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NotLambchop
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February 23, 2015, 02:03:33 PM |
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The miners have costs that are approximately the same as the value of the coins they produce... Well, that sure was Satoshi's prediction, unfortunately it didn't quite work out that way, did it? |
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"If you don't want people to know you're a scumbag then don't be a scumbag." -- margaritahuyan
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dinofelis
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February 23, 2015, 02:10:17 PM |
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The miners have costs that are approximately the same as the value of the coins they produce... Well, that sure was Satoshi's prediction, unfortunately it didn't quite work out that way, did it? Isn't it ? |
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NotLambchop
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February 23, 2015, 02:44:51 PM |
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The miners have costs that are approximately the same as the value of the coins they produce... Well, that sure was Satoshi's prediction, unfortunately it didn't quite work out that way, did it? Isn't it ? No. If mining cost approached BTC price, megamines would be an exercise in stupidity. Why take risks with no reward potential? |
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dinofelis
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February 23, 2015, 03:02:04 PM |
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No. If mining cost approached BTC price, megamines would be an exercise in stupidity. Why take risks with no reward potential?
Don't you think they are ? Of course there will be a small margin of benefit, because otherwise you don't go into the business. But if the margin is larger, then more people will go into the business, increase the difficulty, until the margin gets so small that it isn't worth doing any more. |
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NotLambchop
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February 23, 2015, 03:20:23 PM |
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No. If mining cost approached BTC price, megamines would be an exercise in stupidity. Why take risks with no reward potential?
Don't you think they are ? Of course there will be a small margin of benefit, because otherwise you don't go into the business. But if the margin is larger, then more people will go into the business, increase the difficulty, until the margin gets so small that it isn't worth doing any more. If you think that major ASIC manufacturers & their backers are stupid, I got nothing. If you feel that the same mining concerns that mined @1200/coin are getting the same profit margin while mining @230/coin, I got nothing. |
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dinofelis
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February 23, 2015, 03:30:51 PM |
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If you think that major ASIC manufacturers & their backers are stupid, I got nothing.
As long as they have customers, they are not stupid ! After all, the risk is taken by the miners, not those that sell the equipment.... as long as they sell it of course  But it is not because you can take a 5% margin for your efforts that you are necessarily stupid. You're just doing hard business like anyone else. In every highly competitive market, there is a small margin to take. If the margin is bigger, it attracts more competitors, and the margin goes down. If the margin is too small, people leave the business, and the competition diminishes. The only difference in mining is: 1) the total sum of business to take is finite and pre-determined (the market cannot grow) 2) the total sum will diminish over the years (the market will shrink !). at least, concerning the block rewards. The fees, that's something else: that's normal business that can grow. Within a market, the margin is determined by your efficiency. If you are highly efficient, you can obtain a decent margin, where your competitor who is less efficient is dying. But given that the efficiency is essentially given by the ASIC manufacturers, and that there are not so many independent ones, the room for efficiency for individual miners is small - mainly the price of electrical power I guess. I have no idea about the margins right now made by miners, but my feeling is that they are not terrible. |
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NotLambchop
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February 23, 2015, 03:39:09 PM |
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I have no idea about the margins right now made by miners, but my feeling is that they are not terrible.
KNC, an ASIC manufacturer, mines. It mined @1200, and is mining now. If they're not terrible now, they must have been pretty awesome @1200. Re. market feedback minimizing margin: The feedback loop has ~6 months of lag. Negative feedback loops with a time delay--that's what an oscillator is. |
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erre
Legendary
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Activity: 1666
Merit: 1205
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February 23, 2015, 06:16:15 PM |
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...When they buy gov. bonds with this newly created currency they are swapping something that they can simply print out of thin air and then collecting interest on it... And BTC is not created "out of thin air"? And please don't start again with the old saw that BTC represents wasted electricity & digital thumb-twiddling. nope , btc is created out of electricity and math my friend. As I said, wasted electricity and digital thumb-twiddling. Why not make my turds the new world currency? I've been constantly pooping issuing them since birth (like Bitcoin), and many are currently irretrievably lost, for extra scarcity. Like Bitcoin. Unless you think me immortal, the total number of turds to be issued is limited, because math and science. Further, unlike Bitcoin, my poop is tangible & has value beyond its monetary worth. My turds also have only a nominal learning curve--easily understood by goldbugs and Bitcoiners. Bonus! Best of all, turds do not rely on the internet (which we all know is controlled by NSA/CSS & other Jews) or malware-infested smartphones (which will be all destroyed by the inevitable EMP). Get in on the ground floor before the sheeple catch on, don't miss the moontrain, Bitcoiner! You would act like a central authority, what if u decide to loan all of your existing turds? How could we repay debts? Also, turds are easy to counterfeit, difficoult to divide, to storage, to transfer, and prone to degradation over time. But, Hey! We could use the blockchain technology to make a turd backed coin, so the turds can never move and only change their ownership...but... at this point, Do we really need turds? It's a waste of resource to storage all this turds instead of using them for power generation or to fertilizze camps , so.... I think bitcoin is still better. |
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NotLambchop
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February 23, 2015, 06:33:05 PM |
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...When they buy gov. bonds with this newly created currency they are swapping something that they can simply print out of thin air and then collecting interest on it... And BTC is not created "out of thin air"? And please don't start again with the old saw that BTC represents wasted electricity & digital thumb-twiddling. nope , btc is created out of electricity and math my friend. As I said, wasted electricity and digital thumb-twiddling. Why not make my turds the new world currency? I've been constantly pooping issuing them since birth (like Bitcoin), and many are currently irretrievably lost, for extra scarcity. Like Bitcoin. Unless you think me immortal, the total number of turds to be issued is limited, because math and science. Further, unlike Bitcoin, my poop is tangible & has value beyond its monetary worth. My turds also have only a nominal learning curve--easily understood by goldbugs and Bitcoiners. Bonus! Best of all, turds do not rely on the internet (which we all know is controlled by NSA/CSS & other Jews) or malware-infested smartphones (which will be all destroyed by the inevitable EMP). Get in on the ground floor before the sheeple catch on, don't miss the moontrain, Bitcoiner! You would act like a central authority, what if u decide to loan all of your existing turds? How could we repay debts? No more than a blockchain is a central authority. For a fee (think of it as the price of mining), I'll let you congregate in the sewer below my house & [fairly] fight it out amongst yourselves for bits of my valuable poop. Also, turds are easy to counterfeit, difficoult to divide, to storage, to transfer, and prone to degradation over time.
At this point, yes. Poop as world currency is still in its nascent stages, these problems will all be eventually solved. Just like Bitcoin's 7 transactions per second limit. Have faith! But, Hey! We could use the blockchain technology to make a turd backed coin, so the turds can never move and only change their ownership...but... at this point, Do we really need turds? ... Lol, do you know what the proposed sidechains are? |
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cellard
Legendary
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Activity: 1372
Merit: 1252
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February 23, 2015, 07:07:00 PM |
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1 BTC = always the same % of participation in the total of 21 million coins in the blockchain. This is unbreakable and what makes it the objective superior payment of the future, without no one being able to tweak that. Thats why massive suicides will ensue on the future after people realize they had a long time of cheap 1 BTC participations inside this monumental, mathematically perfect network.
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NotLambchop
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February 23, 2015, 07:17:45 PM |
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1 BTC = always the same % of participation in the total of 21 million coins in the blockchain. This is unbreakable and what makes it the objective superior payment of the future, without no one being able to tweak that...
Except hardfork  *BTW, my poop is immuned to being hardforked u kno |
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dinofelis
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February 24, 2015, 07:37:37 AM |
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I have no idea about the margins right now made by miners, but my feeling is that they are not terrible.
KNC, an ASIC manufacturer, mines. It mined @1200, and is mining now. If they're not terrible now, they must have been pretty awesome @1200. Re. market feedback minimizing margin: The feedback loop has ~6 months of lag. Negative feedback loops with a time delay--that's what an oscillator is. I didn't know you were bullish |
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Razick
Legendary
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Activity: 1330
Merit: 1003
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February 24, 2015, 08:51:41 PM |
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I just created 100 pennies and I loaned them out to you + interest… How is it possible for you to pay me the 101 pennies you now legally owe me if only 100 pennies are in circulation?
Because that's not how it works. There are far more "pennies" in circulation. It's true that debts exceed the money supply but that's not neccissarily a problem since each "penny" can be spent more than once. In fact, if I remember correctly, the velocity of money in the US (how often each unit of currency is spent in a year) is around 4. |
ACCOUNT RECOVERED 4/27/2020. Account was previously hacked sometime in 2017. Posts between 12/31/2016 and 4/27/2020 are NOT LEGITIMATE.
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dinofelis
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February 25, 2015, 08:07:27 AM |
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I just created 100 pennies and I loaned them out to you + interest… How is it possible for you to pay me the 101 pennies you now legally owe me if only 100 pennies are in circulation?
Because that's not how it works. There are far more "pennies" in circulation. It's true that debts exceed the money supply but that's not neccissarily a problem since each "penny" can be spent more than once. In fact, if I remember correctly, the velocity of money in the US (how often each unit of currency is spent in a year) is around 4. Indeed, that's the whole point that kills that recurring story about "asking interest implies the need for printing continuously money". |
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johnyj
Legendary
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Activity: 1988
Merit: 1012
Beyond Imagination
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February 25, 2015, 01:06:36 PM |
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I just created 100 pennies and I loaned them out to you + interest… How is it possible for you to pay me the 101 pennies you now legally owe me if only 100 pennies are in circulation?
Because that's not how it works. There are far more "pennies" in circulation. It's true that debts exceed the money supply but that's not neccissarily a problem since each "penny" can be spent more than once. In fact, if I remember correctly, the velocity of money in the US (how often each unit of currency is spent in a year) is around 4. Change the 100 pennies to 100 trillion pennies, same principle applies Velocity of money has nothing to do with money creation. You move a dollar one million times between your left pocket and your right pocket, and voila you are now a millionaire  |
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johnyj
Legendary
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Activity: 1988
Merit: 1012
Beyond Imagination
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February 25, 2015, 01:14:22 PM |
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...When they buy gov. bonds with this newly created currency they are swapping something that they can simply print out of thin air and then collecting interest on it... And BTC is not created "out of thin air"? And please don't start again with the old saw that BTC represents wasted electricity & digital thumb-twiddling. Not in the same sense that fiat is created, that's correct. If Bitcoin didn't have a limit of 21 million and was always inflating at some rate determined by a privileged elite, then it would be the same as fiat. You seem to have missed my point, that being: both fiat and Bitcoin are created "out of thin air." Caveat: fiat has an existent economy behind it, "stuff" backing it--armies, cows, cars, etc., etc. Bitcoin, OTOH, does not. It merely dilutes the currencies of existent economies, much like counterfeit money. The 21mil BTC limit is neither here nor there, that can easily be changed with a hardfork. Bitcoin is like gold, you must pay real resources to get it. Fiat money is a trick, central banks pay nothing to get it. Fiat's backing is based on a consensus, so does bitcoin, bitcoin can be backed by armies, cows, cars, etc... as long as that consensus is reached |
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NotLambchop
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February 25, 2015, 01:30:08 PM |
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Bitcoin is like gold, you must pay real resources to get it. ...
Just because something costs money to obtain doesn't make it valuable. If I charge you $4000 for a $2000 computer I've spent a week beating to a pulp with a sledgehammer, you didn't get a great deal. Even though a week of my time is worth $2000, and the computer did cost me $2000. I didn't create value, I have *destroyed it*. Just like you spending $2000 on thumb-twiddling machines & burning $2000 of electricity doesn't create $4000 of value, it merely *destroys* it.  |
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johnyj
Legendary
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Activity: 1988
Merit: 1012
Beyond Imagination
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February 25, 2015, 02:16:24 PM |
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Bitcoin is like gold, you must pay real resources to get it. ...
Just because something costs money to obtain doesn't make it valuable. If I charge you $4000 for a $2000 computer I've spent a week beating to a pulp with a sledgehammer, you didn't get a great deal. Even though a week of my time is worth $2000, and the computer did cost me $2000. I didn't create value, I have *destroyed it*. Just like you spending $2000 on thumb-twiddling machines & burning $2000 of electricity doesn't create $4000 of value, it merely *destroys* it. You mixed the cause and the result: It is demand created competition, and competition in turn increased the cost. In 2009 it cost almost nothing to get bitcoin since there was no serious demand Fiat money on the other hand is a monopole system, no matter how high the demand is, there is no open competition to produce fiat money, thus the production cost will always be zero |
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NotLambchop
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February 25, 2015, 02:44:24 PM |
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At least we're past "it must be worth something if I paid money to get it." Good.
>It is demand created competition, and competition in turn increased the cost.
Sorta. There are different types of demand. The demand here is speculative, meaning "I bet someone will pay me more for this thing later."
That's how all artificial scarcity schemes (see: BTCeanie BTCabies) work.
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picolo
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February 25, 2015, 02:58:22 PM |
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I just created 100 pennies and I loaned them out to you + interest… How is it possible for you to pay me the 101 pennies you now legally owe me if only 100 pennies are in circulation?
I provide a service or sell a merchandise to someone (maybe a bank) who creates one penny to pay me then I can pay you back 101 pennies. |
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