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Bitcoin Miner does the math, calls it quits

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Re: Bitcoin Miner does the math, calls it quits

#21

Post by parfe »

pavel_lishin wrote: post #4

> The fact that every 2016 blocks (about 11 days), 100,800 new BTC are minted. That means that, to maintain the CURRENT price of $13.50, we'd need $1,360,000 of NEW MONEY entering the system every 11 days. I don't know anything about economics - literally nothing - but that doesn't seem right to me.

I think generating bitcoins is a way to have controlled inflation and to distribute new bitcoins into the economy as fairly as possible.

The value of bitcoins should (and hopefully eventually will) be worth their value in work/productivity/product beyond the effort it takes to create a new one.

Yes, bitcoins are overvalued due to media hype the same way hot IPOs are. Eventually the price will settle and the value will be determined by market conditions rather than gold rush demand.

Then again, I would never waste my time.

Re: Bitcoin Miner does the math, calls it quits

#22

Post by gravitronic »

DarkShikari wrote: post #19
gravitronic wrote: post #14

Earlier quoted context omitted.

Bitcoins are not generated at a constant rate. The difficulty of generating bitcoins increases exponentially over time, so the number of bitcoins generated by the pool (assuming the pool remains the same size) will decrease accordingly. However the pool didn't remain the same in the past. All the BTC press (and $10 USD rate) substantially increased the number of people mining. This sped up the discovery of bitcoins b…

The difficulty of generating bitcoins increases exponentially over time No, it changes in proportion to the number of blocks generated in the past week or two. This could even result in a decrease if the number of miners decrease.

.. really? Interesting! Thank you for the correction, I've been reading enough about BTC while considering mining and this is the first time I've heard this.

Re: Bitcoin Miner does the math, calls it quits

#23

Post by MichaelApproved »

inportb wrote: post #11
MichaelApproved wrote: post #7

Earlier quoted context omitted.

Why buy a new machine after 3 months? Once it makes back it's cost, wouldn't you still be able to earn money from it so long as it can cover the cost of running and storing it?

No, because of the increased difficulty. However, nobody said anything about buying a new machine. It should be sufficient to upgrade the graphics processor...

I think there was an edit in the parent from something like "new machine" to "upgrade" while I was writing the reply. Of course, I could've misread it too.

Re: Bitcoin Miner does the math, calls it quits

#24

Post by MichaelApproved »

podperson wrote: post #16
MichaelApproved wrote: post #7

Earlier quoted context omitted.

Why buy a new machine after 3 months? Once it makes back it's cost, wouldn't you still be able to earn money from it so long as it can cover the cost of running and storing it?

Only if more performance/watt machines haven't driven the output of your machines below the cost of electricity.

Wow. I know very little about mining and had no idea that the market moved that fast.

Re: Bitcoin Miner does the math, calls it quits

#26

Post by DarkShikari »

gravitronic wrote: post #22
DarkShikari wrote: post #19

Earlier quoted context omitted.

The difficulty of generating bitcoins increases exponentially over time No, it changes in proportion to the number of blocks generated in the past week or two. This could even result in a decrease if the number of miners decrease.

.. really? Interesting! Thank you for the correction, I've been reading enough about BTC while considering mining and this is the first time I've heard this.

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

The difficulty is adjusted every 2016 blocks based on the time it took to find the previous 2016 blocks. At the desired rate of one block each 10 minutes, 2016 blocks would take exactly two weeks to find. If the previous 2016 blocks took more than two weeks to find, the difficulty is reduced. If they took less than two weeks, the difficulty is increased. The change in difficulty is in proportion to the amount of time over or under two weeks the previous 2016 blocks took to find.

Re: Bitcoin Miner does the math, calls it quits

#27

Post by pavel_lishin »

parfe wrote: post #21
pavel_lishin wrote: post #4

> The fact that every 2016 blocks (about 11 days), 100,800 new BTC are minted. That means that, to maintain the CURRENT price of $13.50, we'd need $1,360,000 of NEW MONEY entering the system every 11 days. I don't know anything about economics - literally nothing - but that doesn't seem right to me.

I think generating bitcoins is a way to have controlled inflation and to distribute new bitcoins into the economy as fairly as possible. The value of bitcoins should (and hopefully eventually will) be worth their value in work/productivity/product beyond the effort it takes to create a new one. Yes, bitcoins are overvalued due to media hype the same way hot IPOs are. Eventually the price will settle and the value wil…

I meant specifically, when he said that for a currency to stay at a certain rate, it means money must be flowing into it.

Re: Bitcoin Miner does the math, calls it quits

#28

Post by iter8n »

eropple wrote: post #17
wladimir wrote: post #9

Earlier quoted context omitted.

Start? People have been thinking (and working) on that even before the hype began (see for example the Android client now on the frontpage, or the new client UI being developed, wallet encryption being tested now, and various web payment services), it just gets drowned in all the trolling, mining related talk and price speculation.

What you call "trolling," others call "pointing out the obvious flaws in an unsustainable system."

There is plenty of noise on either side.. if you want to look at it like that.

Re: Bitcoin Miner does the math, calls it quits

#29

Post by stonemetal »

JulianMorrison wrote: post #10

Seems pretty obvious to me that "mining" is a loser's game, you are fighting over what slice you get of a fixed size pie. By contrast, selling stuff for BTC actually grows the "market cap" of coins, that seems a lot more sensible. That said, I have a technical question. What happens to the BTC system if people mostly quit mining?

The system contracts and it becomes easier to mine. As long as the number of clients doesn't approach zero, transactions should be OK.
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