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Bitcoin Block #210 000 mined - reward halving

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Re: Bitcoin Block #210 000 mined - reward halving

#91

Post by cwkoss »

gojomo wrote: post #75
rfugger wrote: post #57

Earlier quoted context omitted.

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…

>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.

Some people use mining as a way to privately purchase Bitcoins, and/or are speculating that the value will rise long term. Some would rather pay $105 of power and not have a banking paper trail connecting them to their coin purchases (usually because they are kind of paranoid or doing something legally questionable) than pay $100 to purchase the coins on an exchange.

Also, if you've never mined, there is something kind of geek-magical about creating money with your computer.

Re: Bitcoin Block #210 000 mined - reward halving

#92

Post by cwkoss »

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.

Well, if you are mining as a hobby, you get to write off all of your expenses before having pay taxes on any profits.

Want a new top-of-the-line graphics card? Until it pays for itself, you don't owe any taxes. (In the us, from my understanding. IANAL, IANACPA)

Re: Bitcoin Block #210 000 mined - reward halving

#93

Post by gojomo »

cwkoss wrote: post #91
gojomo wrote: post #75

Earlier quoted context omitted.

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…

>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. Some people use mining as a way to privately purchase Bitcoins, and/or are speculating that the value will rise long term. Some would rather pay $105 of power and not have a banking paper trail connecting them to their coin purchases (usual…

Yes, sure. I've mined, and even mined for a bit at an occasional loss after hitting punitive over-baseline electric rates).

But it's farfetched to predict that everyone who was willing to do something when the bitcoin reward was X will still be willing to do it, in the exact same amount, when the reward is reduced to X/2. (Even if the goal is 'anonymous bitcoins' at above-market rates, they've still become twice as costly.) Demand curves slope down, supply curves slope up, exceptions are rare and not in evidence here.

Re: Bitcoin Block #210 000 mined - reward halving

#95

Post by graue »

cwkoss wrote: post #92
graue wrote: post #65

Earlier quoted context omitted.

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.

Well, if you are mining as a hobby, you get to write off all of your expenses before having pay taxes on any profits. Want a new top-of-the-line graphics card? Until it pays for itself, you don't owe any taxes. (In the us, from my understanding. IANAL, IANACPA)

I was thinking more along the lines of, based on mrb's figures, buying 11 FPGA boards and letting them pay my rent. That's substantial enough profit that if I didn't file properly, I'd be worried about a knock on the door from the IRS.

Re: Bitcoin Block #210 000 mined - reward halving

#96

Post by hxc »

Kilimanjaro wrote: post #62

After the bitcoin debacle, it went from $30+ to $3- and I knew if it were to rebound to that same price again, that would be the perfect time to buy. Three dollars, now I regret it.

I bailed out and sold my 100 btc at 5$ and then patted myself on the back when it hit 3$. I didn't buy back in like I should have and now I am kicking myself in the ass.

Re: Bitcoin Block #210 000 mined - reward halving

#97

Post by alexmat »

graue wrote: post #60
bencoder wrote: post #37

Earlier quoted context omitted.

Hard drive and network cost per gigabyte is always falling, and much faster than the blockchain is increasing, so it's not expected this will be a huge problem. But what you say is true that it will "centralise" more in a sense - but the barriers to entry will still be much smaller than any other financial institution so there will likely be many groups still involved with processing the block chain. If it's just the…

However, using Electrum entails putting significant trust in the third party that hosts the blockchain for you (and it's not clearly identified on the Electrum website who that is). See past discussion: https://news.ycombinator.com/item?id=4836269 If I were going to trust a third party to begin with, I'd just go with a hosted wallet like Coinbase. They seem more reputable to me than whoever's behind the Electrum proj…

* Transactions are signed locally: Your private keys are not shared with the server. You do not have to trust the server with your money.

* Freedom and Privacy: The server does not store user accounts. You are not tied to a particular server, and the server does not need to know you.

* No scripts: Electrum does not download any script. A compromised server cannot send you arbitrary code and steal your bitcoins.

* No single point of failure: The server code is open source, anyone can run a server.

https://en.bitcoin.it/wiki/Electrum

Re: Bitcoin Block #210 000 mined - reward halving

#98

Post by kaiuhl »

duiker101 wrote: post #29
kylec wrote: post #23

The fireworks and sound were extremely annoying. I'm not used to web pages making noise on my iPhone and was unprepared for it.

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

May I suggest a bookmarklet I created called PARTYMODE?

http://wenthiking.com/partymode

Re: Bitcoin Block #210 000 mined - reward halving

#99

Post by javert »

Kilimanjaro wrote: post #62

After the bitcoin debacle, it went from $30+ to $3- and I knew if it were to rebound to that same price again, that would be the perfect time to buy. Three dollars, now I regret it.

Don't let yourself make the same mistake again. I'm thinking of buying some more soon.

Re: Bitcoin Block #210 000 mined - reward halving

#100

Post by sequoia »

graue wrote: post #95
cwkoss wrote: post #92

Earlier quoted context omitted.

Well, if you are mining as a hobby, you get to write off all of your expenses before having pay taxes on any profits. Want a new top-of-the-line graphics card? Until it pays for itself, you don't owe any taxes. (In the us, from my understanding. IANAL, IANACPA)

I was thinking more along the lines of, based on mrb's figures, buying 11 FPGA boards and letting them pay my rent. That's substantial enough profit that if I didn't file properly, I'd be worried about a knock on the door from the IRS.

> Eg. each one of my Cairnsmore1 FPGA boards makes about $43/month, after the halving. ... I paid $640 for each one.

11 boards... do you have $6500 laying around? And you'll invest it to make a (possible, read: Your Milage WILL Vary) return of ~$450/mo? Shoot for the moon, I guess...

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