rpietila Calling the Bottom

[JayJuanGee]

Agree 100%. Anybody that's been around BTC for at least a couple of years has likely been there.

We're simply in an especially rough patch right now. There's no bubble which people have been promised and a lot of people who got into Bitcoin back in November 2013 are now panicking. They're the so-called lambs in this case. They need to work on their perseverance!

Would it NOT be a fairly rare scenario for someone to have gotten into BTC in November 2013 and maintained a $1100-ish average cost per BTC?  

I started in November 2013 with my first purchase of 1.24 BTC at $1200 per BTC; however currently my average cost per BTC is about $605 (including transaction costs).

I knew when I was getting into BTC that the price had gone up considerably in the months preceding my first purchase.  Accordingly, I only initially bought $1,500 worth of BTC which was only 5% of what I could have done, and I projected the remainder $28,500 over the next 6 months with rough dollar cost averaging.

Even though I had $30k at my disposal to get started, I would have been way too scared to plop down $30k at any $1000 + price point during that period, and maybe the smarter thing would have been to wait a month or two before getting started - but  few people really seemed to have any real clue about how high the upward momentum was going to go or last, so I wanted to get some skin in the game and to get started (even though the price seemed a bit inflated at the moment at $1200 per BTC).

(edited above to clarify and add a couple of details)

[molecular]

I would have been way too scared to plop down $30k at any $1000 + price point during that period, and maybe the smarter thing would have been to wait a month or two before getting started - but  few people really seemed to have any real clue about how high the upward momentum was going to go or last.

Noone knew how high it would go... you did pretty well I'd say.

[Melbustus]

...
Even if it's just a 50% chance it's another 10-bagger, it makes sense to hold at 660 (unless one desperately needs fiat, in which case one might want to consider selling now instead of putting it off, to be honest)
...

It's even more asymmetric than that. If there's >10% chance of a 10x, it makes sense to hold. And that's assuming 90% chance of going to $0.

For example, let's say there's a 20% of 10x, and 80% chance of complete failure:

( 0.20 )( 10 * 660 ) + ( 0.8 )( 0 ) = $1320 + 0 = $1320

That obviously doesn't include opportunity cost or time-value-of-money considerations, but the guts of the bitcoin investment thesis (like many investment theses with longish time-horizons) has always been, and still is, a simple weighted-avg expectation calc on the possible outcomes.

[molecular]

...
Even if it's just a 50% chance it's another 10-bagger, it makes sense to hold at 660 (unless one desperately needs fiat, in which case one might want to consider selling now instead of putting it off, to be honest)
...

It's even more asymmetric than that. If there's >10% chance of a 10x, it makes sense to hold. And that's assuming 90% chance of going to $0.

Yes, I'm aware. Thanks for pointing that out and for presenting the math. In my defense: I had actually edited the "50%" to "10%", then "~15%". Then I realized people might subconciously associate a "10% chance" with "10-bagger", so I left it at 50%, which is more in line with my expectations ;-). I'm growing increasingly aware of the fact that there exists an enormous suggestive potential "between the lines" and I'm trying to work with that, even if it means making an assertion less strong than it could be made.

[Melbustus]

...
Even if it's just a 50% chance it's another 10-bagger, it makes sense to hold at 660 (unless one desperately needs fiat, in which case one might want to consider selling now instead of putting it off, to be honest)
...

It's even more asymmetric than that. If there's >10% chance of a 10x, it makes sense to hold. And that's assuming 90% chance of going to $0.

Yes, I'm aware. Thanks for pointing that out and for presenting the math. In my defense: I had actually edited the "50%" to "10%", then "~15%". Then I realized people might subconciously associate a "10% chance" with "10-bagger", so I left it at 50%, which is more in line with my expectations ;-). I'm growing increasingly aware of the fact that there exists an enormous suggestive potential "between the lines" and I'm trying to work with that, even if it means making an assertion less strong than it could be made.

Yeah, I figured you likely did all the math fully several years ago. Just figured I'd use the opportunity to put a little more of it out there explicitly for the benefit of newbies who maybe haven't thought along these lines yet.

[molecular]

...
Even if it's just a 50% chance it's another 10-bagger, it makes sense to hold at 660 (unless one desperately needs fiat, in which case one might want to consider selling now instead of putting it off, to be honest)
...

It's even more asymmetric than that. If there's >10% chance of a 10x, it makes sense to hold. And that's assuming 90% chance of going to $0.

Yes, I'm aware. Thanks for pointing that out and for presenting the math. In my defense: I had actually edited the "50%" to "10%", then "~15%". Then I realized people might subconciously associate a "10% chance" with "10-bagger", so I left it at 50%, which is more in line with my expectations ;-). I'm growing increasingly aware of the fact that there exists an enormous suggestive potential "between the lines" and I'm trying to work with that, even if it means making an assertion less strong than it could be made.

Yeah, I figured you likely did all the math fully several years ago. Just figured I'd use the opportunity to put a little more of it out there explicitly for the benefit of newbies who maybe haven't thought along these lines yet.

Hmm... I miss the newbies

[CMMPro]

RE: My above post.


So I quickly ran the numbers for supposedly the most efficient advertised hardware available (Spondoolies SP20 and the SP31).

Even if they are able to produce these for $100 per unit, by the time you take into consideration $485/BTC, pay for shipping and a power supply they are not profitable to run at the lowest energy costs in the country ($0.05/KW hr)  Not for one week....not for 6 months. It doesn't help to scale up, my calculation does not take into consideration commercial datacenter costs...so 1000 of these doesn't help, it makes the losses much worse.

I seriously doubt that ANY company producing hardware is able to produce 1.7 TH for $100.
(ASICMiner for example has a chip only cost higher than that.)

I would say with some certainty that there are no miners that are able to profit at today's difficulty vs equipment efficiency vs equipment cost. If you think you can mine for profit you are fooling yourself or not taking into consideration all the hidden costs.

Then what's the explanation for the continuation of the hashrates exponential growth? Inertia?

I would say there is some "inertia", hardware that was ordered months ago, produced recently and coming online in the future of today where it's (non) profitability wasn't predicted...there is a sunk cost of hardware that they have no option to try to get back because a total loss of capital is not acceptable. Look to ASICMiner's latest chips for evidence of this. They fizzled because by the time they were released they had no financial incentive left in them. They literally can't produce new chips that are efficient enough, fast enough to stay ahead of the increase in difficulty.  

There is also a silent war of attrition going on...the mining group that has the newest hardware can hold out the longest and will hopefully extend profitability as the competitors shut down old hardware that is losing way too much.

There is also a race to try to produce something more and more efficient...but we are running out in that arena as well.
The most efficient miners on the market are only about twice as efficient as my KNC was last October, the difficulty increase though has gone up a lot more than double.

It is the law of diminishing returns kicking the mining industry in the ass...racing each other to bankruptcy.

[rfcdejong]

Yeah, I figured you likely did all the math fully several years ago. Just figured I'd use the opportunity to put a little more of it out there explicitly for the benefit of newbies who maybe haven't thought along these lines yet.

Hmm... I miss the newbies

Hi   (not that new being a Senior Member thru)

[pork pie]

RE: My above post.


So I quickly ran the numbers for supposedly the most efficient advertised hardware available (Spondoolies SP20 and the SP31).

Even if they are able to produce these for $100 per unit, by the time you take into consideration $485/BTC, pay for shipping and a power supply they are not profitable to run at the lowest energy costs in the country ($0.05/KW hr)  Not for one week....not for 6 months. It doesn't help to scale up, my calculation does not take into consideration commercial datacenter costs...so 1000 of these doesn't help, it makes the losses much worse.

I seriously doubt that ANY company producing hardware is able to produce 1.7 TH for $100.
(ASICMiner for example has a chip only cost higher than that.)

I would say with some certainty that there are no miners that are able to profit at today's difficulty vs equipment efficiency vs equipment cost. If you think you can mine for profit you are fooling yourself or not taking into consideration all the hidden costs.

Every now and again you read a news story about a botnet mining bitcoins. They do not have to pay electricity bills or buy hardware, so they must be able to profit at today's difficulty. What percentage of bitcoins on the market are likely to have been mined by botnets?

[rfcdejong]

Somewhere i did read that bitcoin (or crypto at least) is the perfect transfer coin (replacing fiat) into "Third Worlds" like Africa. Transfering fiat to those poor nations is done by using big banks like Westurn Union, they take too much advantage. Imagen how easy crypto coins will set a role in there. All what is needed is a way to turn crypto into fiat over there. People will pick up bitcoins, transfer them, keep a small amount, etc.. if millions will do that then a value like rpietila wrote will be possible, if just the evil twin brothers will sell first.

[Erdogan]

RE: My above post.


So I quickly ran the numbers for supposedly the most efficient advertised hardware available (Spondoolies SP20 and the SP31).

Even if they are able to produce these for $100 per unit, by the time you take into consideration $485/BTC, pay for shipping and a power supply they are not profitable to run at the lowest energy costs in the country ($0.05/KW hr)  Not for one week....not for 6 months. It doesn't help to scale up, my calculation does not take into consideration commercial datacenter costs...so 1000 of these doesn't help, it makes the losses much worse.

I seriously doubt that ANY company producing hardware is able to produce 1.7 TH for $100.
(ASICMiner for example has a chip only cost higher than that.)

I would say with some certainty that there are no miners that are able to profit at today's difficulty vs equipment efficiency vs equipment cost. If you think you can mine for profit you are fooling yourself or not taking into consideration all the hidden costs.

Every now and again you read a news story about a botnet mining bitcoins. They do not have to pay electricity bills or buy hardware, so they must be able to profit at today's difficulty. What percentage of bitcoins on the market are likely to have been mined by botnets?

This is probably near zero at the moment, but stories will hang around in the media for decennia.

[molecular]

RE: My above post.


So I quickly ran the numbers for supposedly the most efficient advertised hardware available (Spondoolies SP20 and the SP31).

Even if they are able to produce these for $100 per unit, by the time you take into consideration $485/BTC, pay for shipping and a power supply they are not profitable to run at the lowest energy costs in the country ($0.05/KW hr)  Not for one week....not for 6 months. It doesn't help to scale up, my calculation does not take into consideration commercial datacenter costs...so 1000 of these doesn't help, it makes the losses much worse.

I seriously doubt that ANY company producing hardware is able to produce 1.7 TH for $100.
(ASICMiner for example has a chip only cost higher than that.)

I would say with some certainty that there are no miners that are able to profit at today's difficulty vs equipment efficiency vs equipment cost. If you think you can mine for profit you are fooling yourself or not taking into consideration all the hidden costs.

Every now and again you read a news story about a botnet mining bitcoins. They do not have to pay electricity bills or buy hardware, so they must be able to profit at today's difficulty. What percentage of bitcoins on the market are likely to have been mined by botnets?

This is probably near zero at the moment, but stories will hang around in the media for decennia.

If you have a botnet you'll mine something other than a sha256 coin. Not even scrypt, probably some obscure "asic/gpu-proof" coin like ethereum, lol .

Bitcoin botnet mining is not going to net anything substantial even if you don't compare to the other options you have with a botnet. Difficulty is just too insanely high for this to make sense, even if you have access to gpu.

[Chuckee]

Risto wrong yet again. Does anyone actually take this guy seriously?

[btcpokerface]

Risto wrong yet again. Does anyone actually take this guy seriously?

Usually I trust him, but no one can be perfect except falliiiing.





joking!

[inca]

Risto wrong yet again. Does anyone actually take this guy seriously?

Obvious trolls like you certainly aren't.

[Bitcopia]

Risto wrong yet again. Does anyone actually take this guy seriously?

His call was that the bottom would be the $340 low of April 10. He is so far correct. I happen to agree that $340 was the bottom.

I usually don't feed the trolls, but Chuckee, fallllling, antibitcoin... etc. are just littering their excrement all over the place. I figured I'd make a small contribution in trying to keep it in check.

[wachtwoord]

Risto wrong yet again. Does anyone actually take this guy seriously?

His call was that the bottom would be the $340 low of April 10. He is so far correct. I happen to agree that $340 was the bottom.

I usually don't feed the trolls, but Chuckee, fallllling, antibitcoin... etc. are just littering their excrement all over the place. I figured I'd make a small contribution in trying to keep it in check.

Yeah, I also agree with this opinion.

[zimmah]

RE: My above post.


So I quickly ran the numbers for supposedly the most efficient advertised hardware available (Spondoolies SP20 and the SP31).

Even if they are able to produce these for $100 per unit, by the time you take into consideration $485/BTC, pay for shipping and a power supply they are not profitable to run at the lowest energy costs in the country ($0.05/KW hr)  Not for one week....not for 6 months. It doesn't help to scale up, my calculation does not take into consideration commercial datacenter costs...so 1000 of these doesn't help, it makes the losses much worse.

I seriously doubt that ANY company producing hardware is able to produce 1.7 TH for $100.
(ASICMiner for example has a chip only cost higher than that.)

I would say with some certainty that there are no miners that are able to profit at today's difficulty vs equipment efficiency vs equipment cost. If you think you can mine for profit you are fooling yourself or not taking into consideration all the hidden costs.

Every now and again you read a news story about a botnet mining bitcoins. They do not have to pay electricity bills or buy hardware, so they must be able to profit at today's difficulty. What percentage of bitcoins on the market are likely to have been mined by botnets?

This is probably near zero at the moment, but stories will hang around in the media for decennia.

If you have a botnet you'll mine something other than a sha256 coin. Not even scrypt, probably some obscure "asic/gpu-proof" coin like ethereum, lol .

Bitcoin botnet mining is not going to net anything substantial even if you don't compare to the other options you have with a botnet. Difficulty is just too insanely high for this to make sense, even if you have access to gpu.

yes, you're about 2 years late for that.

it would have been profitable 2 or 3 years ago, but right now, even if you hack into all supercomputers simultaneously, you'd barely even make a dent compared to the global hashrate.

[twiifm]

Risto wrong yet again. Does anyone actually take this guy seriously?

His call was that the bottom would be the $340 low of April 10. He is so far correct. I happen to agree that $340 was the bottom.

I usually don't feed the trolls, but Chuckee, fallllling, antibitcoin... etc. are just littering their excrement all over the place. I figured I'd make a small contribution in trying to keep it in check.

He called it at $500 and changed the thread title.  Lame

Just look at the date of OP aug 15 and look what happened on that date.  Big drop to 500 and bounce.

Flash crash didnt happen til aug 18

[JayJuanGee]

Risto wrong yet again. Does anyone actually take this guy seriously?

His call was that the bottom would be the $340 low of April 10. He is so far correct. I happen to agree that $340 was the bottom.

I usually don't feed the trolls, but Chuckee, fallllling, antibitcoin... etc. are just littering their excrement all over the place. I figured I'd make a small contribution in trying to keep it in check.

He called it at $500 and changed the thread title.  Lame

Just look at the date of OP aug 15 and look what happened on that date.  Big drop to 500 and bounce.

Flash crash didnt happen til aug 18

Actually, this is a fairly decent point.  

I have NO problem with people (or Bots, if Risto were a Bot, which I tend to doubt  ) making BTC predictions and communicating their predictions on this forum and even getting their predictions wrong - b/c who really fucking knows what is going to happen with bitcoin prices, except for perhaps some Whale manipulator(s), and even probably Whale manipulators have some considerable difficulties knowing whether their attempts at manipulation BTC prices are going to be successful.

Regarding calling the bottom, we gotta go by the date of the OP and the prices on that date, yet I remain quite uncertain whether Risto changed the contents of OP.  Personally, I believe this is a problem with this forum that allows the editing of previous posts, b/c it is much more difficult to pinpoint historically what people said b/c they may have changed the contents of their post(s).  OP  does seem to talk about $340 as a 10x bouncing point, so maybe it remains a little unclear whether Risto was calling $340 as the bottom or the prices on August 15?  

I do NOT really give a flying fuck if Risto got his prediction wrong, but I would be concerned if Risto were to change the contents of his post or the title of this thread  in order to weasle out of his original prediction.  To date, I do NOT really have evidence to establish with any level of confidence that Risto engaged in any such weasling conduct in connection with this calling the bottom prediction or this thread.