I never said it would be easy but it just might work and it really would be in everyone's best interest. In real world commodities there's an original producer for every good we trade and that producer has to make a living too, so they represent a floor below which the price of that commodity can't typically drop. Even if we ignored the upper-bound idea of preventing bubbles from arising with our combined power we can at least prevent the bubbles from destroying the market when they burst by agreeing on a minimum acceptable price, based on difficulty.
Hell maybe "union" is just too strong a word, maybe just putting up a web site that does the math and calculates today's rate would be enough. If enough people start referencing it and using that value as their minimum acceptable price at least it'd put a floor on the market.
Topic: Miner's Union? - page 3. (Read 5787 times)
Start it up, make a website, a new forum make it private and lets work on a strategy. Might work, might not.
Please, form the union. It will be curious. But I hope you know you are going to fail.
Without government regulations you are going to have a very hard time manipulating the price and will end up failing.
Without government regulations you are going to have a very hard time manipulating the price and will end up failing.
good luck herding these cats.
I'd also like to add my personal suggestion: Historically the market seems to have had no problem supporting a price of difficulty/25,000 or so which right now would be $22.69/BTC. These bubbles are usually temporary but they have to be resisted by some kind of market pressure or eventually one of them will cause a downward trend so bad that it drives the price lower than what is sustainable for mining. Remember, miners aren't just "printing money" we're also building the block chain. No miners = no bitcoin. It's in all of our best interests that we keep this at least somewhat profitable for miners or else the whole thing could fall apart.
In light of the recent downtrend in the value of BTC I've got a proposal to help turn things around. These bubbles and their associated bursting are not our fault, my fellow miners. We want nothing more than to mine some bitcoins and sell them for a reasonable profit over our cost of equipment and operations. Most of the miners I've talked to are not the "get rich quick" speculator types. Sure we'd like to make some money but we're also in this thing for the long haul (at least I am). To this end I propose a sort of solution. I propose a union for the purpose of price-fixing in an attempt to stabilize the market value of bitcoin.
Every day something on the order of 7,200 BTC are generated by mining operations. If we were to assume that the vast majority of miners are acting in a for-profit manner and selling their generated coins this would account for 10 to 15 percent of the total volume of BTC traded on MtGox in a given day. While certainly not the majority this is a strong enough percentage that we should be able to wield some influence at least over the market.
I say we agree on a difficulty/price ratio that will allow us to make a reasonable income in return for our efforts and absolutely stick to it. In both directions. If speculators try to increase price too far beyond our agreed-upon limit, they will likely fail as at least 10% of the market will be selling at a lower rate. If the market attempts to dip below our rate, at least 10% of the market will be resisting the dip. This will hopefully produce the kind of stability we need in this sort of market. Price per BTC will suffer fewer fluctuations and will only rise or fall as a factor of difficulty which, of course, is a factor of the number of people mining which is a factor of adoption rate.
It might work, it might fail. We might have enough power to demand a fair price at market and we might not but I think we owe it to the community to at least try. Who's with me?
Edit: As it turns out my idea wasn't much like a union at all, more of an educational effort regarding the VALUE of bitcoins as compared to their PRICE. To that end, I've obtained http://bitcoinreference.com and set up a redirect for the old btcunion.com domain. You can all stop defining the term union for me or giving me your opinions on unionization, whether bitcoin miners constitute a "workforce" etc.
Every day something on the order of 7,200 BTC are generated by mining operations. If we were to assume that the vast majority of miners are acting in a for-profit manner and selling their generated coins this would account for 10 to 15 percent of the total volume of BTC traded on MtGox in a given day. While certainly not the majority this is a strong enough percentage that we should be able to wield some influence at least over the market.
I say we agree on a difficulty/price ratio that will allow us to make a reasonable income in return for our efforts and absolutely stick to it. In both directions. If speculators try to increase price too far beyond our agreed-upon limit, they will likely fail as at least 10% of the market will be selling at a lower rate. If the market attempts to dip below our rate, at least 10% of the market will be resisting the dip. This will hopefully produce the kind of stability we need in this sort of market. Price per BTC will suffer fewer fluctuations and will only rise or fall as a factor of difficulty which, of course, is a factor of the number of people mining which is a factor of adoption rate.
It might work, it might fail. We might have enough power to demand a fair price at market and we might not but I think we owe it to the community to at least try. Who's with me?
Edit: As it turns out my idea wasn't much like a union at all, more of an educational effort regarding the VALUE of bitcoins as compared to their PRICE. To that end, I've obtained http://bitcoinreference.com and set up a redirect for the old btcunion.com domain. You can all stop defining the term union for me or giving me your opinions on unionization, whether bitcoin miners constitute a "workforce" etc.
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