Topic: Current attitudes to mining (Read 1223 times)

Thank you, from everyone !

I now just mine to be a part of the community... Nothing else!

Mining is very important, the higher difficulty, the more secure Bitcoin = Bitcoin has more value.

Its true I would mine more with lower difficulty, but I preffer higher and higher difficulty - this will move Bitcoin to new stage where it has more value I believe

i mine for long term, not looking to make a living off mining then selling. holding on to btc long term may be ..(i have no words for this expression)
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although say you buy 10 BTC for a miner that will deliver in 3 months by then BTC may have doubled in price so its almost like you paid 50% more for your miner than if you would have waited.


although im just a small PPC miner at the moment still waiting on my small 7gh from BFL :/ waiting so long for my paid for equipment is ( ... ) feel bad for people who spent  A LOT MORE BTC

I invested some money into mining, and about a month ago I decided it was time to pull out of the investment.  While I made some decent money mining, most of my money came buying and selling mining equipment.  It got to the point where in order to make a decent profit worth putting in effort for, I was going to have to sink in all of my profits from the previous 6 months plus a bit more, and to me, it just wasn't worth the extra risk at that point so I pulled out.  I still sell some computer equipment related to btc mining, but it's all done in fiat now.

When the USB sticks come down in price a bit more, I'll buy back a rainbow of them for my desk to support the network as a decoration

The secret is diversification. Simply buy a smaller unit or contract from every possible offer, this way the one or two devices/contracts that can actually work at this very moment will cover the scam costs for the others and may bring profit in the future. Using an escrow or asking for a refund returns costs but drops possible profits.

Every day I hear this for the last 2 years. And yet every day the majority of the miners are doing well. Magic!

What happens when price drops dramatically or stagnates? Simple, you will notice the difficulty drops as well. This is a clear price/difficulty dependence.

Here are some highlighted samples:


The "lag" you see between the two events is caused by miner inertia. It takes time to realize that the profit has changed and miners take notice about 30-40 days later. Or they decide to take action after a long month of unprofitable mining (for them). Stopping mining is a good short term decision but a bad long-term decision. Even mining on a CPU can bring you profit if you sell after 4 years.

The correlation between the price and difficulty is the Mining Factor, seen in green below. Mining Factor of 0.4 is normal for GPU mining, and once it goes above, the network expands rapidly, once it goes below, it starts to contract.

ASICs are 30-50 times more efficient than GPUs, as such the new normal Mining Factor will soon become 0.01. On the chart, that value is the currently rendered bottom line. Once the ratio between price and difficulty reaches that threshold, only 100% ASIC miners will be able to profit on mining. Since the trend is currently perfectly logarithmic (straight line on log chart), this will happen in about 4 months.

The halving of the block reward is just a single step on a logarithmic chart, is does not appear to be of high impact. Do you want miners to come and mine? Yes. Their profit depends on how much they invest and how much they wait to sell. Will they cut a bit of your profit? Yes. Considering the network is the equivalent of 2 295 506 high end GPUs, how much are a few more added?

and ... insider informations or contacts, like brother in butterfly to send you new devices 6months before official dispatch

You are both right. Difficulty adjustments always lag the actual network hash rate. If the hash rate increases, blocks will be found more quickly until the difficulty adjusts enough to match the new hash rate. The rate at which blocks are found depends on the ratio of the hash rate to the difficulty, not just one or the other.


This is a myth. Price does not depend on difficulty. Instead, difficulty depends on price. Looking at your graph, I don't see a lot of correlation, except that both price and difficulty are rising, ...

... and that bump in June 2011. Notice that the difficulty lags the price at that bump. This lag indicates that difficulty depends on price and not the other way around.

Currently, the difficulty is going through the roof while the price has been very flat, contradicting "price grows as difficulty grows". At some point in the next year, the energy costs of mining will put a ceiling on the difficulty that will follow the price, just as it did in June 2011.


Things have changed in the last 3 years. The contribution of the block reward to the bitcoin money supply is getting smaller. The amount of the block reward is less than 5% of the total volume on the currency exchanges. Miners no longer have a significant effect on the price of bitcoin.

No.

Ever heard of difficulty? It adjusts so that coins are found at the same rate again. Prices will go up because everyone pays more and expects to sell for more. Miners are not stupid (exceptions may apply).

Yes it does. Old miners get more profit on old coins. If the price change as difficulty changes, the same profit remains. You don't read my posts, why do you reply to them? Why do you contradict yourself?

So? Price grows as difficulty grows: http://blockchained.com/chart_large_log.png . Every month, there is more than 100 USD, it's not the same money every time (in fiat conversion). Maybe it is the same 100 USD, now given to two children. Suddenly each one can get the same products and services for 50 USD that they got for 100 USD, so it's the same value.

I would love to agree with you but this is absolutely false. I am involved with Bitcoin for 3 years now, the price of Bitcoin is largely controlled by miners. You will come to the same conclusion once you gather some experience yourself. I have been GPU mining all this time and it has ALWAYS been profitable, even when everyone says next week it will stop being unprofitable. Go figure...

In conclusion: YOU are the scurge of the earth, the greed of the lake, the ignorance of the miner bunch. Do some research then stop posting obviously wrong information to confuse new users.

No.
Bitcoins will always be mined every 10 min on average. Actually, if more people are mining, the blocks will be found earlier: more coins will be on the market. Prices will go down.

The fact, is that difficulty is adjusted quickly, so it does really matter. But still, old miners get less profit.


That's like if someone gives 100 usd per month to his child. If the next month he has a new child, then he will give 50 usd to each child, and if every month there is a new child, their revenue will decrease and decrease.


What makes the bitcoin prices up and down are demand and supply on exchanges, which has nothing to do with miners.

Those are the stupid miners. If there are more miners and the difficulty rises, the coins will sink more value and will request a price raise.

All existing mined coins will then jump up in value, having new miners join the network is more profitable than just mining and selling immediately.

But not everyone thinks long term and greed blinds them. "More for me now, screw the rest!"

Without profits, there would be no miners.

The paradox with mining is that all current miners want to discourage anyone else from becoming a miner. (Cos it pushes up the difficulty and reduces their returns)

But

Without miners, there is will no bitcoin.

I'm not even sure whether that will actually give you a ROI within a reasonable time frame. Your going to need a lot of hashing power and get it cheaply in order to profit considering the current difficulty and the fact that it is skyrocketing. You'd probably be better off simply investing when BTC is low and selling off when it is high or shoving it in a bank and getting interest.

Yep... If you want return on investment your going to have to put 5-10 grand on the table...

Currently, and in my opinion, I think its too late to start mining!

The difficulty is increasing exponentially and the cost of even 1 TH/S is wa too much for the average newbie!

Anyways goodluck!

Here I have two my thoughts to your collection:

- Slogan: Preorder today and start hashing next year.
- I preorder today so I dont miss the boat

Mining is not for newbies.

Successful and profitable mining takes experience, capital, and a solid understanding of the economics of mining.

On the other hand if you don't mind spending a lot more time and money to mine bitcoins than it would cost to just buy them outright, then go for it!

That's a good one!