What will you do when the gold rush ends?

[JennyHill]

mining was never intended to be a gold rush in the first place.

you weren't around last april or may, were you?  new rigs were paying for themselves in like six to eight weeks, including the electricity costs: http://blockchain.info/charts/miners-operating-profit-margin

Obviously you don't understand the intent behind mining and I've been around a lot longer than you think.

[1714020675]

1714020675

[1714020675]

1714020675

[1714020675]

1714020675

[notme]

mining was never intended to be a gold rush in the first place.

you weren't around last april or may, were you?  new rigs were paying for themselves in like six to eight weeks, including the electricity costs: http://blockchain.info/charts/miners-operating-profit-margin

Too bad those figures are simplistic.  Can you acquire equipment and start mining instantly?  Didn't think so.  Is there any guarantee that the price will hold up in the week it takes to acquire the equipment, let alone the 6-8 weeks you expect to pay it off in?  Don't get me wrong, mining was profitable during that time frame, but that was far from certain at the time.  If you timed it exactly right, you might have had a 6-8 week payout, but hindsight is 20/20.  In reality, any profit is commendable, and profit is still available with arguably more certainty now than back then.

[koin]

you don't understand the intent behind mining

well, to bootstrap a currency bits of it need to find their way into the hands of as many as possible.  since a 51% attack is enormously disruptive, if not fatal, to bitcoin it makes sense that new currency is issued to those who can help lessen the risks of that happening -- the miners.

now since there is no guarantee that mining is profitable, engaging in mining is a risk-taking activity.  for some, mining is a hobby or a side interest.  they don't see it as a gold rush.   some others though, are still using hardware they might already have had (e.g., gaming rig) and benefiting from a fortunate situation regarding electricity (either included in rent, parents, dorm, etc.).  to them, this is a gold rush -- in exchange for a little bit of effort some bits of money keep coming in without the having to "work" (in the traditional sense of the word) to obtain them.

and that will likely end as the daily block reward drops by half.

[JennyHill]

you don't understand the intent behind mining

well, to bootstrap a currency bits of it need to find their way into the hands of as many as possible.  since a 51% attack is enormously disruptive, if not fatal, to bitcoin it makes sense that new currency is issued to those who can help lessen the risks of that happening -- the miners.

now since there is no guarantee that mining is profitable, engaging in mining is a risk-taking activity.  for some, mining is a hobby or a side interest.  they don't see it as a gold rush.   some others though, are still using hardware they might already have had (e.g., gaming rig) and benefiting from a fortunate situation regarding electricity (either included in rent, parents, dorm, etc.).  to them, this is a gold rush -- in exchange for a little bit of effort some bits of money keep coming in without the having to "work" (in the traditional sense of the word) to obtain them.

and that will likely end as the daily block reward drops by half.

Transaction recording, or mining, is the process of adding transaction records to Bitcoin's journal of past transactions. This journal of past transactions is called the block chain as it is a chain of blocks. The block chain serves to confirm those transactions to the rest of the network as having taken place. Through this public journal, Bitcoin nodes can distinguish legitimate Bitcoin transactions from attempts to respend coins that have already been spent elsewhere.

Mining is intentionally designed to be resource-intensive and difficult. Individual blocks must contain a proof of work to be considered valid and this proof of work is always verified by other Bitcoin nodes.

When a block is discovered, the discoverer may award themselves a certain number of bitcoins, which is agreed-upon by everyone in the network. Currently this bounty is 50 bitcoins; this value will halve every 210,000 blocks. See Controlled Currency Supply.

Additionally, the miner is awarded the fees paid by users sending transactions. The fee is an incentive for the miner to include the transaction in their block. In the future, as the number of new bitcoins miners are allowed to create in each block dwindles, the fees will make up a much more important percentage of mining income.

http://bitcoin.org/bitcoin.pdf
Let me direct your attention to page 3.

[koin]

Let me direct your attention to page 3.

allow me to direct your attention to the dictionary: http://dictionary.reference.com/browse/gold+rush

"a large-scale migration of people to a territory where gold has been found"

next i show a chart:



see that little jump from may to july?  that happened because those mining from april to june were making money like crazy, and others rushed in as they wanted a piece of it too.  that's the bitcoin gold rush era.

it matters not to a miner that block rewards occur at a fixed, predetermined rate and doesn't change (at least not significantly) regardless of how many miners there are.  to a miner it matters only that the price is high enough and the difficulty is low enough so that buying electrons and sending them through the gpu gauntlet results in profit.

when that profit is large, a gold rush follows.
when that profit is small, or cannot be obtained, the boom goes bust.

the block reward concept serves two purposes. it bootstraps the currency and also is the incentive to get miners participating so that attaining 51% would be something very difficult.   the fact that some miners who happen to have been lucky on their timing gained a nice bit of wealth as a result is not a concern, or flaw, for bitcoin.

but there's a 50% drop in daily btc generation coming -- that's a fact.   whether or not we are still in a boom is depends on individual factors but the squeeze from the upcoming drop to 25 btc will cause many miners to see it as a bust.

[JennyHill]

Did you understand my original post? Here it is again just in case you missed it. If you really consider bitcoins gold then there will be many “gold rushes” yet to come because what you are attempting to describe is market trends unrelated to mining.  

Usage spiked because of a Gawker article posted about the use of bitcoin to purchase drugs online in June 2011.

There will be many other temporary investment spectacles that follow and I believe any one of them can cause the spike in the user base you observed.  

How long have you been here anyway? Obviously, I’ve been here longer.

 

The gold rush won’t end when the reward halves because mining was never intended to be a gold rush in the first place. It’s simply an incentive system to secure the network, not a get rich quick scheme.

[JennyHill]

How long have you been here anyway? Obviously, I’ve been here longer.

 

Where is the unsubscribe feature, mods (seriously, I don't know how to remove a thread from my "Show new replies to your posts" tab)?

I can't watch this pissing contest any longer.

Delete your posts in this thread and you won’t have to see it anymore. This version of Simple Forum doesn’t allow for that.

[MoneyIsDebt]

I don't really mine, since my electric bill gets too high - but I do hope this will spread mining out a bit. A few huge pools controlling all the mining makes Bitcoin centralized and insecure, as opposed to... well, the opposite, as it was supposed to be.

[never2sleep]

I'm simply going to save my bitcoins because I can't manage to save my dollars.  $_$

[Nim]

Usage spiked because of a Gawker article posted about the use of bitcoin to purchase drugs online in June 2011.

That's an interesting theory. Do you have any proof other than post hoc ergo propter hoc?

[Miner612]

JennyHill

You offer nothing of value to this discussion.  Please stop.  This is not an argument of your opinion on the phrase 'gold rush'  -- you god damned n00b woman.

Thanks,

Men everywhere.

[JennyHill]

JennyHill

You offer nothing of value to this discussion.  Please stop.  This is not an argument of your opinion on the phrase 'gold rush'  -- you god damned n00b woman.

Thanks,

Men everywhere.

http://gawker.com/5805928/the-underground-website-where-you-can-buy-any-drug-imaginable

http://thinkd2c.wordpress.com/2011/06/02/bitcoins-silk-road/

http://www.hyperink.com/Criticisms-Of-Bitcoin-b96a267

Why does every man with a tiny penis need someone else to do his research? Is it because you’re used to women washing your clothes and cooking you dinner? Is it too tiring to research for yourself after spending an hour or two looking for your tiny dick?
 
Just because I decided not to hang out with you trolls until now doesn’t mean I haven’t been using bitcoin for the last year.

Dumb Ass (can I call you by your first name) there is no gold rush and never was. There was a temporary spike in usage which caused a bunch of other people named Dumb Ass to buy a bunch of video cards that require months to pay off thinking they could pay them off in only a short time mining and buy drugs with the profit. Except this system wasn't designed to buy drugs with mining. Then the bubble burst and reality set in they realized this isn’t a gold rush it’s a welfare line and subsidies are hard to come by because it will take months of mining at any rate to pay off any video card or buy good drugs. It will take just as long to pay off a $600 FPGA miner when it can produce roughly 18BTC a month at 800mhash or $90 before electricity cost given the current difficulty.

Stupid small dicked nOOb!

[Nim]

The Gawker article was on June 1st. The hash rate run up began in the beginning of May as clearly shown in the graph above. But even if the run up happened after the Gawker article, you still haven't proved cause and effect. Luckily we have a nice little time capsule here:

https://bitcointalk.org/index.php?topic=1958.180

From that we can see approximately what articles came out and when. We can see that the run up coincided with mentions in big places such as Forbes and NPR. Did the Gawker article contribute? Probably. Was it just one of many mainstream articles and mentions that came out about Bitcoin around May and June, all of which had an effect? More likely.

[JennyHill]

The Gawker article was on June 1st. The hash rate run up began in the beginning of May as clearly shown in the graph above. But even if the run up happened after the Gawker article, you still haven't proved cause and effect. Luckily we have a nice little time capsule here:

https://bitcointalk.org/index.php?topic=1958.180

From that we can see approximately what articles came out and when. We can see that the run up coincided with mentions in big places such as Forbes and NPR. Did the Gawker article contribute? Probably. Was it just one of many mainstream articles and mentions that came out about Bitcoin around May and June, all of which had an effect? More likely.

I know. Much of it was the effect from many areas of combined initial awareness. I was just trying to get under his skin because he's such a prick and let him know that only fools would have considered bitcoin mining a gold mine.