This is hilarious, and if you think this isn't, you're clueless.
Inside One of the World's Largest Bitcoin Mines
41–50 of 105 posts
Re: Inside One of the World's Largest Bitcoin Mines
#42Earlier quoted context omitted.
Yes? Going either by volume or number of transaction, Bitcoin transactions are currently ludicrously expensive, though this is somewhat hidden by subsidizing the miners. I don't know why you mention paper currencies and gold when most money today is transferred electronically, in a far more efficient way than Bitcoins.
I'm not sure if by the time you factor in all the costs of banking (including bail-outs) bitcoin is still ludicrously expensive. And one block will include a whole slew of transactions, that's fixed overhead with economies of scale built in.
Quid Pro Quo: Bank bailouts had positive returns.
Mt. Gox collapsing was a worse wealth loss than bank bail outs, by far.
Re: Inside One of the World's Largest Bitcoin Mines
#43I'm just curious if anyone has insight into how this is economical. Is it economical with current bitcoin prices, or only if prices go up?
This has been discussed many times before, however it's often in context to North America. You specifically have to look for articles that calculate economics of Chinese prices (electricity, building materials, labour, hardware etc) because they differ greatly depending on where you are.
Re: Inside One of the World's Largest Bitcoin Mines
#44This just strikes me as a colossal waste of energy & time. I understand that there may be good profit in doing it, but that doesn't shirk off any of my feelings.
I blame Satoshi for choosing the unfortunate word "mining" as the name of the technical process that confirms bitcoin transactions. I feel it is responsible for a big part of the scammy reputation Bitcoin has today. If only it was called something like "transaction security auditing" or "ledger integrity verification" so that people would take it more seriously for what it really is.
I am not so sure that "transaction security auditing" would be accurate though. That makes it sound like this company is doing something altruistic. The truth is that this facility was created for one simple reason: to earn Bitcoin.
Re: Inside One of the World's Largest Bitcoin Mines
#45This just strikes me as a colossal waste of energy & time. I understand that there may be good profit in doing it, but that doesn't shirk off any of my feelings.
There are alt coins that try to address this. Prime coin is a good example, the algorithm used in mining is trying to find new prime numbers.
Primecoin has nothing to do with finding new prime numbers. It does NOT find new prime numbers, but only finds 'chains of prime numbers'. See http://en.wikipedia.org/wiki/Primecoin
Re: Inside One of the World's Largest Bitcoin Mines
#46Earlier quoted context omitted.
The vast majority of fiat currency in circulation isn't in the form of banknotes or coins. (Gold isn't really a currency anymore, so let's ignore that one.) It exists electronically. In a fractional-reserve system, it's also mostly created by its users, but that happens as a by-product of normal economic activity. And it takes a lot less computer work per economic transaction for a fractional-reserve system to create…
You are completely ignoring the issue. Just because a majority of money exists electronically doesn't mean a lot of money isn't spent on paper and metal versions. The United States alone spends tens of millions of dollars a year on producing pennies - beyond the face value of the pennies. So the entirety spent on mining bitcoin is not too far off from what one country spends just on minting pennies.
It's interesting that you mention pennies because there's a push to have them eliminated. It's almost a cultural phenomenon that they still exist.
http://en.wikipedia.org/wiki/Penny_debate_in_the_United_Stat...
Re: Inside One of the World's Largest Bitcoin Mines
#47Earlier quoted context omitted.
The problem with this is that mining isn't just about reporting hash rates, it's a critical part of the Byzantine failure tolerant consensus algorithm that was bitcoin's key contribution. If miners had a lower duty cycle as you suggest, any dishonest miner could execute a majority attack with little resistance, absent some other kind of mitigation. While proofs of work are wasteful, the only alternative I know of is…
You could keep the blockchain and run with vastly reduced difficulty, but with one alteration: the next block needs to include a specific magic secret number. This magic key is unknowable in advance of a specific time, preventing workers from doing the hash work until the key is 'published'. This forces the miners to pause and not do any hashing for a set time. Now, this gets to the real issue: We need a source for t…
Very interesting idea!
I have a suggestion for how to deal with these magic numbers. Make 9 out of 10 blocks duds (and it should be known in advance which), that contain very little reward. This means that, most mining power will switch of for these blocks, and only be active for the other 1 of 10 blocks.
Re: Inside One of the World's Largest Bitcoin Mines
#48This just strikes me as a colossal waste of energy & time. I understand that there may be good profit in doing it, but that doesn't shirk off any of my feelings.
Would you say that mining gold/diamonds is also a colossal waste of time and energy?
Given the human misery that has always come hand in hand with diamond mining (see http://www.nbcnews.com/id/15842524/ns/world_news/t/diamonds-..., for instance), yeah, that one seems like a tragic waste. All that suffering, just so people far away can have something shiny.
Re: Inside One of the World's Largest Bitcoin Mines
#49This just strikes me as a colossal waste of energy & time. I understand that there may be good profit in doing it, but that doesn't shirk off any of my feelings.
The reason it seems expensive and wasteful is that the costs of current money systems are more hidden.
Re: Inside One of the World's Largest Bitcoin Mines
#50This just strikes me as a colossal waste of energy & time. I understand that there may be good profit in doing it, but that doesn't shirk off any of my feelings.
I couldn't agree more. The overhead must be staggering. New construction, all that equipment to purchase, set up and keep running, the amount of electricity it takes to power the whole thing, monthly warehouse rent.
This has to be a loss leader, I see no way this is a positive ROI anywhere in the near future.