Topic: did ASIC ruin bitcoin ? - page 2. (Read 8995 times)

Your welcome, glad we could help and heat our houses in the winter with the wasted heat.

I think i only used my heater 3 or so times over last winter.

Excuse me if I don't read all 6 pages of this thread, but did anyone handle the "in a decade or two, BTC price increases so much + advanced mining hardware becomes so expensive that it basically gets taken over by corporations" scenario? I can think of  a few objections, just thought I'd put it out there if it's not already been handled.

Hardware may be one of the only things that CAN ruin bitcoin.  A 51% attack launched by a hostile force could do that.
ASICs help protect against that.  Running them in defense against such an attack is noble in the face of unprofitability.
(Thank you, miners)

Admittedly the resale value of the hardware can be a hedge against losses, but I don't think that makes mining hardware a good investment compared to just buying Bitcoin. See, the price of Bitcoin factors heavily into buying Bitcoin as well.

Say you have $137 to invest right now. You can buy 1.14 Bitcoin today. Or you can buy three block eruptors. Never mind the setup and buying USB hubs and whatnot, lets assume you can plug them in and start them going.  At the current rate of difficulty, those three eruptors will have mined 0.140 Bitcoin for you in two weeks. Sounds great, right? Because that's a little more than eight weeks to ROI.

Except that that's about when the difficulty goes up again. Over the next two weeks you'll get another 0.110 BTC. The difficulty will increase again, and in the following two weeks you'll get 0.090. At the end of eight weeks you will have mined a total of 0.410 BTC. At the end of twelve weeks your total revenue will be 0.509. At the end of six months you will have gotten 0.65 BTC total. Even if at that point the difficulty never increases again, ROI would still be another year out.

Saying that you hope the coins will increase in value is all well and good. Lets say that in six months the USD-to-Bitcoin exchange rate goes up by a factor of ten. OK, then at the end of the six months you'll have 0.65 BTC which will be worth almost $780. That makes a pretty good return on your original $137, I know. Except that if you bought Bitcoin instead of mining hardware, you'd have had 1.14 BTC instead of 0.65 BTC, and $1370 is a lot more than $780.

It doesn't matter whether the price goes up, down, or stays the same. If difficulty keeps increasing, you'll get a lot more Bitcoin by buying it with USD than by buying mining hardware with USD.

And here's the important part: at the end of that six months, the three block eruptors will be bringing in less than one-tenth the bitcoin per day that they did when they started. Do you think anyone will be willing to pay more than about one-tenth what you paid for them at that point? Even selling the hardware after six months of mining would only bring you up to about 0.75 BTC on your 1.14 BTC investment.

Did CPUs ruin bitcoin?

Now take your answer and apply it to ASIC.

The price of bitcoin factors in heavily to buying equipment. You have to hope that the coins you mine are going to get an increase in value. Mining is just a more secure form of investing as you at least have the hardware if you can sell it on if the value of the coins mined don't flourish as you hope. Obviously if you don't have the facilities to run the hardware then yeah, buying coins directly is a better option.

Cops and lawyers? Taken for a ride? Huh?!?

Yeah I did, but I ran a small operation, bought 2 GPUs and stuck then in an already high powered machine, ran it for a few months and made double my money but that does involve knowing when to sell out your coins and not being too greedy.

Block Erupters aren't very economical pieces of kits, you'd need a good number to keep up with the difficulty rate

that may be the problem with this wave is that a lot of people will get disillusioned that they got taken for a ride by the earlier adopters and quit or start calling cops and lawyers.

The first bitcoin miners did not expect return.

Sigh...no it proliferated bitcoin. Now there are other alts around and they exist for complainers to mine about.  I think there are more inventive ways that those with fiat could use the bitcoin and also the proliferation of alts - http://vimeo.com/71559751

Once more people ...both rich and poor....have these alts it will be a good incentive to push merchants into accepting them.  I think that bitcoin being around this long and having this much network hashing power available allows it to be resistant to being attacked.  Unlike a computer,  an asic machine doesnt use an OS and is not subject (yet) to the risk of botnets or malware designed to wreak havok.  I don't know why the blackhats haven't yet created FUDwallets or spinoffs of coins that are designed to destroy cpus or hardware as they would then put off potential entrants to the community and would also sabatoge those whom wish to encroach on their precious pie of network hashrate. 

 

Crazy right...I hope that doesn't happen but I imagine it would...UNLESS we decide to work together to build upon a platform of cryptocurrency economies.  Like for instance why couldn't a bunch of comicbook shops ban together and be willing to accept bitcoin litecoin and galaxycoin exclusively?  Wouldn't that just shoot the price of galaxycoin UP?  Why couldn't fastfood shops accept fastcoin?  I think that currencies could be here to stay if there were more adoptions for them and/or useful purposes. 

The space race is fucking over.  Hype has fallen and yes BTC more then likely needs a fix.  2  years of speculation lead to a ton of improvements on GPU and FPGA Mineing.  For some it was an education.  Myself included.  Now that we really don't have much to tweak on we are bored and restless LOL.

It's an arms race now. No real fun in that.  No real education aside from perhaps understanding ASIC Tech. I pray daily somebody will find a homebrew method to allowing one to expand on this hardware they have.  But thay isn't going to happen.  I for one am going to continue keeping one or two gpu rigs around.  So much can be done aside from ET Search and PW Cracking.

For me it's not about money.  This hosted mineing shit with 4737474GigaNanoUberBits of hash powet per person.  Thats more money then brains

What would have ruined Bitcoin is that an attacker used existing technology (ASIC) to 51% the network. ASIC actually made the network more secure. When the price was lower it was easier to mine bitcoins but interest was lower. Now the price is higher and so is the difficulty since everyone is sharing the same pie and interest increased.

yes I believe its ruin

You can't ruin Bitcoin with hardware.  Bitcoin can be ruined if it's utility is threatened but that's not with hardware.  Even if someone had a magic box with 60% of hashing power right now they still wouldn't find it profitable in real life to double spend and crash the rate vs simply to mine and sell the coins at a much higher rate.  That's exactly what happened with Avalon.  They probably at one point had more hashpower than the entire network combined if not a few times that, but who could they double spend to make it even remotely worthwhile?  Nobody.  Will that remain true as we approach both a much larger acceptance therefore a much easier double spend profitability and a lower block reward combined with lots of old cheap asics with lots of hashpower but simply electrically inefficient.  Only time will tell.

I'm with you on the rest of it, but this confused me. How do ASICs contribute to increased trading volume?

Depends on who you ask.  For GPU miners, yes.  For the receivers of the first Avalon batch, no.  For those waiting for their deliveries, depends on your queue.  Then there are long term investors and day traders.  Day traders may like the ever increasing volume to play with.  Long term investors may hate the volitility. Merchants dealing in bitcoin may also like the increase in volume and ultimately the publicity it brings.  In the overall sense I don't think ASICs ruined Bitcoin itself, just certain aspects relating to it, for certain people.  Bitcoin will continue to chug along, and ASICs will eventually be archived as just another part of bitcoin's history when something better comes along.

It's actually slightly worse than that ecause if you buy 50 BTC, you can sell them any time you want. If you mine 50 BTC, you can't sell them until you mine them.

True, but the arguments rarely work out quite that way. You generally don't really know how many BTC you're going to get because future difficulty is hard to predict. But I absolutely agree that if you're trying to decide whether to mine, you should first compare buying mining hardware to buying BTC.

Or difficulty rises to a level that your electricity costs of running the miner exceed the BTC you make from it.

Stupidity is like Nuclear waste....
Better to stay FAR way, even better to not get any on you.