Topic: Mining at a loss: Insurmountable Problem in the near future or am I mistaken? (Read 6274 times)

Why would the Dow crashing and the S&P tanking and Bank of America collapsing propel people into political activism?

Oh wait... you were talking about the US economy right?

Granted.  I'm out of here for this and other reasons.

Opposing viewpoints are not tolerated on a forum that pretends to promote 'freedom' and 'liberty'.  Only freedom and liberty to chant the dogma into an echo chamber of other ignorant drones who literally have never read any history book that didn't massage their already preconceived notions.

The incredulous nature of the average user here is starting to rub off on me, I'm off to greener pastures.

To those who will listen take it or leave it.

We'll see who is right.

Seeing as nobody is actually refuting my point, which is that Moore's Law and the difficulty of the block chain have an intersect point, past which the amount of people mining will radically decrease - unless: either BTC prices rise or 'traffic' increases on the network due to more actual economic activity.  That is the postulate I've presented and yet 90% of the people posting on this thread don't seem to realize that, even though it was in the original post.

Competition is not a tragedy of the commons. The guy in the other thread is full of shit in the way he uses the terms.

What would happen is that miners would close operations and less miners would share the fees, making mining profitable again. The problem really is not with the viability of mining, as long as people use Bitcoin some level of mining will be profitable. The argument is about the level of security that can be achieved, f.e. you could argue that if some miners close, the equilibrium point will not have enough miners to mantain a certain level of security against 50% attacts. This is the real question, not the bullshit about competition being a tragedy of the commons.

I think its a flawed reasoning because the value of bitcoins depend on its use. The more people using bitcoins the more demand will be and more value they will have (since the supply its a known factor). So the more people using bitcoins the higher its value and obviously the higher the incentive to try to attack the network. The same is true in resversal, the less people that uses bitcoins, the lower its value and obviously the lower the incentives to try to attack the network. But then at the same time, the more people using bitcoins, the bigger the amount of transactions fees (also of higher value) there will be, so the more miners there will be and the higher the security. As you see there is always an equilibrium between the incentives to attack the network and the incentives to mine and make the network more secure and the attacks harder and more expensive.

Also, lets speculate on what would happen if there is a 50% attack. You have to think that a 50% attack would be recognized very quickly because it can not be sustained in time, its a very expensive operation. You would have to buy hardware and pay electricity to double the Bitcoin network hashing speed, so you are 50% (or 51%) of the network. When the news spread, there would be panic and the value of bitcoin would go lower, a lot lower. Probably a lot of merchants would stop accepting bitcoins at least until the issue is resolved. Maybe even exchanges would freeze activity for a while, etc... So the attacker would be basically spending a lot of resources to steal something that would depreciate and would be harder to use becuase of his attack. I dont think anyone would get his/her "investment" back from a 50% attack. The only option for a profitable attack would be if you are able to cash out really quick after the attack, but it seems improbable given the amount of money you would need to cash out to make up for the huge initial investment. A 50% attack makes more sense from the point of view of a government or financial institution that wants to destroy Bitcoin credibility.

The main point is there is an equilibrium between the incentives to attack and the incentives to mine.

I will keep my mining rigs running no matter what.  I'll completely cover the electricity costs if needed (provided I have a job to pay) at full loss.

This...

mining shall not be profitable!

it should run at 0-cost and 0-profit.

just earning enough to keep your rig going.

when mining is profitable(the price goes up or the difficulty goes down), more miners will come and make mining unprofitable.
when mining is unprofitable(the price goes down or the difficulty goes up), miners will leave and make mining profitable.

its simple supply and demand.

stop crying about it.

Huh?
Any references to back this up?

You can immerse any computer component into a water tank - just make sure the water has been purified to remove the conductive minerals.

What I would like is something in the form factor of a heating element which could be threaded into a water tank.  A couple of high current wires, and tough cable with a female RJ45 is all I want to see.  Actually, throw in a serial port on the cable as well maybe.  The whole thing should operate at something north of 100 C and shut down automatically if it got much hotter than that.

Can you do it?

Don't worry guys, a new breed of hardware is on the way