Theoretically given infinite time, the mining hardware is always the better purchase because it makes new Bitcoin. Though that might intuitively make sense, it's wrong if either of the following conditions are true (basically the same condition, but whatever):
1) difficulty increases and/or block rewards decrease faster than you can mine new coin.
2) difficulty goes high enough that the amount mined won't add up to your initial investment in your lifetime.
The difference between the two conditions is only whether it's "never" or "not in your lifetime." So basically the same condition even if the math shakes out a little differently.
That's why the block eruptors make such great gifts and less-great investments. If you give one away, the recipient gets a free fountain of money for the rest of their life. What fun! Even if it will be fractions of a Satoshi per year in not too long, it is free! Yay! But when you buy them with your own money it's sort of a different dynamic.
Topic: did ASIC ruin bitcoin ? - page 3. (Read 9019 times)
Why do people keep thinking this?
The miner could have bought BTC directly with the capital investment (or maybe the initial investment was BTC anyway) so the future value of bitcoin doesn't matter. The investment is good if it makes more BTC than the capital would have bought, it's bad if it doesn't - the price of BTC does not factor into this.
Huh? Say a mining machine costs $5,000 and is expected to average about one Bitcoin per day over the next 3 months. If Bitcoins are $1 each, that's a lousy deal. If Bitcoins are $100 each, that's a pretty good deal. The cost of mining hardware is based on dollars because mining companies have to pay employees and suppliers that way.The miner could have bought BTC directly with the capital investment (or maybe the initial investment was BTC anyway) so the future value of bitcoin doesn't matter. The investment is good if it makes more BTC than the capital would have bought, it's bad if it doesn't - the price of BTC does not factor into this.
A note about the original question. ASICs didn't ruin bitcoin. ASICs put bitcoin to an "industrial" level. What these boxes ruined is the "small town" feeling 
For some people, maybe. With my one FPGA and two block eruptors it still feels like a pretty small town around here.
But yeah, I think you're exactly right about what other people think it ruined.
You don't own bitcoin. Like the above user said, bitcoin was meant for use to have a free economy. asics didn't ruin anything. I would mine alt coin. Crypto gave a new meaning to competing currencies
A note about the original question. ASICs didn't ruin bitcoin. ASICs put bitcoin to an "industrial" level. What these boxes ruined is the "small town" feeling
Why do people keep thinking this?
The miner could have bought BTC directly with the capital investment (or maybe the initial investment was BTC anyway) so the future value of bitcoin doesn't matter. The investment is good if it makes more BTC than the capital would have bought, it's bad if it doesn't - the price of BTC does not factor into this.
Huh? Say a mining machine costs $5,000 and is expected to average about one Bitcoin per day over the next 3 months. If Bitcoins are $1 each, that's a lousy deal. If Bitcoins are $100 each, that's a pretty good deal. The cost of mining hardware is based on dollars because mining companies have to pay employees and suppliers that way. The miner could have bought BTC directly with the capital investment (or maybe the initial investment was BTC anyway) so the future value of bitcoin doesn't matter. The investment is good if it makes more BTC than the capital would have bought, it's bad if it doesn't - the price of BTC does not factor into this.
Why do people keep thinking this?
The miner could have bought BTC directly with the capital investment (or maybe the initial investment was BTC anyway) so the future value of bitcoin doesn't matter. The investment is good if it makes more BTC than the capital would have bought, it's bad if it doesn't - the price of BTC does not factor into this.
The miner could have bought BTC directly with the capital investment (or maybe the initial investment was BTC anyway) so the future value of bitcoin doesn't matter. The investment is good if it makes more BTC than the capital would have bought, it's bad if it doesn't - the price of BTC does not factor into this.
I'm inclined to agree. I mine as an "investment" of sorts, but not the kind that pays short-term dividends on a balance sheet. The payoff is not a percentage-measurable profit but knowing that I've done something to support the operation of a currency I believe will make the world a better place for me to live in.
It's kind of cool that I get to spend the dividends too, and I wouldn't keep buying hardware if I were seeing nothing come back to me at all. And I know enough other people are doing it so I don't need to, but that's just sort of how I roll.
A miner makes an investment in equipment and electricity, etc., and in return they get Bitcoins. The amount of their investment is then compared to the value of the their production. *But*, the potential future value of their production should be taken into account to.
Why do people keep thinking this?
The miner could have bought BTC directly with the capital investment (or maybe the initial investment was BTC anyway) so the future value of bitcoin doesn't matter. The investment is good if it makes more BTC than the capital would have bought, it's bad if it doesn't - the price of BTC does not factor into this.
A miner makes an investment in equipment and electricity, etc., and in return they get Bitcoins. The amount of their investment is then compared to the value of the their production. *But*, the potential future value of their production should be taken into account too.
This assumes having a block time of 10 minutes is really important
Having a 'final' and known amount of BTC in circulation and a _relatively_ constant block creation rate is very very important - it's what makes BTC more-attractive traditional Fiat's And you may end up with a more flawed mechanism if try to set future difficulty based on expected growth
Historical growth not future growth where you end up setting the difficulty far to high and end up with one really, really long period of a too high difficulty.
You will get 1 or more periods of that when lots of hobby-miners (assuming they're the ones responsible for the electric bills) eventually realise they're losing large amounts of money running their miners ... 
This is ASIC wave 1, and the hype is multi-faceted and pervasive. Those who feel they missed the boat: GPU miners felt the same way about CPU mining, as did the FPGA miners over GPU mining, as did ASIC miners about FPGA era. Hell, even Avalon batch 2 customers felt the same about Avalon batch 1.
well i never mined bitcoins unfortunately, so yeah i wish i could have back then just for fun. too bad i got in late. i think its a little discouraging to n00bs when people who arent already in the game have few options. but not everyone can make money.
Will this affect deflation? I wonder if USD Fiat price and block reward are inversely correlated? (so long as demand exceeds supply)
If hashing power rises rapidly within one adjustment period (2016 blocks ~14 days) then the time between blocks can temporarily be shorter however it is that shorter interval which causes the difficulty to rise. Yes for a short time the time between blocks can be <10 minutes (and in a falling hashpower environment it can be>10 minutes) however the network readjusts difficulty every 2016 blocks
Between difficulty adjustment, overall, it's _never_ been an average of 10 minutes.The current adjustment calculation is flawed in several ways.
One of which is not retargetting the difficulty based on the historical average time between blocks, to bring it back to an overall average of 10 mins.
This is why http://thegenesisblock.com/at-this-rate-the-last-new-btc-will-be-issued-55-years-ahead-of-schedule/
This assumes having a block time of 10 minutes is really important. And you may end up with a more flawed mechanism if try to set future difficulty based on expected growth, where you end up setting the difficulty far to high and end up with one really, really long period of a too high difficulty.
If hashing power rises rapidly within one adjustment period (2016 blocks ~14 days) then the time between blocks can temporarily be shorter however it is that shorter interval which causes the difficulty to rise. Yes for a short time the time between blocks can be <10 minutes (and in a falling hashpower environment it can be>10 minutes) however the network readjusts difficulty every 2016 blocks
Between difficulty adjustment, overall, it's _never_ been an average of 10 minutes.The current adjustment calculation is flawed in several ways.
One of which is not retargetting the difficulty based on the historical average time between blocks, to bring it back to an overall average of 10 mins.
This is why http://thegenesisblock.com/at-this-rate-the-last-new-btc-will-be-issued-55-years-ahead-of-schedule/
This and bitcoin was designed for anything that comes its way from now until 21 million coins. ASIC and other competition is what bitcoin is all about!!
a plus is that confirmations will be in seconds now with miners running on asics
the whole point of the difficulty adjustments is to ensure that new blocks (confirmations) are generated at a rate of one every 10 minutes, no more, no less, regardless of total network hash rate.If hashing power rises rapidly within one adjustment period (2016 blocks ~14 days) then the time between blocks can temporarily be shorter however it is that shorter interval which causes the difficulty to rise. Yes for a short time the time between blocks can be <10 minutes (and in a falling hashpower environment it can be>10 minutes) however the network readjusts difficulty every 2016 blocks. Hashpower can't keep growing at 20%+ per adjustment forever and when it slows the time between blocks will normalize at ~10 minutes regardless of if we have 1 MH/s or 1,000,0000 PH/s.
a plus is that confirmations will be in seconds now with miners running on asics
the whole point of the difficulty adjustments is to ensure that new blocks (confirmations) are generated at a rate of one every 10 minutes, no more, no less, regardless of total network hash rate.yup. two of them
http://thegenesisblock.com/bitcoin-block-time-halved-to-five-minutes-amid-exponential-network-growth/
http://thegenesisblock.com/at-this-rate-the-last-new-btc-will-be-issued-55-years-ahead-of-schedule/
a plus is that confirmations will be in seconds now with miners running on asics
the whole point of the difficulty adjustments is to ensure that new blocks (confirmations) are generated at a rate of one every 10 minutes, no more, no less, regardless of total network hash rate.
bitcoin might die because of ASIC and be replaced by bitcoin 2.0 or some new P2P digital currency. the first of anything never lasts it either dies and goes away for good or it evolves and gets replaced by something better. either way i think the future of bitcoin as it works today looks questionable. the good ol days of GPU mining are over. hopefully the next round they figure out a way to deal with people controlling the market and having the difficulty shit on ROI.
that´s not exactly true with technologies like the internet. the internet protocol for example which is still used today was developed in 1974. there have been several attempts by companies like microsoft, ibm, apple to start new protocols, but they did not succeed.
bitcoin is a protocol. if it lasts as long as the internet protocol there is nothing to worry about.
http://en.wikipedia.org/wiki/Internet_Protocol
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