your assumption here is wrong. A higher difficulty does not prevent someone from mining, it just lowers the revenue for a fixed hash rate.

Even as the difficulty rises, the cost of hashing drops. For example, today you can get a 2 GH/s miner for about $30. Two years ago, 2 GH/s would require 6 GPUs and cost you $3000.

[Glizlack]

I think people will consider to mine at home. Worst case scenario some alt coins then sell them for btc. But as the chips increase in speed and decrease in power draw that will still allow for smaller miners. Problem is roi becomes more typical of a normal investment and most here don't have the patience or desire to earn only 3% per year on 1000 dollars (or more) nor do I

Steve

[monim1]

Well, there are some companies that allow for you to buy hashes already, such as cex.io.

www.genesis-mining.com is one of them. You will get more information about them from https://bitcointalk.org/index.php?topic=602022.0;all

[vertak]

Isn't mining inherently "inflationary" because of things like Moore's law and technological progress? I say inflationary because just like a dollar today is worth less than a dollar in a year because of monetary inflation, a brand spanking new butterfly labs ASIC with 600GH rate is going to be less valuable in a year when that ASIC becomes outdated. Since buying large amounts of these mining devices is a large upfront cost, why would anyone ever choose to go this route?

[Peter882]

...
When difficulty becomes so high that mining is only possible by hugely invested companies,
...

I think your assumption here is wrong. A higher difficulty does not prevent someone from mining, it just lowers the revenue for a fixed hash rate.

Even as the difficulty rises, the cost of hashing drops. For example, today you can get a 2 GH/s miner for about $30. Two years ago, 2 GH/s would require 6 GPUs and cost you $3000.

Not only the price drops, the power drawn (per GH/s) is lower and it is easier to do the setup.

[blumangroup]

It might be too far off for most to really care about, but still.
When difficulty becomes so high that mining is only possible by hugely invested companies,
isn't it very likely that there will eventually be only a few companies capable of mining, possibly just one?
If becomes a line of business almost impossible to get into, but easy to go bust in.

Mining has become and will become more centralized.

I do not envision a time when one entity will control a majority of the mining capacity.

Even if one entity controls the majority of the mining capacity it would have an incentive to not attack the network (via a 51% attack) as they would have a lot of capital invested in their machines.

[CounterStrike]

It might be too far off for most to really care about, but still.
When difficulty becomes so high that mining is only possible by hugely invested companies,
isn't it very likely that there will eventually be only a few companies capable of mining, possibly just one?
If becomes a line of business almost impossible to get into, but easy to go bust in.

Actually, with the advancement on technology, companies are coming out really fast mining machine like 8 TH/s, soon there will be 50 TH/s machine and say bye bye to the old ASIC..

[Yuki1988]

It might be too far off for most to really care about, but still.
When difficulty becomes so high that mining is only possible by hugely invested companies,
isn't it very likely that there will eventually be only a few companies capable of mining, possibly just one?
If becomes a line of business almost impossible to get into, but easy to go bust in.

Actually, with the advancement on technology, companies are coming out really fast mining machine like 8 TH/s, soon there will be 50 TH/s machine and say bye bye to the old ASIC..

The current ASICs are in 28nm while the KnC Neptune pre-orders are claimed to be in 20nm, so the "advancement" in the future won't be as fast as a year ago.

[notlist3d]

It might be too far off for most to really care about, but still.
When difficulty becomes so high that mining is only possible by hugely invested companies,
isn't it very likely that there will eventually be only a few companies capable of mining, possibly just one?
If becomes a line of business almost impossible to get into, but easy to go bust in.

This will of-course always be some well funded farms.  I don't see it ever going to one huge company doing all of the mining.  If one would take over it would bring down value greatly.

There will always be personal miners.  Entry into market might be different, for example you really cant do much anymore if you have one video card and want to mine.  It takes of a investment.  As long as miner's are able to have ROI there will be a market.

[CEG5952]

There would be too much competition for there only to be one. But with the huge capital barriers to entry, it is conceivable that there would be a handful of major players that could, in theory, take control of the network if they colluded.

[Kprawn]

Real world scenario shows the same trend.

Just look at maize farming or milk farms. The Big guys are buying out the smaller farms, because the smaller farms, cannot farm profitably.

Other factors, like Big farmers, forking out for the best and most effective equipment, make their farms profitable.

Small profit margins and increase cost in energy, push farmers to sell their farms to the big guys.

Only thing, helping smaller farmers, are when governments subsidize smaller farmers with tax money.

It's going to happen with crypto mining too. Smaller "coin farmers" will have to buy hash power, from the big farmers, to be able to mine.

And investors, will follow the money, and invest in "big coin farmers" making them even stronger.

Only thing in my opinion, will be if ASIC technology becomes cheap enough, for everyone to mine. {Eg. Home users plug a USB memory stick, in their pc, and they mine coins, to pay for the electricity they use} In that way, the "big coin farmers" will have a huge amount of "smaller coin farmers" to compete with.

But that would push the price, of these "USB memory sticks" up, due to demand, and it will not become affordable, nor profitable. 

[Bernard Lerring]

That would be a good idea Kprawn.

If we could reach a point where it was possible for me to buy a small miner for under $100 that would plug into my home PC and generate enough BTC just to cover the electricity cost of running my PC I would definitely do that.

It would then cost me nothing to leave my PC running 24/7 and if it took off and millions of people embraced it we could have a large enought mining distribution to prevent a 51% attack.

In theory.

[Kprawn]

Only problem with the idea, are this:

1. The more people mining, increase the difficulty and less profitability for the miner.
2. The miner would constantly have to invest in more "USB memory sticks" or better and faster technology, making it less profitable.

Would have been a GREAT idea, if we did not have, the difficulty factor, to reckon with.

Imagine, a home pc owner, mining to pay his electric bill. His pc is linked to a exchange, the exchange, is linked to his bank account, the bank account is linked to his municipal account.

No electric Bill and extra income, while you surf the web, and playing games. It even makes money, when you sleep.

I would invest in that.