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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

#51

Post by tghw »

gravitronic wrote: post #14
tibbon wrote: post #6

What's interesting, is that this is what should happen. Since Bitcoins are generated at a constant rate (from my understanding) regardless of how many people are working on them, the market should eventually even out so that its a break-even at best. Likely it will be a little worse than break-even, because there are always some people out there willing to attempt to generate coins even if what they are doing doesn't…

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 goal of changing the difficulty is to maintain a constant rate. As the computational power dedicated to mining Bitcoins increases, the difficulty increases proportionately, to keep the overall rate of Bitcoin discovery more or less constant.

If tomorrow, everyone agreed with this guy and quit mining, the next difficulty adjustment would make it easier to mine Bitcoins, to keep the constant rate with a smaller pool.

Re: Bitcoin Miner does the math, calls it quits

#52

Post by dspillett »

omouse wrote: post #46
JonnieCache wrote: post #40

Earlier quoted context omitted.

He mentions the power usage, people do get reported over that. However the police also check for unusual heat signatures coming out of buildings at night, that could also have been what happened. Interestingly, in some jurisdictions (notably canada) looking through someone's roof with an IR camera constitues an invasion of privacy, and requires a warrant. Looking forward to the future when Bitcoin gets banned, and we…

However the police also check for unusual heat signatures coming out of buildings at night, that could also have been what happened. Uh, wtf, since when? They're allowed to do this without a warrant? They just randomly drive along the streets and check heat signatures? Looking forward to the future when Bitcoin gets banned, and we see documentaries with police officers breaking down makeshift barricades to gain entry…

> Uh, wtf, since when? They're allowed to do this without a warrant? They just randomly drive along the streets and check heat signatures?

There were pictures in an article I saw talking about one such raid that was taken from the air, so they are probably doing it from police helicopters. It makes sense - if you have the thing in the air anyway (perhaps returning to base having helped out with some chase) make better use of the fuel it is consuming by sweeping the IR cameras around on the offchance of spotting something odd.

Any yes, in many (but not all) jurisdictions this is something they can do without a warrant.

Re: Bitcoin Miner does the math, calls it quits

#53

Post by lmkg »

omouse wrote: post #46
JonnieCache wrote: post #40

Earlier quoted context omitted.

He mentions the power usage, people do get reported over that. However the police also check for unusual heat signatures coming out of buildings at night, that could also have been what happened. Interestingly, in some jurisdictions (notably canada) looking through someone's roof with an IR camera constitues an invasion of privacy, and requires a warrant. Looking forward to the future when Bitcoin gets banned, and we…

However the police also check for unusual heat signatures coming out of buildings at night, that could also have been what happened. Uh, wtf, since when? They're allowed to do this without a warrant? They just randomly drive along the streets and check heat signatures? Looking forward to the future when Bitcoin gets banned, and we see documentaries with police officers breaking down makeshift barricades to gain entry…

> Uh, wtf, since when? They're allowed to do this without a warrant? They just randomly drive along the streets and check heat signatures?

"Emissions" are part of a Constitutional gray area because of the murky definition of privacy, but generally cops are allowed to utilize them. Heat signatures are not placed in the same category as wiretaps, but rather in the same category as walking down the street and happening to see something through someone's open window. The reasoning is that the heat information is "broadcasted" and therefore publicly available.

And the cops don't cruise around examining heat signatures. They do fly-overs. That, and stake-outs.

Re: Bitcoin Miner does the math, calls it quits

#54

Post by teadrinker »

jonnathanson wrote: post #41
tibbon wrote: post #6

What's interesting, is that this is what should happen. Since Bitcoins are generated at a constant rate (from my understanding) regardless of how many people are working on them, the market should eventually even out so that its a break-even at best. Likely it will be a little worse than break-even, because there are always some people out there willing to attempt to generate coins even if what they are doing doesn't…

Likely it will be a little worse than break-even, because there are always some people out there willing to attempt to generate coins even if what they are doing doesn't financially make sense, breaking the market. I'd guess that the percentage of miners and speculators in the BTC market who are economically irrational in their activities is a lot higher than most of us think it is. Ergo, I don't place too much faith…

Not to mention the lack of proper regulation. Particularly at the exchanges: http://nerdr.com/bitcoin-exchange-scam-bitcoins-are-worthles...

I was days away from entering the Bitcoin marketplace until I read that. Now I realize it's speculation propping up an artificial market price. Saying that, I would be open to hearing opinions on estimates of the true value of a Bitcoin, based on it's use cases and value proposition if anyone has any...

Re: Bitcoin Miner does the math, calls it quits

#56

Post by sireat »

I should point out that this is classic blogspam: You can see that the forum linked is dead except this one link.

Original post where the text was copied from is this: https://forum.bitcoin.org/index.php?topic=26099.msg325505#ms...

Incidentally, the original poster is fairly infamous troll/critic in the biggest bitcoin forum. (Sadly, I agree with most of his conclusions and pessimism).

Pretty sure it is NOT original posters forum, someone just took his text to stir up some traffic for his forum.

Re: Bitcoin Miner does the math, calls it quits

#57

Post by Swannie »

nextparadigms wrote: post #49
sp332 wrote: post #12

Earlier quoted context omitted.

In fact, it's worse than that, because the global rate of BTC production goes down over time. After 2025, hardly any new bitcoins will be generated. https://secure.wikimedia.org/wikipedia/en/wiki/Bitcoin#Monet...

That's the whole point. As the amount of Bitcoins gets closer to the maxim, it will become harder and harder to mine them. But ideally, this should be overcome by Bitcoin's increasing popularity and value. This isn't happening right now, and it appears to have stagnated, but that's not a problem for Bitcoin's future, because the continous mining of Bitcoin is not necessary to ensure its success. This simply means tha…

Isn't the expectation that the miners will compete to confirm transactions, and there is an expectation they will work for small transaction fees?

Re: Bitcoin Miner does the math, calls it quits

#58

Post by fr0sty »

tibbon wrote: post #6

What's interesting, is that this is what should happen. Since Bitcoins are generated at a constant rate (from my understanding) regardless of how many people are working on them, the market should eventually even out so that its a break-even at best. Likely it will be a little worse than break-even, because there are always some people out there willing to attempt to generate coins even if what they are doing doesn't…

> Likely it will be a little worse than break-even

Only if you are marking against the current market price for bitcoins, which is not necessarily the best way to look at this.

1. Conversion Costs: Converting USD->BTC is currently very cumbersome so it may be worthwhile to go USD->Mining-Rig->BTC instead if only to avoid the hassle (as well as securing a low-cost source of BTC going forward after the Rig has paid for itself.

2. Market impact: Buying BTC on the open market will put short-term upward pressure on the price which is bad if you are trying to accumulate a position (especially in the aggregate). Mining them nets you an increasing BTC position without this impact.

3. Pricing against expected value: Many miners likely believe that the current market price is artificially low and are not 'marking' their mining efforts against this. Unless the miners are simply churning their BTC into other currency at the spot price this is entirely reasonable[1]. If/When the exchange rate goes up to the effective price the mined bitcoins will be 'worth it'.

[1] This only really holds if you don't have an alternative way to convert USD->BTC (see #1) or don't have any USD to convert. If you did you would buy the cheap BTC with cash instead of paying to mine.

Re: Bitcoin Miner does the math, calls it quits

#59

Post by weavejester »

sp332 wrote: post #12
tibbon wrote: post #6

What's interesting, is that this is what should happen. Since Bitcoins are generated at a constant rate (from my understanding) regardless of how many people are working on them, the market should eventually even out so that its a break-even at best. Likely it will be a little worse than break-even, because there are always some people out there willing to attempt to generate coins even if what they are doing doesn't…

In fact, it's worse than that, because the global rate of BTC production goes down over time. After 2025, hardly any new bitcoins will be generated. https://secure.wikimedia.org/wikipedia/en/wiki/Bitcoin#Monet...

Beyond a certain point the majority of the mining reward will come from transaction fees.

Re: Bitcoin Miner does the math, calls it quits

#60

Post by btilly »

No surpriseWhen you're competing against people who are doing bitcoin mining using someone else's resources (eg http://thenextweb.com/au/2011/06/23/abc-employee-caught-mini...) then bitcoin mining will not be cost effective for you unless you are using someone else's resources as well.
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