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Bitcoin Block #210 000 mined - reward halving

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Re: Bitcoin Block #210 000 mined - reward halving

#71

Post by frisco »

motters wrote: post #25

Bitcoin is looking increasingly less practical. The size of the block chain is becoming massive. Recently I tried downloading the official client, and after 2.8GB of downloading with the progress bar only about half way through I gave up. If Bitcoin becomes more popular in future the block chain really isn't going to scale well, and that's going to result in a more centralized system in which there are fewer block ch…

You don't need to store the entire block chain in every client, even in a model where you don't want to trust a third party server. Most of the block chain is "dead," in that the coins in those transactions have changed hands since then. You can drop those transactions as they can't affect anything. Further, since the block chain contains a Merkle tree, each client only needs to have log(n) blocks on hand to validate the entire tree (i.e., provided by someone else or federated across the network).

There's a lot of compression possible that the client hasn't bothered with yet. The community expects this to eventually be a solved problem.

Re: Bitcoin Block #210 000 mined - reward halving

#73

Post by vitno »

graue wrote: post #65
mrb wrote: post #45

Earlier quoted context omitted.

This person is misinformed. Mining is still quite profitable to many of us. Eg. each one of my Cairnsmore1 FPGA boards makes about $43/month, after the halving. Before the halving, they made $86/month. I paid $640 for each one. Electrical cost for one of them (40W) is $2.90/month at the worldwide average rate of $0.10/kWh.

This sounds like good business. Any links on getting started? I'm especially curious about the legal aspects like how you report mined-Bitcoin income when you do taxes.

people who mine bitcoins probably don't report that on their takes.

Re: Bitcoin Block #210 000 mined - reward halving

#74

Post by debacle »

jeremyjh wrote: post #67
mrb wrote: post #59

Earlier quoted context omitted.

You can make your money back in 3 months. Because after 3 months you would have mined $129, and the resale value of the board is at least $500 on eBay. So, in essence, anything mined after 3 months is pure profits. However I don't recommend anyone to buy FPGAs right now, as ASICs are coming in December/January, and they will change the game. Transactions fees only increase my revenues by ~1%.

What do you think the resale value of that board will be after everyone switches to the next great tech? The long-term trend for BTC mining is always going to be that it is not profitable for people who pay average or above-average for electricity. If you invest capital at the right point in a tech-surge then I'm sure you can see some profits but this business has almost no barrier to entry so you should not expect i…

From what I know about BTC, it's engineered so that the currency is constantly operating and "peak mining" - if mining begins to fall off, within a certain number of cycles mining will become easier, thus making mining more profitable again.

Re: Bitcoin Block #210 000 mined - reward halving

#75

Post by gojomo »

rfugger wrote: post #57
pixelcort wrote: post #21

Looks like the exchange rate didn't fluctuate too much during this time: http://bitcoincharts.com/charts/mtgoxUSD#rg5ztgSzbgBzm1g10zm... I wonder what will happen to the difficulty over the next couple days: http://bitcoin.sipa.be/ Considering the exchange rate remained stable, I expect the difficulty to halve.

Difficulty would only halve if none of the miners had anticipated the block reward halving.

Anticipation could have affected exchange rates earlier. Also affected: prior investment in rigs given expected-payback and risk levels.

But the decision "with my current fixed plant, do I mine this hour, or not?" is unaffected by anticipation. Either the expected-reward is enough to pay incremental costs, or not.

The expected reward for the same hashing power is now half what it was. Surely, some marginal miners who were only slightly profitable before are now non-profitable. It may take them a while to notice, but when they do, they're likely to drop out. But this is far from half of the mining capacity, and other rigs that are still profitable at the new reward rate are still coming online.

I expect difficulty to trend down a bit in the very short term... but not by half, and not for long as lower-power rigs continue to come online.

Re: Bitcoin Block #210 000 mined - reward halving

#76

Post by TomatoTomato »

IgorPartola wrote: post #69
nullc wrote: post #50

Earlier quoted context omitted.

I expect the moon to be made of green cheese. ... GPU mining is still fairly profitable with the half reward for ~most people (those who don't have electricity over $.15/kwh or so). My expectation is that the difficulty is currently lower than its proper equilibrium because people have opted to not purchase more GPUs while anticipating the introduction of ASIC devices.

Where do you get the $0.15/kWh figure from? I am curious, since this seems to make it sound like there is a stable formula for converting kWh's to BTC's. That will of course depend on the exchange rate, but I'd like to see the figures.

http://bitcoinx.com/profit/

Settings: Profitability decline = 1, Hardware Cost = 0, Time Frame (months) = .033333 (1 day), Electricity Cost = $0.15

Profit: -0.56 USD/day

For this example (1200MH @ 750W) you need electricity to be My rig (2x7970) does about (1400MH @ 650W) and electricity @ $0.16 is my break even point (Profit: 0.01 USD/day)

Re: Bitcoin Block #210 000 mined - reward halving

#77

Post by jamoes »

yebyen wrote: post #44
ewillbefull wrote: post #39

Earlier quoted context omitted.

What are you talking about? Check out the wiki page: https://en.bitcoin.it/wiki/Controlled_Currency_Supply#Projec... It's supposed to halve 33 times.

I am the one who is misinformed! I was also wondering how to reconcile this (seemingly very) early first halving with my concept of a 21 year bitcoin generation span. Thanks for clearing that up! *edit: Turns out I was misinformed about the 21 year thing too. These projections have the halving terminating estimated at 2140. Don't suppose either of us will be around to see it.

And, actually, it may continue well beyond 2140. The only reason it would stop there is because the smallest value bitcoin can currently represent is 0.00000001 BTC (1e-8). Many people believe that the rising value of bitcoin will bring about a need to increase the number of decimal places that bitcoin supports. If this change is made to the protocol before 2140, the the mining reward will probably keep on halving to values even less than 1e-8 BTC.

Re: Bitcoin Block #210 000 mined - reward halving

#78

Post by jeremyjh »

debacle wrote: post #74
jeremyjh wrote: post #67

Earlier quoted context omitted.

What do you think the resale value of that board will be after everyone switches to the next great tech? The long-term trend for BTC mining is always going to be that it is not profitable for people who pay average or above-average for electricity. If you invest capital at the right point in a tech-surge then I'm sure you can see some profits but this business has almost no barrier to entry so you should not expect i…

From what I know about BTC, it's engineered so that the currency is constantly operating and "peak mining" - if mining begins to fall off, within a certain number of cycles mining will become easier, thus making mining more profitable again.

The point of that is to keep the rate of block solutions relatively constant, regardless of how many people are mining. After the last big price crash, it was instantly extremely unprofitable to do any mining, and the number of miners crashed overnight. eBay was flooded with 3d video cards. So the difficulty came down again until blocks were being solved regularly, but no one was making any money unless they weren't seeing their electric bill (or had really low local rates).

Re: Bitcoin Block #210 000 mined - reward halving

#79

Post by rhizome »

ShawnBird wrote: post #64
duiker101 wrote: post #29

Earlier quoted context omitted.

Nobody is, that's why it's usually pissing everyone. A "Party" button might have done a better job.

Some kind of fuse or something to show what was about to happen with a 'stop' button might have been better. I don't think anyone would click a 'party' button.

1998 called, they want their everything back.

Re: Bitcoin Block #210 000 mined - reward halving

#80

Post by alaaibrahim »

graue wrote: post #65
mrb wrote: post #45

Earlier quoted context omitted.

This person is misinformed. Mining is still quite profitable to many of us. Eg. each one of my Cairnsmore1 FPGA boards makes about $43/month, after the halving. Before the halving, they made $86/month. I paid $640 for each one. Electrical cost for one of them (40W) is $2.90/month at the worldwide average rate of $0.10/kWh.

This sounds like good business. Any links on getting started? I'm especially curious about the legal aspects like how you report mined-Bitcoin income when you do taxes.

I don't think that the government could tax it, as it's not money :) I'm not a lawyer or anything even close, but if your income is not money, but something else (e.g. potatoes), would that be taxed?
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