If your power costs are zero (which means you are stealing power)
Solar power?
Topic: ASIC: Bitcoin's Long term insurance (Read 1608 times)
If your power costs are zero (which means you are stealing power)
Solar power?
I am sure in the beginning ASICS will have a positive impact on bitcoin it will secure the network etc., but in the long term it will be very difficult for small miners to be profitable.
The whole mining business will be more professional and in the worst case in the hand of a few players that can afford huge data/mining centers.
Though you cannot stop progress and I am happy how far we already came !
The ASIC consolidation is the reason for the price drop. I am not anti-asic though, I realize you can not undo this once it has started. ASIC consolidation would not have been such a large problem had BFL shipped all of the orders by now, but since they have not there are now one or two large ASIC players that basically mine and sell (cash in).The whole mining business will be more professional and in the worst case in the hand of a few players that can afford huge data/mining centers.
Though you cannot stop progress and I am happy how far we already came !
Individual miners with one or two rigs usually mine and hold or mine and spend but do not cash in. These miners are more likely to support the BTC economy then a large player.
Lovely thread. I was really thinking about this. ASIC's will shape the btc ecosystem in a way, that it will make really hard to disrupt the network. you couldn't be more precise "Bitcoin's Long term insurance". Nail it. 
If the mining reward plus transaction fees doesn't exceed the cost of operating an ASIC, I am quite certain those boxes will be unplugged.
To assume anything else is to claim that the majority of miners are irrational.
In such a scenario, is it more rational to unplug your ASICs and keep them in your basement, or to sell them to any takers and try to recoup your capital outlay?To assume anything else is to claim that the majority of miners are irrational.
In the latter case, OP's argument prevails, because the market value of an unprofitable device would be low, and the people who would buy it in such a situation are ones who would mine no matter what the exchange rate might be - whether because they have ideological ("irrational") reasons for doing so, or because they have an insignificant marginal cost to mine (e.g. people who don't need to pay for their electrons by the kilowatt-hour).
The point is that if you have hardware with no purpose other than mining, the market will eventually put it into the hands of a person who's willing to use it for that purpose - or, in other words, that in the long run all ASIC miners are online and mining.
+1:
Let me add: transaction fees can be lowered and the cost of energy is dependent A LOT on the energy source and location.
If your power costs are zero (which means you are stealing power) or very low (e.g. you are located in Iceland at 3 cents per kW) then you can probably mine undefinitely.
Quote
Why can't smaller miners buy ASICs too?
Economies of scale...
Of course small miners can buy ASICs too, they will just face several disadvantages in the future, imo.
I am sure in the beginning ASICS will have a positive impact on bitcoin it will secure the network etc., but in the long term it will be very difficult for small miners to be profitable.
The whole mining business will be more professional and in the worst case in the hand of a few players that can afford huge data/mining centers.
Though you cannot stop progress and I am happy how far we already came !
The whole mining business will be more professional and in the worst case in the hand of a few players that can afford huge data/mining centers.
Though you cannot stop progress and I am happy how far we already came !
Why can't smaller miners buy ASICs too?
If the mining reward plus transaction fees doesn't exceed the cost of operating an ASIC, I am quite certain those boxes will be unplugged.
To assume anything else is to claim that the majority of miners are irrational.
In such a scenario, is it more rational to unplug your ASICs and keep them in your basement, or to sell them to any takers and try to recoup your capital outlay?To assume anything else is to claim that the majority of miners are irrational.
In the latter case, OP's argument prevails, because the market value of an unprofitable device would be low, and the people who would buy it in such a situation are ones who would mine no matter what the exchange rate might be - whether because they have ideological ("irrational") reasons for doing so, or because they have an insignificant marginal cost to mine (e.g. people who don't need to pay for their electrons by the kilowatt-hour).
The point is that if you have hardware with no purpose other than mining, the market will eventually put it into the hands of a person who's willing to use it for that purpose - or, in other words, that in the long run all ASIC miners are online and mining.
Unlike 2011 when people gradually turned off their GPU's, time time around an enormous number of ASIC's are shipping to an even more enormous Bitcoin user base. Be it 5gh japepeno's, USB Blockeruptors, DIY ASIC boards, etc... the fact is that bitcoin will have a massive install base via it's ASIC users. Even if Massive farms were to shut down, they would most likely sell their machines on ebay to smaller miners who don't count their electricity costs and are hoping for a long term return on their fraction of a mined coin.
ASIC's are the best thing to happen to bitcoin. At this point it doesn't really matter how low the price goes, ASIC's are a bitcoin only device, and people aren't going to not mine with them. Because of this, miners will continue to feel invested in Bitcoin and continue to be willing to trade with bitcoin.
ASIC's are the best thing to happen to bitcoin. At this point it doesn't really matter how low the price goes, ASIC's are a bitcoin only device, and people aren't going to not mine with them. Because of this, miners will continue to feel invested in Bitcoin and continue to be willing to trade with bitcoin.
It's like its all going according to plan..
I am sure in the beginning ASICS will have a positive impact on bitcoin it will secure the network etc., but in the long term it will be very difficult for small miners to be profitable.
The whole mining business will be more professional and in the worst case in the hand of a few players that can afford huge data/mining centers.
Though you cannot stop progress and I am happy how far we already came !
The whole mining business will be more professional and in the worst case in the hand of a few players that can afford huge data/mining centers.
Though you cannot stop progress and I am happy how far we already came !
+1
This however doesn't mind that the correct bitcoin price is 100USD+
This however doesn't mind that the correct bitcoin price is 100USD+
Unlike 2011 when people gradually turned off their GPU's, time time around an enormous number of ASIC's are shipping to an even more enormous Bitcoin user base. Be it 5gh japepeno's, USB Blockeruptors, DIY ASIC boards, etc... the fact is that bitcoin will have a massive install base via it's ASIC users. Even if Massive farms were to shut down, they would most likely sell their machines on ebay to smaller miners who don't count their electricity costs and are hoping for a long term return on their fraction of a mined coin.
ASIC's are the best thing to happen to bitcoin. At this point it doesn't really matter how low the price goes, ASIC's are a bitcoin only device, and people aren't going to not mine with them. Because of this, miners will continue to feel invested in Bitcoin and continue to be willing to trade with bitcoin.
ASIC's are the best thing to happen to bitcoin. At this point it doesn't really matter how low the price goes, ASIC's are a bitcoin only device, and people aren't going to not mine with them. Because of this, miners will continue to feel invested in Bitcoin and continue to be willing to trade with bitcoin.
Jump to: