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May 25, 2011, 08:23:06 PM |
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Slowly but surely reading some of the new threads popping up I can gauge that is exactly what new "growthees" expect and those of us who know better should educate them on the other long term values of the bitcoin currency.
Why is it our responsibility? They should know how to research and read, or at least know how to ask a civilized question before chiming in about they alone can see the great Bitcoin flaw (tm). If Bitcoin requires that everyone understand how it works in order to be adopted, it's already a failure. But the facts are that the vast majority of people don't know or care how fiat currencies work, either. When Bitcoin hits the mainstream, most people won't really care how Bitcoin works. They will simply trust their geeky friend that it does work, and start using it little by little. I honestly dont care if they continue to run bitcoin mining or not, I do however believe that the bitcoin "community" is losing out on alot of "new customers" by giving out the vibe that its a "free for all - money fountain" and once that "fountain" dries out then bitcoin cease to exit(thats how alot of people seem to perceive it) I think something must be done to correct that, I dont have the fast solution other than correcting misconceptions in threads like these.
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miner249er
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May 25, 2011, 09:00:33 PM |
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Not really, this is a known-known. The difficulty follows the price; when the price rallies, miners join the fray; and when the price falls, borderline miners drop out first. It's a self-balancing system. Feel free to stand around and not participate, however. That's what I did, and I'm not bitter about missing the rally from 1.4 cents to 6.5 cents before I bought in!
The future is an unknown. In order for the bitcoin price to follow difficulty - assuming 50% increases we would have to see a BTC/USD conversion of ~$20USD per BTC in 3 months. Which signals me to buy bitcoins rather then mine. Sure it's simple supply and demand - but with the finite number of bitcoins that have been mined in active circulation - we don't have what you could call a healthy economy. Those that point out merchants are needed are right. We need to derive a value from these coins other then mining value (which basically pins the currency to hardware/electricity costs along with the hopes/dreams of those buying the coins as an investment). My point in the prior post is that we are hitting a critical crossroads where the seemingly rapid adoption/growth will come to a halt. Being p2p, I agree that there needs to be an incentive to run nodes - but that incentive should come from places other then pure profit. IDEAS are the hardest thing to kill once they get going - unfortunately the bitcoin IDEA represented in these forums seems to be PROFIT. If the system continues to exist as such, there is a good chance that it will simply written off to world history. Currency is medium of exchange, generally not an investment. I advise anyone wishing to see this project survive to invest in companies using bitcoins (purchasing or otherwise), don't invest in bitcoins themselves.
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Basiley
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May 25, 2011, 09:11:36 PM |
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at least i can cheaply collect RMA'ed GPU's for my museum, after mining Boom/madness falloff ![Tongue](https://bitcointalk.org/Smileys/default/tongue.gif)
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w128
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May 25, 2011, 09:43:43 PM |
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Not really, this is a known-known. The difficulty follows the price; when the price rallies, miners join the fray; and when the price falls, borderline miners drop out first. It's a self-balancing system. Feel free to stand around and not participate, however. That's what I did, and I'm not bitter about missing the rally from 1.4 cents to 6.5 cents before I bought in!
The future is an unknown. In order for the bitcoin price to follow difficulty - assuming 50% increases we would have to see a BTC/USD conversion of ~$20USD per BTC in 3 months. Which signals me to buy bitcoins rather then mine. Sure it's simple supply and demand - but with the finite number of bitcoins that have been mined in active circulation - we don't have what you could call a healthy economy. Those that point out merchants are needed are right. We need to derive a value from these coins other then mining value (which basically pins the currency to hardware/electricity costs along with the hopes/dreams of those buying the coins as an investment). My point in the prior post is that we are hitting a critical crossroads where the seemingly rapid adoption/growth will come to a halt. Being p2p, I agree that there needs to be an incentive to run nodes - but that incentive should come from places other then pure profit. IDEAS are the hardest thing to kill once they get going - unfortunately the bitcoin IDEA represented in these forums seems to be PROFIT. If the system continues to exist as such, there is a good chance that it will simply written off to world history. Currency is medium of exchange, generally not an investment. I advise anyone wishing to see this project survive to invest in companies using bitcoins (purchasing or otherwise), don't invest in bitcoins themselves. All good points. The problem I see is that there's an awful lot of "should" in the bitcoin community. I'd wager most of that should is borne from hopes of profit just the same. Lots of people with some amount of bitcoin holdings have bright ideas about what others should do in order to stabilize and legitimize said bitcoin holdings. How many of these people are actually spending with bitcoin shops rather than simply hoarding or cashing out each day? Better yet, how many people would be willing to patronize a bitcoin business that offers the equivalent of a poor exchange rate in order to promote acceptance?
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Syke
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May 26, 2011, 12:05:09 AM |
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Sure it's simple supply and demand - but with the finite number of bitcoins that have been mined in active circulation - we don't have what you could call a healthy economy.
Over 1,000,000 bitcoins have traded on MtGox in the past 30 days. I'd say that's a very healthy amount of circulation on a single exchange. That doesn't count all the other OTC/business/etc trades that are also going on.
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Buy & Hold
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allinvain
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May 26, 2011, 01:20:45 AM |
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mining will ALWAYS be profitable, in the long term. once it becomes unprofitable, people will drop out, causing the difficultly to decrease, which will make it profitable again.
Not quite. Take me for example, I'm paying 0.21 EUR per kwh, and that's about $0.30. So it depends mainly on your energy costs (also: hardware) wheter or not it will always be profitable for you. The guys with bad hardware efficiency (think CPU miners) are going to drop out earlier, as as well I will because of the high eur/kwh costs. If you have low costs and efficient hardware, your statement might be true. But certainly not for everyone (unless I'm moving to the US, but that's not gonna happen). Wow, $0.30 per kwh , where do you guys get your power from? Collection of A-grade call girls generating electricity from washing lines? ![Tongue](https://bitcointalk.org/Smileys/default/tongue.gif) God bless Canada and its cheap electricity ![Cheesy](https://bitcointalk.org/Smileys/default/cheesy.gif) ! I pay max $0.07 per KwH
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hiVe
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May 26, 2011, 07:22:34 PM |
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I said its gonna be 100% increase...people doubted me...now you see ![Kiss](https://bitcointalk.org/Smileys/default/kiss.gif)
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allinvain
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May 26, 2011, 07:58:48 PM |
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*sigh* I gotta throw more GPU power to maintain the same income now..yay for difficulty increases..
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Ian Maxwell
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May 26, 2011, 08:09:52 PM |
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mining will ALWAYS be profitable, in the long term. once it becomes unprofitable, people will drop out, causing the difficultly to decrease, which will make it profitable again.
Even assuming that miners behave in a purely rational profit-seeking way, this statement is only true in a weak sense. What you should write is, "Mining will always be profitable, given that you possess hardware near the current top of the line in terms of mining efficiency." It's certainly not obvious that mining with a GPU will always be profitable, and even less obvious that buying a GPU to mine will always be profitable. If you're trying to imply that current hobbyist miners have nothing to worry about, you're off the mark.
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chungenhung
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May 26, 2011, 08:10:26 PM |
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then please stop mining
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MoonShadow
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May 26, 2011, 08:29:20 PM |
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mining will ALWAYS be profitable, in the long term. once it becomes unprofitable, people will drop out, causing the difficultly to decrease, which will make it profitable again.
Even assuming that miners behave in a purely rational profit-seeking way, this statement is only true in a weak sense. What you should write is, "Mining will always be profitable, given that you possess hardware near the current top of the line in terms of mining efficiency." It's certainly not obvious that mining with a GPU will always be profitable, and even less obvious that buying a GPU to mine will always be profitable. If you're trying to imply that current hobbyist miners have nothing to worry about, you're off the mark. Mining will always be profitable, if you have already paid for your hardware and need to heat your space anyway. Once again, anyone who lives in Iceland probably cannot be undercut by any miner who lives in Florida.
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"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."
- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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allinvain
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May 26, 2011, 08:30:57 PM |
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mining will ALWAYS be profitable, in the long term. once it becomes unprofitable, people will drop out, causing the difficultly to decrease, which will make it profitable again.
Even assuming that miners behave in a purely rational profit-seeking way, this statement is only true in a weak sense. What you should write is, "Mining will always be profitable, given that you possess hardware near the current top of the line in terms of mining efficiency." It's certainly not obvious that mining with a GPU will always be profitable, and even less obvious that buying a GPU to mine will always be profitable. If you're trying to imply that current hobbyist miners have nothing to worry about, you're off the mark. Mining will always be profitable, if you have already paid for your hardware and need to heat your space anyway. Once again, anyone who lives in Iceland probably cannot be undercut by any miner who lives in Florida. True. Iceland could so own this mining market if they wanted to. Cheap and plentiful geothermal energy!
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MoonShadow
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May 26, 2011, 08:33:08 PM |
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mining will ALWAYS be profitable, in the long term. once it becomes unprofitable, people will drop out, causing the difficultly to decrease, which will make it profitable again.
Even assuming that miners behave in a purely rational profit-seeking way, this statement is only true in a weak sense. What you should write is, "Mining will always be profitable, given that you possess hardware near the current top of the line in terms of mining efficiency." It's certainly not obvious that mining with a GPU will always be profitable, and even less obvious that buying a GPU to mine will always be profitable. If you're trying to imply that current hobbyist miners have nothing to worry about, you're off the mark. Mining will always be profitable, if you have already paid for your hardware and need to heat your space anyway. Once again, anyone who lives in Iceland probably cannot be undercut by any miner who lives in Florida. True. Iceland could so own this mining market if they wanted to. Cheap and plentiful geothermal energy! And no other way to effectively export that energy to Europe where it's really needed.
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"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."
- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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Veldy
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May 26, 2011, 09:08:18 PM |
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Assuming you pay for electricity/air conditioning and have a electricity rate of 5.5 cents per kilowatt hour, the next difficulty jump will make mining unprofitable!
when will it happen? mining will ALWAYS be profitable, in the long term. once it becomes unprofitable, people will drop out, causing the difficultly to decrease, which will make it profitable again. Actually, it could hover around net neutral and only if people mine based on pure logic [mine only because it is profitable]. Many people may mine when it isn't profitable for them, because they think it is cool, they didn't bother to calculate their true costs or anticipate a long term appreciation of their minted coins. I think [and hope] what this will do is stop people from recklessly buying hardware to mine as it simple increases the difficulty and in a relatively short amount of time neutralizes their investment. Those at the bottom of the hash rate contribution will probably be forced out due to a lack of any return at all due to people like this [meaning they didn't think it through and destroyed it for others while not making anything more than short term gains on their investment that probably requires long-term to payoff]. I have seen posts here for people wiling to drop $10K on multiple rigs with no real idea how the bitcoin economy works or how they are going to earn that money back. These people are who I fear most as it takes mining out of reach of the smaller miner just using a single GPU [even a high quality one] to make any significant profit at all. The same people that cause this will themselves lose as difficulty adjusts. In the end, the economy will win and BTC/hr will hover around 6 and those monster rigs are going to be energy hungry machines, often accumulating interest owed on their credit cards. There will always be big miners and and small miners as it should be [until all the coins are minted anyway]. I just fear that those with big pocket books and in some cases, lack of forethought may take the fun of this venture away from the average miner. In case it isn't obvious, but once a new piece of hardware comes out that significantly increases MH/s [per watt], there will be another run on difficulty even if it levels out for a time. Further, it will make the newer leading edge GPUs out of reach in cost for gamers as long as AMD GPUs are the mining hardware of choice. The sad thing is that I like to game, but I prefer NVidia gaming hardware for it's stability, features, and, perhaps most of all, their high quality drivers [I still can't watch a video of any kind while mining on this machine until they fix the driver .... worked just fine with latest generation NVidia hardware drivers]. I let ATI (AMD) go in 2007 for these reasons and the fact that the hardware just didn't perform as well and was over priced .... and bitcoin has not done much to change that and a lot to hurt that.
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BitterTea
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May 26, 2011, 09:20:20 PM |
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mining will ALWAYS be profitable, in the long term. once it becomes unprofitable, people will drop out, causing the difficultly to decrease, which will make it profitable again.
Even assuming that miners behave in a purely rational profit-seeking way, this statement is only true in a weak sense. What you should write is, "Mining will always be profitable, given that you possess hardware near the current top of the line in terms of mining efficiency." It's certainly not obvious that mining with a GPU will always be profitable, and even less obvious that buying a GPU to mine will always be profitable. If you're trying to imply that current hobbyist miners have nothing to worry about, you're off the mark. In the future, hobbyists will have more powerful computers, so I think it will be true for a long time that hobbyist mining is profitable, just not as profitable as professional mining.
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Meatball
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May 26, 2011, 09:21:38 PM |
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Alright, so I'm a relative noob to the BTC world, but I keep seeing these doom and gloom predictions that mining will become unprofitable and I don't get it. Yes, the network will increase in difficulty and yes, your rig may not be making as many bitcoins as it once used to, but considering bitcoins will become scarcer, their value should go up and keep it profitable.
I could be completely off base, but you can see the same thing happening in the real world. Oil, gold, etc., as it get's harder to 'mine' something and you need ever more expensive equipment to do it, the item will be worth more when you do get it.
I know this is an overly simplistic view of things, but at some point, you will need to buy more expensive equipment to mine bitcoins. I'm sure there's a lot of folks that used to CPU mine that had to move to GPU's, and at some point GPU's will be surpassed by the next big jump in mining power, but theoretically, the coins should be worth more, so it should be a wash.
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BitterTea
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May 26, 2011, 09:22:55 PM |
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Alright, so I'm a relative noob to the BTC world, but I keep seeing these doom and gloom predictions that mining will become unprofitable and I don't get it. Yes, the network will increase in difficulty and yes, your rig may not be making as many bitcoins as it once used to, but considering bitcoins will become scarcer, their value should go up and keep it profitable.
I could be completely off base, but you can see the same thing happening in the real world. Oil, gold, etc., as it get's harder to 'mine' something and you need ever more expensive equipment to do it, the item will be worth more when you do get it.
I know this is an overly simplistic view of things, but at some point, you will need to buy more expensive equipment to mine bitcoins. I'm sure there's a lot of folks that used to CPU mine that had to move to GPU's, and at some point GPU's will be surpassed by the next big jump in mining power, but theoretically, the coins should be worth more, so it should be a wash. Some people believe that mining will not be profitable, others believe it will. Only time will tell. For the record, I agree with you.
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w128
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May 26, 2011, 09:28:43 PM |
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Assuming you pay for electricity/air conditioning and have a electricity rate of 5.5 cents per kilowatt hour, the next difficulty jump will make mining unprofitable!
when will it happen? mining will ALWAYS be profitable, in the long term. once it becomes unprofitable, people will drop out, causing the difficultly to decrease, which will make it profitable again. Actually, it could hover around net neutral and only if people mine based on pure logic [mine only because it is profitable]. Many people may mine when it isn't profitable for them, because they think it is cool, they didn't bother to calculate their true costs or anticipate a long term appreciation of their minted coins. I think [and hope] what this will do is stop people from recklessly buying hardware to mine as it simple increases the difficulty and in a relatively short amount of time neutralizes their investment. Those at the bottom of the hash rate contribution will probably be forced out due to a lack of any return at all due to people like this [meaning they didn't think it through and destroyed it for others while not making anything more than short term gains on their investment that probably requires long-term to payoff]. I have seen posts here for people wiling to drop $10K on multiple rigs with no real idea how the bitcoin economy works or how they are going to earn that money back. These people are who I fear most as it takes mining out of reach of the smaller miner just using a single GPU [even a high quality one] to make any significant profit at all. The same people that cause this will themselves lose as difficulty adjusts. In the end, the economy will win and BTC/hr will hover around 6 and those monster rigs are going to be energy hungry machines, often accumulating interest owed on their credit cards. There will always be big miners and and small miners as it should be [until all the coins are minted anyway]. I just fear that those with big pocket books and in some cases, lack of forethought may take the fun of this venture away from the average miner. In case it isn't obvious, but once a new piece of hardware comes out that significantly increases MH/s [per watt], there will be another run on difficulty even if it levels out for a time. Further, it will make the newer leading edge GPUs out of reach in cost for gamers as long as AMD GPUs are the mining hardware of choice. The sad thing is that I like to game, but I prefer NVidia gaming hardware for it's stability, features, and, perhaps most of all, their high quality drivers [I still can't watch a video of any kind while mining on this machine until they fix the driver .... worked just fine with latest generation NVidia hardware drivers]. I let ATI (AMD) go in 2007 for these reasons and the fact that the hardware just didn't perform as well and was over priced .... and bitcoin has not done much to change that and a lot to hurt that. Great points up until you apparently took a hit of the crack pipe prior to that last paragraph. Even the kids who popularized the whole "ATI has no drivers!" nonsense have stopped trolling with that by now. Admittedly, there was a time when ATI was shipping poor drivers but, it's ancient history by now and they certainly never released anything quite as outright dangerous as the 196.75 house fire update. Furthermore, ATI cards have only been overpriced in recent years due to a complete lack of competitive product from Nvidia. That's supply and demand, not ATI's fault.
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Veldy
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May 26, 2011, 09:36:27 PM |
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Alright, so I'm a relative noob to the BTC world, but I keep seeing these doom and gloom predictions that mining will become unprofitable and I don't get it. Yes, the network will increase in difficulty and yes, your rig may not be making as many bitcoins as it once used to, but considering bitcoins will become scarcer, their value should go up and keep it profitable.
I could be completely off base, but you can see the same thing happening in the real world. Oil, gold, etc., as it get's harder to 'mine' something and you need ever more expensive equipment to do it, the item will be worth more when you do get it.
I know this is an overly simplistic view of things, but at some point, you will need to buy more expensive equipment to mine bitcoins. I'm sure there's a lot of folks that used to CPU mine that had to move to GPU's, and at some point GPU's will be surpassed by the next big jump in mining power, but theoretically, the coins should be worth more, so it should be a wash.
There are people out there, who for various reasons (most because of lack of forethought, but not all) will mine at a loss [meaning hardware maintenance and energy costs will exceed BTC revenue] and it is those people who make it difficult for the smaller miner. The more there are, the worse the problem for the small guy. So yes, there is a doom and gloom scenario, but the question is really to what extent it will become or stay a problem.
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xenon481
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May 26, 2011, 09:39:04 PM |
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I said its gonna be 100% increase...people doubted me...now you see ![Kiss](https://bitcointalk.org/Smileys/default/kiss.gif) You absolutely were wrong. The increase was estimated around 72% when you made your 100% prediction and it ended up being closer to 75%. Not 100%.
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Tips Appreciated: 171TQ2wJg7bxj2q68VNibU75YZB22b7ZDr
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