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Topic: Mining at a loss: Insurmountable Problem in the near future or am I mistaken? - page 3. (Read 6274 times)

hero member
Activity: 896
Merit: 1000
Seal Cub Clubbing Club
As we've seen it only takes someone with about 4% of the supply of BTC to completely crash the price to $0.01, that is the kind of downward pressure compounded with the lack of liquidity that can be brought to bear. 


When did we see this?

No idea.  I'm guessing some time in 2009?
full member
Activity: 196
Merit: 100
Niemivh,

You seem to be assuming that all miners will immediately stop mining and abandon bitcoins if their efforts momentarily become cost prohibitive. Just because you did does not mean some won't hold out until one or more variables change, causing profitability to once again increase.

In other words (just as others have tried to point out), miners who can't or won't mine due to its lack of profitability make it more profitable for those who continue, either by choice or necessity.

Actually I didn't assume that.  But I am pointing out a trend that I believe we are already witnessing, the slow decline in price from after the period of great volatility that apparently has no end in sight.  I'm wondering if this could break into a full scale 'run for the exit'.

Please read my post again if you care to debate what I'm actually trying to convey rather than what you've quote mined.
sr. member
Activity: 448
Merit: 250
As we've seen it only takes someone with about 4% of the supply of BTC to completely crash the price to $0.01, that is the kind of downward pressure compounded with the lack of liquidity that can be brought to bear. 


When did we see this?
full member
Activity: 196
Merit: 100
niemivh, the simple solution to this "insurmountable problem" is to mine your coins and wait til they're valuable enough to cover your HW cost and THEN sell them.

Aren't addressing the large buy-in cost that exists now, will increase past the point of Moore's law soon, and also that this was not the case for the past 2 years.
full member
Activity: 196
Merit: 100
niemivh you are right, mining will not be profitable in the future.  Bitcoin is the only commodity in history that has a GUARANTEED REDUCTION in rewards by 50% every few years until returns drop to ZERO.  Then you are depending on transaction fees which have no guarantees that they will be significant.

What are you talking about?  Bitcoin does not have a guaranteed reduction in rewards.  MINING bitcoins does.  The two are completely different.



And you think the price is going to be going up or even staying the same if miners sell their gains and equipment?  How you figure?
full member
Activity: 196
Merit: 100


so what would you have said to the miners in the beginning when they were paying for electricity -

and bitcoins were trading for 8 cents - with no buyers?



if they had listened to you -

bitcoins wouldn't be roughly $14 dollars now...



you're not factoring in faith.

early adopters had faith in bitcoin's future -

you don't.



so you did the right thing by leaving.

more for the believers.

Faith is nice, I guess, but if the fundamentals of Bitcoin were based on a faulty foundation it wouldn't have mattered.  That was then, this is now.

Nobody seems to be addressing the fundamental concern I'm raising here.  Not surprising, that happens all the time here.
edd
donator
Activity: 1414
Merit: 1002
Niemivh,

You seem to be assuming that all miners will immediately stop mining and abandon bitcoins if their efforts momentarily become cost prohibitive. Just because you did does not mean some won't hold out until one or more variables change, causing profitability to once again increase.

In other words (just as others have tried to point out), miners who can't or won't mine due to its lack of profitability make it more profitable for those who continue.
hero member
Activity: 896
Merit: 1000
Seal Cub Clubbing Club
niemivh, the simple solution to this "insurmountable problem" is to mine your coins and wait til they're valuable enough to cover your HW cost and THEN sell them.
Vod
legendary
Activity: 3668
Merit: 3010
Licking my boob since 1970
niemivh you are right, mining will not be profitable in the future.  Bitcoin is the only commodity in history that has a GUARANTEED REDUCTION in rewards by 50% every few years until returns drop to ZERO.  Then you are depending on transaction fees which have no guarantees that they will be significant.

What are you talking about?  Bitcoin does not have a guaranteed reduction in rewards.  MINING bitcoins does.  The two are completely different.

newbie
Activity: 56
Merit: 0


so what would you have said to the miners in the beginning when they were paying for electricity -

and bitcoins were trading for 8 cents - with no buyers?



if they had listened to you -

bitcoins wouldn't be roughly $14 dollars now...



you're not factoring in faith.

early adopters had faith in bitcoin's future -

you don't.



so you did the right thing by leaving.

more for the believers.
member
Activity: 76
Merit: 10
Depends on what you mean by soon.  We have months of marginally profitable mining for people who already own their rigs.  And for people who do not pay for power mining should be a money maker for a long time.

Let's not dismiss the fact that mining was never really profitable until recently.  Early adopters basically had to eat the cost of their H/W and electricity.  If we return to an "unprofitable" state once again, that's fine with me.

I didn't forget that.  I mentioned it and brought up that that wasn't the only problem.

I think the echo chamber is on overdrive in here.  The Bitcoiners are starting to believe their own propaganda.

The question is, with the entry costs now being much higher to even mine at a potential for gain, how many people will be flocking to buying the next and greatest video cards to mine at a loss for the foreseeable future?  A lot easier to mine with a old computer rather than a $2000 rig, the potential returns are much higher if you didn't have to buy any expensive equipment in the first place.





So? Whats the big deal if we lose a few Terahashes? Network security is well above what it needs to be for the current market cap and exchange rate. And merged mining will increase mining profitability in just a few months by allowing people to mine on multiple block chains at once with the same hashing power.
member
Activity: 70
Merit: 10
Will add .02 BTC later lol
full member
Activity: 196
Merit: 100
Depends on what you mean by soon.  We have months of marginally profitable mining for people who already own their rigs.  And for people who do not pay for power mining should be a money maker for a long time.

Let's not dismiss the fact that mining was never really profitable until recently.  Early adopters basically had to eat the cost of their H/W and electricity.  If we return to an "unprofitable" state once again, that's fine with me.

I didn't forget that.  I mentioned it and brought up that that wasn't the only problem.

I think the echo chamber is on overdrive in here.  The Bitcoiners are starting to believe their own propaganda.

The question is, with the entry costs now being much higher to even mine at a potential for gain, how many people will be flocking to buying the next and greatest video cards to mine at a loss for the foreseeable future?  A lot easier to mine with a old computer rather than a $2000 rig, the potential returns are much higher if you didn't have to buy any expensive equipment in the first place.

full member
Activity: 196
Merit: 100
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.

Apparently you didn't understand anything of what I said.

I'm saying that with the best hardware on the market mining will still be unprofitable soon unless:

1) Better hardware is soon released
2) The price goes up

Neither of these seem probable, hence why I'm reporting it here.  Posts like yours don't make me feel any better about the long-term outlook of Bitcoins.


Depends on what you mean by soon.  We have months of marginally profitable mining for people who already own their rigs.  And for people who do not pay for power mining should be a money maker for a long time.

Idk, probably over the next months to a year.  Something like that.  I know that mining with my 6970 is nearly already unprofitable.  Also depends how rapidly the technology advances but the difficulty of Bitcoin greatly outpaces Moore's Law, and that is the problem that I'm talking about.
hero member
Activity: 896
Merit: 1000
Seal Cub Clubbing Club
Depends on what you mean by soon.  We have months of marginally profitable mining for people who already own their rigs.  And for people who do not pay for power mining should be a money maker for a long time.

Let's not dismiss the fact that mining was never really profitable until recently.  Early adopters basically had to eat the cost of their H/W and electricity.  If we return to an "unprofitable" state once again, that's fine with me.
full member
Activity: 196
Merit: 100
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.

Apparently you didn't understand anything of what I said.

I'm saying that with the best hardware on the market mining will still be unprofitable soon unless:

1) Better hardware is soon released
2) The price goes up

Neither of these seem probable, hence why I'm reporting it here.  Posts like yours don't make me feel any better about the long-term outlook of Bitcoins.



Mining becomes unprofitable, miners leave, difficulty goes down, mining is profitable again. Thats how it works.

Funny that you ignored the part of my post that covered that.  Mining difficulty doesn't go down beyond a certain point in each difficulty of the block chain.  I'm talking about a near future when even a lower amount of miners doesn't pan out to the level of difficulty and capital requirement required to start mining bitcoins.
legendary
Activity: 1386
Merit: 1004
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.

Apparently you didn't understand anything of what I said.

I'm saying that with the best hardware on the market mining will still be unprofitable soon unless:

1) Better hardware is soon released
2) The price goes up

Neither of these seem probable, hence why I'm reporting it here.  Posts like yours don't make me feel any better about the long-term outlook of Bitcoins.


Depends on what you mean by soon.  We have months of marginally profitable mining for people who already own their rigs.  And for people who do not pay for power mining should be a money maker for a long time.
full member
Activity: 196
Merit: 100
Bitcoins weak link is the other side of the deal. We need to find a way to make the object a bitcoin is exchanged for non-reversible or more certain.


bitcoin is just like cash. Fraud with cash happens all day every day. It's not the cash that's the problem. it's the other side of the deal.
i do not understand what you mean.

bitcoin can't be counter-feit.

What i mean is the currency side of the transaction has no problems. It's on the other side.

If I trade bitcoins for widgets, it's the delivery of the widgets where the fraud occurs not the bitcoin side.
Same with cash (unless counterfeit).
Fraud with bitcoin is occurring with the delivery of whatever is traded for the bitcoin whether it be a product or electronic credits.
The ability to defraud is very asymmetric.
Bitcoins value will skyrocket is this issue is solved.

There are all good reasons for BTC to exist and grow, it's more of the element of it hitting a wall with existing purchasable hardware that is the problem that I'm trying to point out.
full member
Activity: 196
Merit: 100
1) Better hardware is soon released
2) The price goes up
3) Difficulty goes down.
member
Activity: 76
Merit: 10
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.

Apparently you didn't understand anything of what I said.

I'm saying that with the best hardware on the market mining will still be unprofitable soon unless:

1) Better hardware is soon released
2) The price goes up

Neither of these seem probable, hence why I'm reporting it here.  Posts like yours don't make me feel any better about the long-term outlook of Bitcoins.



Mining becomes unprofitable, miners leave, difficulty goes down, mining is profitable again. Thats how it works.
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