The negative impact of mining farms

[mailmansDOGE]

...Maybe in the end centralised mining is not all that bad... 

Most people invested in BTC would strongly disagree.

Super strongly. Isn't there a hard fork for this kind of thing?

I'd agree that you cherry picked the worst part out of my post. The part you quoted arguably sounds bad. Especially since you left out my explanation on why I don't think it's all that bad since most of the mined bitcoins (although mined from a a few companies) are still distributed and circulated from/to a large range of individuals.

[dropt]

I'd agree that you cherry picked the worst part out of my post. The part you quoted arguably sounds bad. Especially since you left out my explanation on why I don't think it's all that bad since most of the mined bitcoins (although mined from a a few companies) are still distributed and circulated from/to a large range of individuals.

In regards to your point surrounding cloud mining passing coins among many users instead of the HW owner/operators, how are these contracts paid for?  In most cases: BITCOIN!   TaDa!  So in reality there's actually very little coin holding diversification occurring.

[DaRude]

...Maybe in the end centralised mining is not all that bad... 

Most people invested in BTC would strongly disagree.

Super strongly. Isn't there a hard fork for this kind of thing?

I'd agree that you cherry picked the worst part out of my post. The part you quoted arguably sounds bad. Especially since you left out my explanation on why I don't think it's all that bad since most of the mined bitcoins (although mined from a a few companies) are still distributed and circulated from/to a large range of individuals.

I tried 

But how's that different from say have just google run one large mega farm, as long as you own stocks of google and get your share of btc through dividends you're good right? ...right?

[mailmansDOGE]

I tried 

But how's that different from say have just google run one large mega farm, as long as you own stocks of google and get your share of btc through dividends you're good right? ...right?

I can't see why a company running a mining farm would want to cause harm to bitcoin. They're all deeply invested and are actively profiting from it, therefore keeping their business alive. Killing it would hurt them more as a company than it would hurt you and me. Remember that one time the evil GHASh.IO reached 51% of the total hashrate? It wasn't even entirely their fault that the pool held 51% of the network's hashing power for a moment since people willingly choose to mine there. Yet no harm was caused.

[DaRude]

I tried 

But how's that different from say have just google run one large mega farm, as long as you own stocks of google and get your share of btc through dividends you're good right? ...right?

I can't see why a company running a mining farm would want to cause harm to bitcoin. They're all deeply invested and are actively profiting from it, therefore keeping their business alive. Killing it would hurt them more as a company than it would hurt you and me. Remember that one time the evil GHASh.IO reached 51% of the total hashrate? It wasn't even entirely their fault that the pool held 51% of the network's hashing power for a moment since people willingly choose to mine there. Yet no harm was caused.

Don't think they ever reached 51% did they? thought they just got close.

And there are so many arguments against centralization i don't even know where to start. I guess the easiest is regulations, even if it's not in the companies interest, companies are easily manipulated and have to report to government. Regulation will go in place to try to control it/shut it down/freeze accounts etc etc etc etc...

[Jeremias]

Why do you call it negative? Its actually the positive impact of mining farms. I on my part love the price swings, that's where markets are made.

Referred to the Sam Cole interview on Bloomberg http://www.bloomberg.com/news/2014-10-21/bitcoin-miner-ditches-clients-to-chase-2-billion-coding-prize.html

interesting to note that he refers the price of mining a coin "significantly lower than $400" - now how much lower, that we will test out in coming weeks.

What we are seeing now is a race to dump coins by the miner farms. Why? Simply, its the the survival of the fittest. Its as if - "let me lower it down, and see whether it is matched by someone else" and in this race, farms are desperate to get their own price point, before the price fall again. They will drag each other down and at some point either they have to stop or else

Love it, all of this. Very soon we will see few of them going bust and icing would be the price swings.

[NotLambchop]

...
I can't see why a company running a mining farm bank would want to cause harm to bitcoin fiat. They're all deeply invested and are actively profiting from it, therefore keeping their business alive. Killing it would hurt them more as a company than it would hurt you and me...

FTFY.  No need to "kill" Bitcoin to manipulate it to one's advantage.  If I devalue Bitcoin by 50% in the process of accumulating 51% more coin, that's profit for me & loss for you.

[ssmc2]

Why do you call it negative? Its actually the positive impact of mining farms. I on my part love the price swings, that's where markets are made.

Referred to the Sam Cole interview on Bloomberg http://www.bloomberg.com/news/2014-10-21/bitcoin-miner-ditches-clients-to-chase-2-billion-coding-prize.html

interesting to note that he refers the price of mining a coin "significantly lower than $400" - now how much lower, that we will test out in coming weeks.

What we are seeing now is a race to dump coins by the miner farms. Why? Simply, its the the survival of the fittest. Its as if - "let me lower it down, and see whether it is matched by someone else" and in this race, farms are desperate to get their own price point, before the price fall again. They will drag each other down and at some point either they have to stop or else

Love it, all of this. Very soon we will see few of them going bust and icing would be the price swings.

this guy gets it

[MrBig]

Why do you call it negative? Its actually the positive impact of mining farms. I on my part love the price swings, that's where markets are made.

Referred to the Sam Cole interview on Bloomberg http://www.bloomberg.com/news/2014-10-21/bitcoin-miner-ditches-clients-to-chase-2-billion-coding-prize.html

interesting to note that he refers the price of mining a coin "significantly lower than $400" - now how much lower, that we will test out in coming weeks.

What we are seeing now is a race to dump coins by the miner farms. Why? Simply, its the the survival of the fittest. Its as if - "let me lower it down, and see whether it is matched by someone else" and in this race, farms are desperate to get their own price point, before the price fall again. They will drag each other down and at some point either they have to stop or else

Love it, all of this. Very soon we will see few of them going bust and icing would be the price swings.

I consider it negative because it will centralize mining, therefore eroding many people's trust in BTC. We already have less than 1000 addresses controlling the bulk of the existing BTC.  People said as time goes by we'll see BTC become more evenly distributed, but it's only a small portion of the available BTC spreading to more hands, while the bulk of it is still controlled by a few. Now we're seeing the same thing happen with mining. This is an easily manipulated market, which will suck the wealth out of many and give it to a few.

[ElectricMucus]

Larger and larger mining farms are not what's increasing selling pressure. To the contrary, the larger the farm the cheaper the electricity and the cheaper the hardware to better the operating margin becomes.
A high operating margin gives miners the option to retain more of the mined Bitcoins while a low operating margin forces the miner to sell or at least get more capital by other means to pay bills.

[redsn0w]

This is how bitcoin slowly dies from here.  What started as a chance for everyone to generate their own bitcoins and participate in the economy now turns to a few data centers producing bitcoins thus forcing new users to purchase new bitcoins from them.  We've traded fiat currency controlled by a few central banks to bitcoin controlled by a few data centers.

Meet the new 1%.  Slightly different to the old 1%, but they're still there.

So at the end where is the pure decentralization ?

[BlindMayorBitcorn]

This is how bitcoin slowly dies from here.  What started as a chance for everyone to generate their own bitcoins and participate in the economy now turns to a few data centers producing bitcoins thus forcing new users to purchase new bitcoins from them.  We've traded fiat currency controlled by a few central banks to bitcoin controlled by a few data centers.

Meet the new 1%.  Slightly different to the old 1%, but they're still there.

So at the end where is the pure decentralization ?

In our dreams

[labsbitforum]

Bitcoin: A Peer-to-Peer Electronic Cash System

Its only a matter of time before bitcoin is replaced by something that is decentralized and peer-to-peer.  Greed and lack of competent leadership are the root causes for this version 1.0 failure.

[johnyj]

Large mining farms will be the first to shutdown when exchange rate dive below the electricity + maintenance cost, unless there are large VC backing them to mine certain amount of coins regardless of cost

Spare miners however could last much longer due to lower cost overhead and even free electricity

[BlindMayorBitcorn]

Bitcoin: A Peer-to-Peer Electronic Cash System

Its only a matter of time before bitcoin is replaced by something that is decentralized and peer-to-peer.  Greed and lack of competent leadership are the root causes for this version 1.0 failure.

Gavin is very competent. A fork is in the works, remember?

[labsbitforum]

Bitcoin: A Peer-to-Peer Electronic Cash System

Its only a matter of time before bitcoin is replaced by something that is decentralized and peer-to-peer.  Greed and lack of competent leadership are the root causes for this version 1.0 failure.

Gavin is very competent. A fork is in the works, remember?

I was surprised that nothing was done to thwart FPGAs.  And look where we are now.

[MrBig]

Bitcoin: A Peer-to-Peer Electronic Cash System

Its only a matter of time before bitcoin is replaced by something that is decentralized and peer-to-peer.  Greed and lack of competent leadership are the root causes for this version 1.0 failure.

Gavin is very competent. A fork is in the works, remember?

I thought the lead developer was changed.

[brg444]

Bitcoin: A Peer-to-Peer Electronic Cash System

Its only a matter of time before bitcoin is replaced by something that is decentralized and peer-to-peer.  Greed and lack of competent leadership are the root causes for this version 1.0 failure.

How exactly is Bitcoin not peer-to-peer?

[stefanf]

I believe he means that mining has become a job of a few entities (mining farms). Not exactly Satoshi's idea about decentralized peer-to-peer systems.

[labsbitforum]

I believe he means that mining has become a job of a few entities (mining farms). Not exactly Satoshi's idea about decentralized peer-to-peer systems.

yes