Topic: All mining might be illegal/parasitic soon (Read 6503 times)

And if you are a scientist who run the models in that lab as your daily routine? Or if you are the lab supervisor?   

I'm not mining, I'm just testing the vulnerability of the SHA algorithm, it's for a paper i'm writing.

And as a student if you got caught misappropriating those resources for something like mining, you'd be expelled (most likely).  Happened to several people using computer resources for their own purposes, Bitcoin mining would be even worse, because you're not folding proteins, you're making money for yourself.

USC (and others) have specific policies against it:
http://web-app.usc.edu/scampus/1100-behavior-violating-university-standards-and-appropriate-sanctions/

"11.35
Theft (or attempted theft) of property or of services within the university community; possession of stolen property regardless of origin; or misappropriation of university resources."

There seems to be the misconception that faster hardware could generate more coins. But this is only true in so far as you might be able to get a bigger share of the fixed daily production of 50 * 6 * 24 coins that are generated on average. Lets say I would have a super-computer which could generate 20% of the current bitcoin network procossing power in Hashes per second.. but the cost for operating it would be much higher than what the expected amount of solved blocks/bitcoins would cost at an exchange. Then I would not power up my super node but start buying BTCs from a cheaper producer.

Currently the electricity costs for mining a BTC are lower than the price payed at exchanges like Mt. Gox. But already today the profit margin is different for systems with different efficiency rates and also depending on the price for electricify which a 'legal' miner has to pay. We will very likely see in the next couple of month if not faster, that the profit margin for current GPU hardware will go towards zero. And the important point here is that it is not possible to buy a faster GPU that is less energy-efficient to increase the profit margin - if you cannot improve the efficiency of your system or find a 'provider' electric power who is cheaper .. you would loose money continuing to mine with your inefficient (sub-threshold) system.

Therefore: Speed alone (hashrate) does not help you. A 'legal' miner can only make profit (and e.g. generate the money for his/her rig) when he is using hardware that has a kW/h per GHash efficiency above a certain threshold.

Viewed differently: Imagine the daily 'production' of ~7200 coins would be worth 100.000 USD at Mt. Gox and that price would stay constant. At the same time the number of miners would increase until a saturation plateau is reached. If all miners would daily convert their coins (not acting as traders/speculator) an ever increasing fraction of the 100.000 USD would go to the suppliers of electric energy...

Hey, it's the economics subforum.

People pull stuff out of their ass.

Wht does it matter if the network is run by Botnets, well, it means all the remaining bit coins will be held by very few people, then we will be back in central bank territory.
The original poster is correct, when mining begins costing serious energy, parasitic mining will be viewed as stealing energy, then how will people mine.
Either by parasitic illegal mining, botnets etc, or by collaboration, I don't think many individuals will be able or even willing to mine.
The parasitic miners will end up owning significant shares of BTCs, yet the original intent of Bitcoin was that BTCs should be widely distributed, not into the hands of a few.
The webpage mining facilities are a way that people can collaboratively agree to mine legally, and also ensure BTCs don't end up in the hands of a few.

 

Oh, and the "average person" can't mine Bitcoins either.  They do not have the technical knowledge to get a mining rig up and running.

As far as I know the price for mining a single troy ounce currently is >500 USD. If it would be possible for everybody to dig a hole in their garden to mine an ounce with half an hour work it would be worth near nothing. It is pretty sure that you as an individual cannot effectively mine gold for less money then it is sold.

Could you please provide a reference for the 400 USD per Kg statement?

I read about the LargeCoin ASICs rumors yesterday for the first time. Before that I only heard about experiments with FGPA chips. Indeed if it worked - ASICS would become the primary (most cost efficient and thereby most effective) way of mining - mostly because they are more energy efficient compared to GPUs in Watts per GigaHash. Therefore I would not agree that 'energy prices are irrelevant'. Rule of thumb should be: More efficient machines will crowd out less efficient ones. As soon as a miner figures out that running costs are higher than the market price for him he has to stop mining immediately - even when he believes that the price for bitcoins might rise dramatically - buying at an exchange from somebody who is able to mine at lower costs would be more effective. If holding/investing in BTCs is not an option for such a sub-threshold-miner he has to invest in more efficient hardware or simply will go away...

Very efficient specialized hardware (compared off the shefs products available to the masses) in the hands of a single entity could have a significant impact on the bitcoin ecosystem. If nobody can catch up this entity could reinvest all generated coins into hardware until it would possess >50% of the network's computational power. This would then allow to dictate transaction fees by not accepting blochs of other miners because eventually the longest blockchain would be generated by machines of that entity itself.

If there will still be competition between a high enough number (>oligopoly) energyefficiency will be their primary area of optimization.

Regarding my original post I agree that it might not be possible to run a ASICs super-computer with significant power consumptions hidden in the corner of a youth center. Parasitic mining would make senes only with the latest generation of minig hardware (a factor of up to 1/10 might be ok - but if others have 100 times more effective machines it will not be worth making a profit of 1% of the energy costs paid by your boss).

What is the relevance of changing the algorithm (effectively, an alternate blockchain) in the context of ASICs for mining the current blockchain ? Are you implying you can anticipate such a change and future-proof your device ? You do know what "ASIC" means do you ?

How wrote that doesn't have a clue. There are too many "experts" in this forum tossing out numbers and previsions. There are several problems with the implementation just described and only a newbie will even think about it.

What about if Bitcoins for some reason needs to change encryption algorithm?

int returnRandomNumber() {
return 4 //created by rolling a dice, totally random
}

I love that I'm simultaneously accused of making predictions that are both random and obvious
Yes the LargeCoin thing was announced, no they don't have anything to show for other than a Google spreadsheet. Not even a website. There's some controversy if the company that produces the first ASIC would sell it, it seems so damn profitable to seize the opportunity and become the top miner. Regardless if LCs become available for sale, I expect a huge difficulty rise in about 3 months - but only if the price stays over $10.

The part about 100:1 over a GPU is based on my technical insights and my day job, I've detailed the numbers in another thread:


I'm obviously estimating the orders of magnitude, not exact numbers.

Please, stop writing random numbers.

That is a "risky" prediction given that some company has already announced they will have them in September-October. Although in this kind of projects, delays are the norm not the exception.

OP is not a troll, just wrong. Trolls seem to abound in 500+ posts category.

GPU miners have 100:1 gain over CPU, and ASICs have 100:1 over GPU. You need 10.000 CPUs to catch up to a single $50 ASIC, so it follows energy prices are not relevant, it's mostly best tech wins. Building a 100.000 or 1000.000 computer botnet is not free, and has a black market value higher than the equivalent ASIC mining. I predict ASICs will arrive in ~ 3 months if the price stays stable.

My plan is to set up mining computers as servers for companies for a discounted rate (yes they will pay me to sit the server there) I'll maintain them for this discounted rate included, and since the processor is sitting there doing nothing, the "server" will happily be serving files and what not.  Eventually, they will have bought the server for me and I'll just make the bitcoins by throwing either two or four powerful gpu's in there.  This will be legal as they will be signing a contract for my services and I'll be getting paid to mine rather then paying electricity to mine.  Get fucked everyone else?

I manage about £100,000 worth of IT equipment at work and did consider mining from there, unfortunately its pretty terrible for mining as it will all be CPU mining. I tried it a little as I was curious and I got about 10mhash/s on one of the systems.
Considering I have 4 of these in total I would get 40mhash for 100k worth of kit, it is sooo not worth risking it.
Now if I knew about this last year then I may have added the price of several ATI cards, but hindsight is a wonderful thing.
I am sure there would potentially be malware out there that would mine secretly on peoples machines if they got infected. It would be hugely noticeable though unless the malware limited to CPU mining and only to 1 core, then I guess you could keep it hidden.

Yet they exist. There are more and more simulation labs running models on GPU-s; there are  weather, aerodynamics, rock movement models. I know a lab with 64 5750s. If one gets his miner disguised as one of the models that are being run there, he can get easy access to 15%-20% of the power without real risk of being caught. That is around 3GH for free.

Don't you suppose the IT departments of countless companies are about to find out what's happening on port #8332 of their machines?
I would think that large companies, followed by mid-size and even small companies, will start blocking access to "api.bitcoin.cz", "deepbit.net" just like they block access to "facebook.com" and "myspace.com" today.

Universities -- same thing. They will start dealing with the leeching of electricity, etc. and of course the students are paying a ton anyhow -- I'm sure electricity is covered. But using more than 1 PC's worth will draw attention, and might be clamped down on.

As for the kids in mom's basement -- the moms and dads of the world are about to get a wake-up call when the 1st "Post-bitcoin-mining" electricity bill comes due. I know, bitcoin has been around longer than that, but a LOT of people discovered it in late May.

Matthew