Topic: Mining Namecoins is now 2x more profitable than Bitcoins - page 7. (Read 55320 times)

bitcoiner hating on namecoin ... could there be anybody sadder?

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And then there's the "i'll reserve this good .bit domain, if you want it, make me an offer" that I completely frown upon, as it represents the 'hoarding' and speculation that the whole NMC project is supposed to avoid.

just how many .bit domains are actually in use? any of them successful?

There are more variables to consider: for example, the last NMC block on namebit is going for 28 hours now, and has had a drop of about 85% of miners that hopped away.

it's explained on the "merged mining" wiki page

http://dot-bit.org/Merged_Mining#Will_NMC_mined_prior_to_block_24k_become_invalid.3F

answer: "No, not at all. The old blocks are checked based on the old rules. Thus you don't need to worry."

I somewhat agree with this. Because namecoins are identical in nature as a currency there is a good chance that some of the incoming funds into bitcoin will filter into namecoin eventually if not really quickly.

Trust me, the developers would be shooting themselves in the foot if the coins before block 24000 were incompatible with the network after block 24000 given that the majority of their holdings originated prior to block 24000. This would will the trust of the entire network and cause an death spiral in the network.'

So yeah I think we're pretty confident they will be compatible.

So are you absolutely sure that it would be possible for old coins to be added to the new patched block chain?

Actually supply will double and that is why price will most probably drop by 50%.

don't worry, "old coins" will work just like "new coins", the client will use "old rules" for blocks < 24000 and new rules for blocks >= 24000. it's transparent to users.

I have a straightforward question: If I buy 1000 now and wait for the merge to happen then how would I be able to sell them when they would belong to the old block chain and any potential buyers will be using the new block chain. So is transfer of NMC possible between the old (current) chain and the new (patched) chain?

One other thing to note is that the cost of a domain is not the only factor to consider when valuing namecoins. The purchase of domains is purely a function of the network and really may have no bearing currently on the price that NMC is traded at. The value that it has is purely determined (at the moment) by those who buy or sell them and those who mine them.

Value is determined by people, not by the object.

The only real difference between namecoins and bitcoins is that bitcoins have had lots of money pushed into the market and bitcoins had a chance to mature in development and through the internet community awareness.

Aside from the development (maturing factor) and the money put into each, there is little difference aside from that namecoins do have a functionality that bitcoins don't.

You forgot that in order to mine them it will take quite a bit of time once difficulty goes up. So yeah they will be cheap but the average user might not have the ability to mine them at a low cost. They of course could buy them. So yeah there is a likelihood that the prices could be depressed. But somehow I think there will be demand for them in that they are just like bitcoins only difference is that the market has not been inflated with incoming money just yet. We'll see...

This analysis is flawed, as Namecoin is already a general purpose currency.

That would make a difference then. Well played sir.

This isn't good for NMC value - if you need next to none of them, there will be no demand. I can't imagine that there are millions of people waiting to register .bit domains. Unless NMC becomes a competing currency to BTC, I really think this isn't a good move on the devs part. The lack of demand is already evidenced by the BTC/NMC exchange rate. This will just worsen the situation.

Let me also add that once merged mining takes place the process of domain cost decrease will accelerate even more. It could be closer to 3 or 4 months when you see a domain going for 0.01 NMC. But then again I am just speculating.

The rate at which we have been generating blocks since namecoins inception of April 18th, 2011 has been approximately 8 blocks per hour on average. So this is just another sign that 0.01 NMC domains are not far away.

Currently we are at block 18242 and a domain costs 11.08 NMC currently. Now the following link states that at block 24,000 and on the cost of a domain will decrease by 4 times the current rate.

http://dot-bit.org/forum/viewtopic.php?f=2&t=151&start=10

So if we generate an average of 6 blocks per hour 24 hours a day for 180 days we get:

6 * 24 * 180 = 25920 blocks

Now let's subtract the remaining blocks until 24,000 from now:

24000 - 18242 = 5758 blocks

Now subtract that from the 25920 blocks to get the total blocks that will be at a 4 times decrease in NMC to buy a domain:

25920 - 5758 = 20162 blocks

Now since we are moving at a rate of 4 times faster after block 24,000 it is accurate to say that using the domain cost calculator at http://www.namecoin.us/tools.php the actual "block" we will be at will be:

20162 * 4 + 24000 = 104,648

So if we just used the average 6 blocks per hour over the next 6 months (180 days) the cost of a domain will be less than 0.01 NMC in 180days based on the calculator and using block 104648 as the "block" value we are going to be at.

Maybe 5 months was more accurate given that a price of 0.01 NMC occurs around 90k to 100k blocks.

So my math is that since it takes 11.08 NMC currently to buy a domain and in less than 6 months a domain will cost 0.01 NMC it is safe to assume that the price of NMC to buy a domain has decrease 1108 times.

Originally your math would have been correct but since the new updates to NMC network at block 24,000 will likely take place the prices for domains will go close to 0 NMC very quickly.

I don't know where you're getting your numbers from. The cost goes down by 50% every 8192 blocks. Once merged mining happens, it'll take at most 4 difficulty updates to bring difficulty to parity with bitcoin. That's just over 10,000 blocks. After that, cost goes down by 50% every 2 months. So in ~2 months merged mining will become a reality, then difficulty will shoot up in a matter of days to adjust to the new processing power. At this point we're about 16,000 blocks from now. That's 2 halvings of cost, so cost is 1/4 of what it is now. Then every 2 months we'll get another 50% decrease. So that's 1/16th of current cost to register a domain in 6 months. Hardly 1/1000th.

The analysis was biased, but it was intended to be.  You present the short side of the argument.  Namecoins become a free by product of something that already has value.  Since they are produced for free, Namecoins have no correlated value and the price should drop to whatever their intended demand supports for them, possibly zero if people stop caring about them.

So really, the difference between the two positions is just an interpretation of what Namecoin is.  Outside of a handful of commands added to the software, Namecoins are essentially Bitcoins.  They have the same real world costs to mine at the moment.  The same would be true of any new coin added to the market.  Its the history and intent of the two coins which drives the bias, both of which the NMC/BTC exchange doesn't care about.

In support of the long argument:

If you are mining Bitcoins and you now receive 1 NMC for every 1 BTC you mine, would you give away the NMC for free since they cost you nothing to produce?  

I suspect not.  You'd probably want whatever the market would give you.  So the sellers valuation for NMC comes from the cost of production, the psychology of having worked to create them, and a multiplier value provided by participants in the exchange.  In other words, its valued the same way as BTC adjusted for some amount of historical bias.