Topic: On Bitcoin mining - page 2. (Read 2414 times)

And even when quantum computers are mining, and the difficulty is 1 billion, there will always be some poor noob mining away on his Pentium 4 in his mother's basement, hoping to strike it rich.

We're already seeing Quad FPGA chips on a single board for $1k and other designs with expandable daughterboards etc similarly priced for the number of chips and total hashing power. And they will have to compete with each other for customers thus lowering the price of FPGAs. Then we'll see some custom FGPA multicore processor maybe with 4, 8, or maybe 4096 FPGAs all in a single chip. And then maybe the first quantum computer that can be used to solve sha256 will get purposed for Bitcoin mining. And every increment of overall tech performance will push up the difficulty, and force people who want to keep being competitive at mining to upgrade their hardware, and the network will end up more secured as a result.

No, they would just stop mining and sell their rigs. This would in turn cause the difficulty to decrease, and the remaining miners make more money. Difficulty adjustment will always cause the cost of bitcoin mining to (on average) be equal to the value of the bitcoins mined.

There is no mining cartel. Anyone who wants to mine can do so.

Nobody's going to generate and hold bitcoins if the power bill increase is drastically more than the value of their bitcoins. They might be willing to mine at a slight loss for various reasons, but if the losses are substantial enough, they're just going to quit.

Not directly. It is good for Bitcoin, though whether Bitcoin solves economic problems is a whole 'nother story.

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Are you serious? The whole point of Bitcoin is that nobody can generate it out of thin air (since that would cause its value to drop to nothing), instead it requires substantial computer power to do so. The fact that people without substantial computer power cannot generate bitcoins is not a "threat", in fact it is the main source of its value. Think about it: why would a merchant accept Bitcoins if he could easily generate some on his computer?

There's no problem if FPGAs take over (in fact it's a good thing, because it reduces the energy requirements of securing the Bitcoin network), because there's a free market for FPGA hardware and software. Anyone who wants to mine with an FPGA can go out and buy one for a fair price. No problem.

The biggest threat to BTC as I see it is non-GPU miners.

For me, the main attraction of BTC was that I could mine it myself. I could literally "generate" money with my own computer.

And so could anyone else with a half decent computer. Thus it was easy for people to obtain bitcoins, and then spend them.

Once the FPGAs take over, squeezing out the GPU miners, the only effective way to obtain BTCs will be by buying them with cash, which is hard to convince people to do.

EDIT: What I'm getting at is that a huge attraction of bitcoin is the ability for just about anyone who want's to to mine it. Once you have to start paying cash to obtain them, they lose a lot of their convenience.

Of all the facets of Bitcoin, the one I've had the least experience with is mining. The fact that miners have an incentive to discourage other miners is not lost on me. I suppose I just took anecdotes as I heard them (I'm sure you've heard of so and so who would have been better off financially in the short term if they had just bought their BTC rather than mined it). Thing is, mining is the most distributed and fair way to get Bitcoins, the majority of which haven't been issued, into the hands of of the masses. There's a reason it's such a central part of Satoshi's introduction of Bitcoin into the world.

There are millions upon millions of people with video cards that would give them a fair shot at mining.

Now, let's imagine just one million 200MH/s gpus came online. That would be an additional 200 TH/s added to the network bringing the total to 212 TH/s. After the difficulty adjusted, each 200MH/s user would be awarded with 0.0068 BTC/day. At today's exchange rate($5), this is worth about $0.03. Do you think all those people would sell what is effectively $0.50-$1 worth of work for $0.03? I bet they would hold it until they could trade it for something just as valuable as what they put in.

If this is true - if people will value something for what they put into it rather than what someone else is willing to pay - the main challenge becomes convincing gamers to keep their GPUs on, generating Internet freedom currency while their games sleep.

What do you think? Is the mining cartel keeping Bitcoin down? Is it too big a leap of faith to think gamers might generate and hold their BTC? Should power bill increases be celebrated instead of feared?

While I'm at it...in the US there is a deeply held belief in consumer culture that many problems can be solved through purchase. Can economic problems be solved by purchasing mining hardware and electricity to run it?

-weex