Volatility, ain't seen nothing yet, 10K to 1M in 1 year???

[Flashman]

So, counter-intuitively, there is a possibility for gas guzzling cars to make world energy greener, by rapidly exhausting the world's oil supply and creating a HUGE mass market for solar and wind-powered vehicles

Not the same thing, we can bring the bitcoin mines to the energy, whereas energy has to be brought to the vehicles. It's already happening, renewable is cheaper, mines are moving near hydro plants in Washington state, geothermal in Iceland, etc. Fossil fuels are only in competition elsewhere because they are more portable, portability is a non issue in bitcoin mining.

In fact, the biggest portability issue with the largest known source of energy is how difficult it is to get power or things made from power from earth orbit. The sun always shines up there, there's no atmospheric attenuation. It's the most efficient place to gather solar energy.

[cryptogeeknext]

...However consider this scenario, if current controllers decide to freeze certain super rich addresses, then those people might eventually wake up and decide to fight for control at a huge loss in order to save at least something...

You win, I finally see the untenability of my position.
Bitcoin--a system where your money could vanish because nefarious miner cabal.  Much freedom, such better than fiat.

Enjoy the gifs.

Bitcoin is a system where competition for control is ensured and never stops.
You can't lose your freedom if you don't already have it.

[NotLambchop]

So, counter-intuitively, there is a possibility for gas guzzling cars to make world energy greener, by rapidly exhausting the world's oil supply and creating a HUGE mass market for solar and wind-powered vehicles

Not the same thing, we can bring the bitcoin mines to the energy, whereas energy has to be brought to the vehicles. It's already happening, renewable is cheaper, mines are moving near hydro plants in Washington state, geothermal in Iceland, etc. Fossil fuels are only in competition elsewhere because they are more portable, portability is a non issue in bitcoin mining.

In fact, the biggest portability issue with the largest known source of energy is how difficult it is to get power or things made from power from earth orbit. The sun always shines up there, there's no atmospheric attenuation. It's the most efficient place to gather solar energy.

Flashman, electricity is quite easy to transport--see high-tension power lines.  A megafarm which sets up next to a hydro plant & uses up all of its energy is anything but "green."
To make up for that wasted energy, coal-burning plants will simply have to burn more coal.
Think more than one step ahead.

[NotLambchop]

...
Bitcoin Life is a system where competition for control is ensured and never stops.
You can't lose your freedom if you don't already have it.

FTFY  Thanks for explaining how everything in the world works.

[Flashman]

Flashman, electricity is quite easy to transport--see high-tension power lines.  

We know how to do it, that does not necessarily make it "easy" or cheap for long distances. Just the copper is gonna costs 10s of thousands per mile.

[NotLambchop]

Flashman, electricity is quite easy to transport--see high-tension power lines.  

We know how to do it, that does not necessarily make it "easy" or cheap for long distances. Just the copper is gonna costs 10s of thousands per mile.

>thinks high-tension power line cables are copper

Did you learn that from Zerohedge or from Cato Institute?

[Flashman]

Yah there's increasing use of aluminum and even carbon fibre cores, take that as shorthand for "materials cost."

Actual installed cost per mile is in the neighborhood of a third of a million a mile, single conductor, at that rate it's cheaper to develop bleeding edge asics from scratch rather than build 50 miles of lines.

[NotLambchop]

^

The cool thing about building power lines vs. building ASICs is power lines don't become obsolete in 5 months

[dinofelis]

You are exaggerating.
You still need electricity to produce food and other stuff, you can't eat your bitcoins even if they are super precious.

The needs of others are usually not a consideration when making money.  You are right, though: the price of electricity would sky-rocket when fighting for the last few available GW, as the demand for the current would be in competition with "making money".  As such, there will be a market equilibrium between those rich people who can still afford high electricity prices to produce food and stuff, and miners.

In other words, electricity will become hugely scarce, and the marginal price of electricity will be given by the trade-off between the desire to eat, and the desire to mine coins.

In short, market cap reflects demand for money (bitcoins), mining costs reflect demand for control.
These two are not directly related.

Price is not influenced by mining.  But mining is of course influenced by price: you will put into mining the amount of value minus a profit margin, equal to the mined coins.

If mining 3600 coins at $3 million each per day, mining will be rewarded $10 billion.  Any investment with a cost seriously less than $10 billion A DAY will be profitable.  I estimated that half of the mining cost goes to electricity, the other half goes to new hardware.

So you can easily spend 4 billion $ A DAY on electricity, 4 billion $ A DAY on new hardware, and still put 2 billion $ in your pocket.
A 20% ROI.  Who does better ?

Wouldn't you invest like crazy to get part of those $10 billion a day ?

[dinofelis]

The efficiency of miners is improving though, it might be around a watt a gigahash installed on average at the moment, but with the older hardware getting turned off, it's going to approach 0.5W/gh soon, the next gen 16nm is supposed to be coming in at 0.2W/GH beginning next year. We could be down to 0.1 before the next block halving.

That doesn't matter.  If you have miners 10 times as energy efficient, you can afford to put 10 times more miners !
What matters is the COST of electricity.  As long as the cost of electricity is way below the mining reward (which is about $10 billion a day if we are in full bitcoin economy), it is profitable to put more mining equipment, consuming more power.

The thing about bitcoin though, is it is VERY cheap to export. Cheaper actually than electric power is to move, if the power can be produced 100s of miles away from population centers, industrial areas etc. There's a lot of potential areas for wind turbines, solar, hydro, tidal, geothermal etc that are just too far away from use points to consider tapping into. If there is a huge and insatiable demand for wind turbines and solar, sure an initial price spike on those, but it would actually lead to cheaper wind and solar plant for everyone, due to economies of scale and mass market factors.

Absolutely.
Now, there is something to say for that: deserts could be paved full of photo-electric cells with integrated mining equipment.  We could put the Sahara full of mining stuff.  However, I think a good old coal power plant will win cost-wise.  Remember that this must be up and running 2 years from now :-)

What I'm trying to say is, that the bitcoin price will be wayyyy above the actual electricity cost to mine, but be close to what it would cost to mine at 15 cent a kWh or so. The difference would be underutilised power resource development costs, and equipment replacement costs, with the mines betting that they get to double up every 18months due to moores law.

Nope, mining will adjust so as to have electricity cost to be, say, one third or so of the mined value.  (one third profit, one third hardware, and one third electricity, just guessing).

So, counter-intuitively, there is a possibility for bitcoin mining to make world energy greener, just by creating a HUGE mass market for solar and wind plant, and by allowing fossil fuel plants to be displaced by exchanging their ability to ramp load quickly, for an ability to dump load quickly.

It is true that the reward-halving will leave us with a lot of newly constructed, unused power plants :-)
Like we will have mountains of obsolete mining equipment.

Because the other market that would be seriously distorted, is the electronics industry.  A huge part of it would be converted in making mining equipment.

Half of that will die at every reward halving.

[Flashman]

The cool thing about building power lines vs. building ASICs is power lines don't become obsolete in 5 months

And you can get the taxpayer to fund them, because they have a NIMBY attitude towards power plants.

[NotLambchop]

The cool thing about building power lines vs. building ASICs is power lines don't become obsolete in 5 months

And you can get the taxpayer to fund them, because they have a NIMBY attitude towards power plants.

Lol @ trotting out ur tax hobby horse when you got nothing.  GG, bro!

[cryptogeeknext]

...
Bitcoin Life is a system where competition for control is ensured and never stops.
You can't lose your freedom if you don't already have it.

FTFY  Thanks for explaining how everything in the world works.

True. That's why I call PoW - Proof of World

In short, market cap reflects demand for money (bitcoins), mining costs reflect demand for control.
These two are not directly related.

Price is not influenced by mining.  But mining is of course influenced by price: you will put into mining the amount of value minus a profit margin, equal to the mined coins.

If mining 3600 coins at $3 million each per day, mining will be rewarded $10 billion.  Any investment with a cost seriously less than $10 billion A DAY will be profitable.  I estimated that half of the mining cost goes to electricity, the other half goes to new hardware.

So you can easily spend 4 billion $ A DAY on electricity, 4 billion $ A DAY on new hardware, and still put 2 billion $ in your pocket.
A 20% ROI.  Who does better ?

Wouldn't you invest like crazy to get part of those $10 billion a day ?

It's correct, only I don't see where you get 3600 coins at $3 million each.
Market cap simply cannot grow that fast, if you see that, it's a bubble and it will burst.

By the time the market cap is substantial the reward would mostly consist of transaction fees.

[dinofelis]

It's correct, only I don't see where you get 3600 coins at $3 million each.
Market cap simply cannot grow that fast, if you see that, it's a bubble and it will burst.

By the time the market cap is substantial the reward would mostly consist of transaction fees.

S-curve adoption, good money (bitcoin) drives bad (fiat) out of the market, and the total market cap of fiat in the world today (55 trillion or so).  This means that if bitcoin takes over all M2 fiat in the world (it will be driven out, and adoption will be fast, according to S-curve theory, and good/bad money theory), with similar velocity, that it will have a similar market cap.

If we have a market cap of, say 17-18 million coins, and it has to have the value of 55 trillion which is the M2 cap today, then we arrive at $ 3 million for a coin.

It is "bitcoin full moon".

Hypothetical, but the basis for the reasoning.

With S-curve adoption hypothesis and good drives out bad, there is no other option but "full market cap".

So your option is: "S curve adoption will occur far in the future".  Then the question is: what happens in the mean time with bitcoin ? 

[cryptogeeknext]

It's correct, only I don't see where you get 3600 coins at $3 million each.
Market cap simply cannot grow that fast, if you see that, it's a bubble and it will burst.

By the time the market cap is substantial the reward would mostly consist of transaction fees.

S-curve adoption, good money (bitcoin) drives bad (fiat) out of the market, and the total market cap of fiat in the world today (55 trillion or so).  This means that if bitcoin takes over all M2 fiat in the world (it will be driven out, and adoption will be fast, according to S-curve theory, and good/bad money theory), with similar velocity, that it will have a similar market cap.

If we have a market cap of, say 17-18 million coins, and it has to have the value of 55 trillion which is the M2 cap today, then we arrive at $ 3 million for a coin.

It is "bitcoin full moon".

Hypothetical, but the basis for the reasoning.

With S-curve adoption hypothesis and good drives out bad, there is no other option but "full market cap".

So your option is: "S curve adoption will occur far in the future".  Then the question is: what happens in the mean time with bitcoin ? 

In the mean time, people need to learn and understand that old money is bad and that new money is Bitcoin. I met an old friend recently, working in IT, he heard about Bitcoin, but didn't think it was money. He also had no idea what was wrong with the current system. So this will go on for awhile.

[NotLambchop]

...I met an old friend recently, working in IT, he heard about Bitcoin, but didn't think it was money. He also had no idea what was wrong with the current system. ...

You used to have reasonable, well-informed friends.

[dinofelis]

In the mean time, people need to learn and understand that old money is bad and that new money is Bitcoin. I met an old friend recently, working in IT, he heard about Bitcoin, but didn't think it was money. He also had no idea what was wrong with the current system. So this will go on for awhile.

I know it will take (A LOT OF) time !  I was just illustrating the logical consequences of any theoretical model that postulates:

- S-curve technology adoption in the "near" future
- good drives out bad (meaning: finite market share is not possible, it has to be 100%)

as has been put forward a few times to say 'with certainty' that bitcoin will "go to the moon" soon (in a few years).

Then you get plots of technology adoption of internet, mobile phones, TV and so on to illustrate the S-type adoption.

The only point is: if it is now clear that S-curve adoption in the near future to 100% is not a very viable model, and if it is, that it would be catastrophic given the still very high mining rewards, then what IS a viable model ?

Because how does something like a speculative asset do for, say, more than 20 years without "breakthrough" ?  How does confidence and trust behave if after 20 years, it is still a small thing ?

I'm trying to explore critically what are the possibilities of bitcoin.  I just showed the peculiarities of the model "to the moon soon", which make it hard to believe.  

Could it go stepwise ?  Every few years, a new conquest of a small niche market ?  To keep it slowly growing ?  To keep the flame burning ?  It started out in the black market.  It is taking on a few "geek" niches.
However, how long can this slow stepwise conquest without "the big S-curve hit" last ?

[brg444]

In the mean time, people need to learn and understand that old money is bad and that new money is Bitcoin. I met an old friend recently, working in IT, he heard about Bitcoin, but didn't think it was money. He also had no idea what was wrong with the current system. So this will go on for awhile.

I know it will take (A LOT OF) time !  I was just illustrating the logical consequences of any theoretical model that postulates:

- S-curve technology adoption in the "near" future
- good drives out bad (meaning: finite market share is not possible, it has to be 100%)

as has been put forward a few times to say 'with certainty' that bitcoin will "go to the moon" soon (in a few years).

Then you get plots of technology adoption of internet, mobile phones, TV and so on to illustrate the S-type adoption.

The only point is: if it is now clear that S-curve adoption in the near future to 100% is not a very viable model, and if it is, that it would be catastrophic given the still very high mining rewards, then what IS a viable model ?

Because how does something like a speculative asset do for, say, more than 20 years without "breakthrough" ?  How does confidence and trust behave if after 20 years, it is still a small thing ?

I'm trying to explore critically what are the possibilities of bitcoin.  I just showed the peculiarities of the model "to the moon soon", which make it hard to believe.  

Could it go stepwise ?  Every few years, a new conquest of a small niche market ?  To keep it slowly growing ?  To keep the flame burning ?  It started out in the black market.  It is taking on a few "geek" niches.
However, how long can this slow stepwise conquest without "the big S-curve hit" last ?

S-curve adoption does not imply instant 100% market penetration. Your 3 million$ coin scenario is only an hyperbole to support your stance

[dinofelis]

S-curve adoption does not imply instant 100% market penetration. Your 3 million$ coin scenario is only an hyperbole to support your stance

The S-curve adoption by itself not: that only means that at a certain point, a quick evolution to a natural market share is obtained.
But if you combine S-curve adoption AND "good money drives out bad money" as a hypothesis, then by definition there is no room for "bad money", as the hypothesis is that it will be driven out.

And it cannot be driven out "slowly" because that would contradict S-curve adoption.

Both hypotheses together can only mean an S-curve that saturates at 100%.

If "good money doesn't drive out bad", then ANY market share could be the limiting market share.  Maybe we already reached that.  Maybe bitcoin then came already to maturity and its market share is more or less reached.  Maybe it will go to 0.1% of the total money market.  Maybe it will go to 0.1% of the gold market share.  Ha, it is there already.  Maybe it is 1%.  Maybe it is 10%.

But I was taking the often-mentioned two hypotheses of S-curve adoption AND "good drives out bad" together.  Then there is no choice, except for the moment of the "vertical", and then people say "soon".  I considered: within the next 10 years.

[cryptogeeknext]

...I met an old friend recently, working in IT, he heard about Bitcoin, but didn't think it was money. He also had no idea what was wrong with the current system. ...

You used to have reasonable, well-informed friends.

Maybe. He complained that a few companies he worked for went bankrupt during recent economic woes and the one he is currently at doesn't look very stable either. He had no idea that the debt-spiral model of today's fiat system was the cause though. He has now.

I know it will take (A LOT OF) time !  I was just illustrating the logical consequences of any theoretical model that postulates:

- S-curve technology adoption in the "near" future
- good drives out bad (meaning: finite market share is not possible, it has to be 100%)

as has been put forward a few times to say 'with certainty' that bitcoin will "go to the moon" soon (in a few years).

Then you get plots of technology adoption of internet, mobile phones, TV and so on to illustrate the S-type adoption.

The only point is: if it is now clear that S-curve adoption in the near future to 100% is not a very viable model, and if it is, that it would be catastrophic given the still very high mining rewards, then what IS a viable model ?

Because how does something like a speculative asset do for, say, more than 20 years without "breakthrough" ?  How does confidence and trust behave if after 20 years, it is still a small thing ?

I'm trying to explore critically what are the possibilities of bitcoin.  I just showed the peculiarities of the model "to the moon soon", which make it hard to believe.  

Could it go stepwise ?  Every few years, a new conquest of a small niche market ?  To keep it slowly growing ?  To keep the flame burning ?  It started out in the black market.  It is taking on a few "geek" niches.
However, how long can this slow stepwise conquest without "the big S-curve hit" last ?

Periods of rapid growth will be interleaved with periods of slide-down and some stability. That's how Bitcoin has been since inception, that's how it will go on.