Topic: $504000 per day (Read 16609 times)

This is bad for TRC But what if someone will attack it again after the network gets back to normal? 

Possibly just a big FPGA rig is more likely

As far as most people know ASIC for LTC is not possible or is a far ways off due to different computational method.  It's the SHA256 cryptos that are getting bulldozed.

That will be a problem for the budding sub-currencies under Bitcoin as these super powerful devices come online. Those markets are too fragile to power dump on. Bitcoin went through a natural progression in size and computing power. LTC/TRC may have some headache as that high level tech is being applied to it way too early.

hey friends, TRC was hit by one of the asics and is lagging and they put in a historical fix, and we just need to get through 2 Blocks, and we will be out of our bind.  but the increased difficulty has scared the miners away, if anyone could spare any mining power for half an hour for the TRC cause, it would be so helpful right now.

thank you

and I know TRC doesn't belong over on BTC

As the currency war progresses, and Bitcoin keeps expanding, miners will be forced to start using their coin to buy the necessary hardware to stay competitive. Until now it was more or less a garage experiment that no one predicted would do what it's doing now. There was simply nothing much to do with BTC after you mined it in the early days as no one accepted them really, so it has just been piling up in these accounts a while.

But that is changing now with more and more merchants hopping on board, and competition due to the ASIC wave that is inbound will increase dramatically. Garage GPU mines will either move forward in the new industry and throw down the big bucks to go Pro, move to Litecoin/Terracoin or some other BTC derived economy, or just sell their rigs and shut down altogether.

Such short term thinking, keep focus on the larger picture and the Bitcoin protocol's viability looks a lot rosier. We are about to enter the big leagues here and will involve serious capital, spending within the network will increase as merchants make that available. I'm just waiting for a company like Newegg to start accepting them which will propel Bitcoin's legitimacy, and the real game will begin.

This is just the beginning of something like likes of which the world has never seen, I myself am going all in.

What if you read this in a couple years when one BTC trades for $1000, $2000 or even more?
Sure it may not seem realistic right now but can you rule it out?

BINGO!!

Greed is a powerful thing. I doubt that there is only one entity going hard into ASICs, it will balance out.

Excuse me but that's BS. I buy BTC at all prices, as soon as I get my paycheck, and it's been months now. What's expensive? I guarantee you that when I was buying at 14, 25, 33 or 65 something in my stomach was telling me "what a pity, now is more expensive", just because I knew that just a few months earlier it was WAY cheaper.

But you know what? My brain and my analysis always told me: THIS IS CHEAP COINS

And $140 it's still very cheap coins.

Wake up: there are only 11MBTC in circulation, and there will be a maximum of 21MBTC.

BUY

Buying BTC at $130 is a huge gamble and unrealistic for a most people.  If I had the money to invest considerably in BTC at the current prices, I'd pony up for an existing ASIC.  But, as it stands, the mtgox price is down 2% already.

I think the takeaway for me is, I should have got into mining earlier and/or bought bitcoins at $10.  Just missed the boat.  Nobody to blame but myself.

Buy as main BTC as possible while waiting ASICs second gen to order as soon as its announced. It will be a gamble, but the reward will be much higher

^ This is the problem. 

I'm trying to get into mining, but roadblocks are pretty much everywhere.  ASIC's are being only shipped by one vendor, at the moment - Avalon - but in small numbers and those are all spoken for.  Most miners that have been mining a while can afford the $5k,$10k,$20k USD equivalent price (which keeps going up) for those machines due to the demand.  BFL has reasonably priced equipment, but hasn't really shipped anything and, in my opinion, isn't even close to shipping a real product that meets their advertised specs.  FPGA's and GPU's aren't cost effective to invest in at this point, due to the difficulty.  Besides, even if I wanted to buy FPGA's, hardly anyone is selling those anymore, either.

So really, there aren't options for new people interested in mining.  This "decentralized" currency is ending up in the hands of the few that actually have the few ASICs out.   Believe me, I'd love to "buy an ASIC rig and enjoy", but I can't reasonably do that.

Until more vendors are really shipping equipment or turning out more equipment than they have orders to fill, the ability for someone to break into mining now is slim to none.  That is simply the state of the scene right now.

When 1 Satoshi = 1$ I'd say this is close to top! At least that is my wishful thinking

Sooner or later a reasonably large correction is expected, but we're VERY FAR from the top. The game has just started.

The rate the price is jumping is starting to look ridiculous. 50% in one day, there is no way that will continue very long. Looks like we will see the top soon.

Right, the revenue of VISA should be compared with the amount miners get from the transaction fee. A better comparison would be to compare the block reward to the amount all the banks around the world spend each day on their computer systems and security systems. Any idea how to estimate that amount?

The mining reward encourages the existence of the network.  With out it your transactions do not get processed.  The fact that the reward is so large, is simply the fact that BTC exchange is so high.  It will equalize as the amount of money flowing in matches the amount going out.  The only reason it is so high is because so many people are buying BTC.  It has NO impact on the network how much the miners make.  I think you can easily get away with sending funds with out transactions or very low transaction fees attached.  The amount miners make from transactions is so small anyways.

The fed creates $268000 in debt per one mined bitcoin .

Do you think this amount is a reasonable amount to keep the system going?

324000 per day is the revenue what about costs, how many people are sharing it?
suppose 1000 people than 324$ per day revenue is not huge

That is exactly what happened.  The network is bootstrapped.  Satoshi was a genius.   While the block reward could be phased down faster then Satoshi's plan and bitcoin would still survive, Satoshi's original plan is the plan that will go forward (THANK YOU!).  

There can't be a accurate comparison until the transaction fees are the primary source of income for the miners. At the moment all income is skewed because of the mining reward being mostly about the Bitcoin release still. Work out how much is coming in per day/year from the transaction fee and then compare to VISA.

One thing to bear in mind perhaps is that in the long run the block reward goes to zero and miners only receive income from transaction fees. The block rewards they receive now can be seen as a means to bootstrap the entire system by providing incentive to develop the infrastructure.

Come on, FED print $40 Billion per month without using any electricity and many people even thank them for doing that

Ok... complain to the central authority that regulates bitcoin.

Or buy an ASIC rig and enjoy  

Believe me this is a lot more fairer than the fiat system, where only a small number of select institutions (banks) can 'mine' (i.e. lend the money into existence for interest). You can be the bank for just 75BTC (from Avalon).

Yep, this ^^^

People need to start thinking in terms of BTC not US$ ... it is messing with your minds.  

Basically, right now the Bitcoin network is producing 3600 btc per day to secure 10.9 million btc ... leave any other flexible, fake measures of value out of the equations and it makes sense.

Last year it was producing 7200 btc to secure up to 10 million btc.

In 4 years time it will be producing 1800 btc per day to secure 15 million btc.

It is an easily described function of time of how many btc the network will be producing to protect the currently existing stock of btc, you could plot it if you like. It has been factored in that the network will need more btc produced to support it earlier in the development phase and less later on. The miners just happen to be the protectors and primary beneficiaries of the coin production so it is easy to conflate those separate functions when trying to decide if the system is "fair".

And it is not like the miners are getting paid $324k per day. That would be like saying that a new tech company was paying a million dollars a month to their workers when they are really only paying reasonable salaries along with stock options. Miners are basically being paid stock options. The money traded on the exchanges makes up a fraction of the Bitcoin economy. If everyone were to try to sell their Bitcoins today, we would see nowhere close to $1 billion shelled out.

You are probably right. I just took an old number I found when the reward was 50 and halved it.

Last I checked we were down to about 11% inflation.

Essentially the $324000 going to the miners is how much we are inflating every day.

My thoughts:

1. Maybe the usd is worth less than we think it is.
2. As FreeMoney said, it is also a distribution method, and all we are really paying is about five cents per transaction (which I imagine will be revised downward soon).
3. Perhaps a good metric to determine if BTC is overvalued is price divided by total BTC exchanged per day.
4. Many people (like me) run a node without mining and without compensation, for the good of the network.
5. We are not in any sort of steady-state equilibrium, and temporary distortions are to be expected.

Bitcoin is currently in inflationary mode.

The current inflation rate of Bitcoin is around 17%, far beyond what the dollar's inflation is.

And yet it is attacked for its "deflation".

Keynesians should be loving Bitcoin right now.

If nobody new were buying bitcoins, you would be losing 17% of your wealth by keeping your funds in bitcoins.

But new people are buying...at a rate faster than inflation.

No, I do not think what the Federal Reserve is doing is reasonable. How is that relevant to the current discussion?


Good point. But the profits from mining and the revenue for miners are not quite the same thing. If the price remains the same, but 10x the people start mining, then mining would not be profitable but we would still be paying the same $324000 per day to uphold the network (I guess you could also add in the losses of the miners as more money going into upholding the network?).

"Lesser of two evils" argument? Boo. Bitcoin should stand on its own merits, and be defending logically, not emotionally. If there's something wrong with it, fix it or move to something else.

It's a distribution method too. If you think it is more pay than the effort is worth go get your own piece of that free money.

The Federal Reserve is currently pumping $1 billion into the Federal Reserve Note per day. Is this a reasonable amount?

There is a lot of evidence in any system that most of the wealth is concentrated in a small group of individuals. From what I've seen in a couple studies of the block chain, about 80% of the mined bitcoins are concentrated in 20% of the addresses, 80% of those are then in the top 20% of the 20%, etc. By my estimation, if there were 1 million people involved in bitcoin, the majority would control less than 1 BTC or owe BTC.

Early adopters benefited because they took the largest risk, and there is no way to create "equality" in owning bitcoins without forcibly taking bitcoins from one person and giving them to another. And even if that did happen, some people will always be better at accumulating coins than others, and the same discrepancy in BTC savings would reappear over time.

My apologies, I'm sick today and grumpy about it  Wasn't really addressed at you either...

One interesting quantity to look at regarding sustainability of this reward could be the miner reward to exchange volume ratio.  Here it is:


If we say it's exchange volume that sustains the block reward, then this graph suggests we're safe (w.r.t. inflationary downward pressure).  Safer than we've ever been, actually.  But the volume could be fleeting, so who knows.

Edit: cleaned up the graph

Mmmm you should really read more about what the argentinean government practices!!!

Seriously, stopping people from second guessing other people's earnings is part of what bitcoin is all about.

Who are you to start deciding they "getting too much"? God? You sound like one of the commies at the Fed that wants to shut us down.

And for your information, genius, ALL of coins get produced by mining, so that means the miners receive ALL of the initial capitalization and this is obvious from the paper which maybe you ought to read some more so you understand it. So, if BTC goes up to $1000 and 10 million coins get mined after that, guess how much the miners get? $10 billion dollars, duh (plus the additional transaction fees).

wtf?

Yep, snaps like a rubber band in slow motion. Eventually everything returns to normal until someone stretches the rubber band again with a new technology.

Also keep in mind that the network difficulty tends to be directly correlated to the exchange rate.  Right now the few ASIC owners are making an incredible profit while everyone else's mining proceeds are staying somewhat consistent.  Of course the exchange rate changes faster than the network difficulty, but my point is that over time mining will eventually stabilize to be moderately profitable as it's always been.  The value of the mined coins may increase significantly but that in turn will lead to more miners and a resulting higher difficulty.

The inflation schedule is not debatable, and the exchange rate is not controllable, but if the amount given to miners is not sustainable then the price will trend downward (or upward if the amount is to low) until it reaches a point that is sustainable. The point of the discussion is to try to figure out what amount is sustainable.


1 million/day would only be 3x where we are now. At the rate we are going the past few weeks we could hit that in the next month.

1 Million/day is a dream came true 

Don't know if troll or just not very bright.

You should read up on how and why bitcoin security works. The whole mining game is zero-sum. Apart from a select lucky few, they are spending pretty much as much on electricity and hardware as they are earning.

If you think they are getting too much money for it, why don't you try it yourself and see how it works out for you.

It's obviously way more than enough to prevent double spends.  But the inflation schedule is not debatable, and the exchange rate is not controllable, so go be windbags about something else.

because you're both some brainwashed neoliberal ****

I didn't see a single thing wrong with what he said.

This has nothing to do with the transaction fee. This is about the 25 btc block reward. The transaction fees are added on top of that.

Care to explain?  Other than "create a relay free transactions policy"? (btw, free transactions are relayed all the time; transactions with a fee just have priority)

Miners provide a service to the network in exchange for a reward.  They would not provide this service at the current level (i.e., hashrate) without the reward.

If Federal Reserves Ben Shalom can do billions per day Bitcoin can do millions per day

Litecoin is $16,000 per day 

If litecoin can do $16,000 / day, bitcoin can do $1M / day, no problem!

well how much more does their revenue have to rise until folks have enough of it ?

The money earned through mining should be reinvested in mining hardware to ensure the stability of the network (to keep it decentralized).

what utter bull, mitty

The value of the coins created by miners is the value which people place upon the value of bitcoins.  People who think miners receive too much don't buy coins, reducing the demand and therefore reducing the value of mined coins.

As for most of the wealth concentrated amongst relative few individuals; I think that's an inevitable artifact of a free market and not really related to governments or fiat money or anything like that.

Relatively few people have the skills or are willing to take the high risk (e.g., investors) required to become extremely wealthy, so there are relatively few extremely wealthy people. (There are definitely exceptions, like inheritance or theft & theft-like activity such as scams, fraud, etc. but I'd think those cases are more exception than rule)

Back to mining; there's a huge risk required to make a profit by mining.  Some can argue that mining is a high risk yet low yield investment.  Mining hardware is not cheap, buying ASIC preorders is both expensive and risky, and there's no guarantee of bitcoin's value making ROI calculations into both speculation and science.  Mining profitably is a skill and those who do it well are paid accordingly as with any other venture.

that is a huge rip-off !

they are far too greedy !



STOP IT !

encourage "bitcoin free transaction relay policy"

Just to give us something to compare to, I looked up the financial statement of Visa:

If I am reading it right, in 2012 they had expenses of 2.47 billion dollars, revenue of 10.42 billion dollars, leaving 7.95 billion dollars profits.

http://www.marketwatch.com/investing/stock/v/financials

The 118 million per year to miners seems like a lot for a network so much smaller than Visa? I would be surprised if bitcoin was 1% as big as the Visa network, anybody know a good way to measure it?

It would be ok if I had a bigger slice of the pie!   
zif


The only problem I see is that a small number of people are ending up with a majority of the wealth...just as we have in fiat.

I like your point about the mining reward funding ASIC development.

The thing about ASICs is they have a higher efficiency than GPUs. So they will be able to continue mining even when the GPUs are no longer profitable to run. This means that the overall power use of the network could go down while the security of the network continues to rise. Good for bitcoin, good for the environment.

One way to look at it: the price goes up as more people save money using bitcoins. As they save more money, the cost to keep that money safe goes up.

Yep, but even "Bad Guys" have enemies/competitors that will counter-attack by supporting the network.

It doesn't matter if it is "reasonable" or not it can't be changed.  It is what it is.  Today the amount of economic activity on the network likely doesn't warrant that level of security (like buying a $5K safe to protect $1K in gold) but the move to ASICS is essential.

"Bad guys" will always have access to ASICs, one can't simply pretend away that threat.  Today if someone wanted to attack Bitcoin they wouldn't build a GPU farm they would fab some chips and build a smaller easier to manage ASIC farm.  It wouldn't matter if BFL and Avalon didn't exist an attacker would STILL go that route because it is the most economical.

The high reward paid to miners indirectly funds the R&D necessary to make the move the transition to ASICs.  Hopefully mining will be a large enough "pie" that we will see 4 to 6 well capitalized ASIC suppliers.  2013 is going to be an interesting year.  If the network has moved to ASICs by the end of the year it permanently removes that "cheat card" vulnerability.  Sure an attacker can still use ASICs to attack Bitcoin (but they always could) however they wouldn't be able to gain a massive economic advantage (i.e. $2M in ASICS 51% attacking $20M in GPUs).

Nope. SELL SELL SELL!

The miners are currently being paid an equivalent of about $324000 per day through the block reward. (about 90 USD per BTC, 25 BTC per block, 144 blocks per day)

Do you think this amount is a reasonable amount to keep the network going?

Edit: Changed title due to increased price.