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Topic: Mining at a loss: Insurmountable Problem in the near future or am I mistaken? - page 4. (Read 6274 times)

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.
full member
Activity: 224
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.
sr. member
Activity: 252
Merit: 250
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.
hero member
Activity: 896
Merit: 1000
Seal Cub Clubbing Club
It was a different world when you could get any crap laptop and make 50 bitcoins a day or even a week for the potential gains were much higher for a much lower amount of 'capital investment' (ie, crap laptop that you weren't using anyway), but now with the introductory capital costs being so high with so little returns I don't see a way out of this, which is unfortunate.

I believe you're mistaken.  Mining is much more profitable now than it was back when you could mine 50 BTC per day on a crap laptop.
legendary
Activity: 1050
Merit: 1000
You are WRONG!
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.
full member
Activity: 224
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.
legendary
Activity: 2044
Merit: 1000
+1 Kokjo

As less robust miners drop out, the difficulty will go down, thus making it more profitable for those who remain.

The network will find an equilibrium, and it will be very much survival of the fittest (or most efficient).
legendary
Activity: 1050
Merit: 1000
You are WRONG!
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.
full member
Activity: 196
Merit: 100
The problem I see in the near future for Bitcoin is that the best hardware that presently exists will soon (months?) be inadequate for mining at existing price levels.  Meaning that buying a Radeon 6990 will not even net you back a worthwhile amount of money (or any) at existing price levels.  As there will therefore be added a tremendous amount of downward pressure on the market at the same time that only more demand for BTC will be able to counteract.

The other built in failsafe to this scenario is the 'transaction fees' that miners and clients can charge in order to process transactions.  Well this presumes a robust economy with people actually trading in goods and services and not what the actual Bitcoin economy looks like.  Look at the charts there is not much movement, and how much of that is even really exchange for goods and services?  Most the value that BTC has gained in USD over the past many months is of a purely speculative nature.

It was a different world when you could get any crap laptop and make 50 bitcoins a day or even a week for the potential gains were much higher for a much lower amount of 'capital investment' (ie, crap laptop that you weren't using anyway), but now with the introductory capital costs being so high with so little returns I don't see a way out of this, which is unfortunate.

I believe we'll have a large shedding of miners soon as the difficulty chews up all but those that are running the various levels of hardware.

Next we'll see another exodus when it hits a competitive level at the level of the highest existing hardware.

Then another one when people who are the enthusiasts (those who tweak every little setting for maximum efficiency) start bowing out.

This may already be happening.  And this combined downward pressure (assuming that the miners sell their BTC when they leave the system) will cause even the highest efficiency miners to question if they want to continue to mine at a loss.  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.  For example, if one of the primary founders has thought of this problem as I have and would rather try to 'cash out' than hold on and potentially see the project survive it might actually set this 'bomb' off.  There will be plateaus in this process as the difficulty goes down as people are exiting but the overall trend is the same.

I've already sold all my BTC at a loss and am not planning on buying back in, so I'm not hear to start a panic.  I haven't spent the last 2 months organizing meet-up groups for Bitcoin, spending hours a day on this forum and researching bitcoin and money theory and economics and talking to all manner of people about it to try and kill it.  You can take or leave my word on that, it doesn't matter to me.

However the only way I see out of this is:

1) Either to have the client for BTC radically improve so those non-techy can use it (Huh?)
2) Have another wave of users come in and buy BTC (not likely)
3) Develop a custom ASCI that does the hashing, it is unknown if this could even solve this problem for long (very unlikely)
4) Expand the use of BTC as an actual median of exchange as more movement will equate to fees which will better insure the integrity of the network (dependent on the client and other factors)

If there is some glaring thing I'm missing as part of this equation please let me know.

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