Topic: Reward Half without ASICs = Bad for miners? (Read 3978 times)

Oh yes July and $6.25 BTC. I remember. I was pretty excited when it hit $6.25. Guess I've been spoiled recently. I guess the price will continue to rise as it gains uses. But it does seem like out side of that BTC is priced closely to what the market figured it was worth in July vs power and equipment costs.

I have about 2GH/s worth of GPUs but only pay $.07 in electric so Im still profitable. Also I have been mining on coinlab almost since they started so I have a few weeks worth of points saved up.

Im one of the ones who wanted ASICs to be delayed, however I am also within the first 25 orders for a bASIC.

Ah, yes, the $ value of each block as cut in half, that is true. Where they used to be worth ~$625, but now they're only worth ~$310. Where before, $90,000 worth of coins were mined per day, now it's only $45,000.

It's not screwy at all, it's simply how it is. A=B, B=C, A=C. You are free to look at it solely as $/GH, but equivalence does not end there. I perhaps should have said block instead of coin, and then it would have been instantly clear, but it's obvious enough that I felt laziness was fine.

You mine a block, you get half the coins, the value of individual coinage is still the same, but the value of the block is now half; you can look at this as people getting the original number of coins at half the price. Equivalence for the sake of comparison. It's not backwards, it's the most sensible way to compare today to yesterday, in this context, as evidenced by being able to simply look at a chart on bitcoincharts and draw info from it to reach a conclusion. The price of coins today is fully analogous to the time when BTC was $6.25 and the network of the time is more or less what that was priced at. We won't return there due to sunk-costs, but we won't stay where we are now, QED.

It only breaks down if you want to keep in scope the entirety of bitcoin, which we don't.

Dafuq? No, the value of a mined coin is still $12.50, just like it was before the reward half. 1 coin is 1 coins is 1 coin. The $ value earned per GH/s has cut in half, which is what you might be thinking about. You're looking at this all backwards, and it's totally screwy.

Reward halving does not affect the price, excepting a slight upward nudge overtime, but it will affect mining difficulty. The value of a generated coin is now ~$6.25 when it was $12.50 before. The last time it was @ $6 USD was Jul '12 (was actually closer to $7 then), and the hashrate was roughly 12THash/sec (half of now). You won't necessarily see a drop to half, but you will definitely see a drop.

Good point, if the reward halving was already priced in then neither the price nor the difficulty should change.

You're basing that off organofcorti thread that says price drives difficulty?

The increase in price drove the network to what it is today. The price will keep it that way, regardless of the difficulty, or the reward half. As a consequence, the reward half should not affect the price (which is really hasn't).

it's the winter season, so i'm not stopping since the extra heat can be a plus. if it were summer, i'd definately reconsider. difficulty is on the up, if it reaches 5 million without BTC breaking $15 i intend to stop, that's my threshold

agree but u forgot those shady botnets lol

I imagine the only people that are terribly happy are free power types or people sitting on a massive farm of FPGAs

If ASICs never were to appear, difficulty would readjust for mining to be on the fringe of profitability, as it always does. It's just that difficulty drops take longer than rises by their nature, since it needs to take longer for the usual 2106 blocks for bitcoin to detect that difficulty needs to drop.

Thanks for the reply Steven, yes 51% is still unlikely as you stated.
What if people give up on BTC all together if they can't afford to mine at all?
Then the community shrinks, fewer investors/evangelists to grow BTC to the next level.
This is what I am concerned about, I guess ASICs coming soon should be helpful.

At the current levels of exchange rate and difficulty, yes, there is currently too much GPU hashing capacity to be supported by 3,600 BTC at $12.50 per BTC.


Was 24 Thash/s necessary to protect from 51% attack?  If bitcoin only had 12 Thash/s would it have been p0wned by an attacker by now?

Unlikely. 

It will consolidate for a bit here. 

If ASICs weren't "real soon now", miners would be buying up FPGAs to replace their power-hungry GPUs.  But with ASICs around the corner, nobody is buying an FPGA right now.

While GPUs started out being people using their existing gaming GPU, it quickly become a commercial endeavor.  Since a small-time miner would hit limits for power and heat, only those who could expand were the larger GPU farms where the cost of new electrical and heating could be justified by it adding such large amounts of hashes.   The efficiencies favored a smaller number of larger players.   

Because FPGAs were more efficient, the electrical capacity wasn't reached as easily.   This helped to distribute the hashing capacity to a wider group again.

ASICs will likely cause distribution to spread even further.

So essentially, the "energy hog" property of GPUs actually worked against decentralization.  If the hashing capacity drops, it is coming nearly entirely from GPUs so the mix of GPUs and FPGAs will show GPU dropping and FPGAs growing (on a relative basis), but both are done when ASICs ship from multiple manufacturers.

Without ASICs will mining shrink/centralize ?
Will this damage the bitcoin community by shrinking it?

Heh, nope.


If the GPUs are providing needed heat for the winter, maybe springtime.  Or earlier, especially with the noise.

Just like nobody messes with CPU mining anymore, once 100+ Thash of new capacity comes online, those GPUs won't be doing any good even with free electricity.

Now there could be continued life with CoinLab's HPC effort ... especially for those with a low cost of electricity.

That's exactly the kind of person that I expected. Are you one of those?

Also, how long do you think GPU miners with free electric will keep mining, even AFTER the ASICs hit?

Here's who is happy right now.

Has investment in GPU rigs, pays about half or less of the average eletric rate (average is $0.15 per kWh so pays $.075 or less), is not likely to be among the first ones to receive an ASIC.

The longer this drags on at current BTC/USD and difficulty levels, the longer those GPUs will remain profitable.

As soon as ASICs ship, even those remaining mining on GPUs will find that the GPUs are no longer useful.

I've heard people say they're glad that ASICs are delayed, as it gives them a few extra weeks of GPU mining. Now that we've hit the Reward Halving, has this changed anyone's opinions? GPU mining can still be profitable, but just barely, and it depends on your electric costs. FPGAs are profitable, but it takes years to pay them back now, so buying more FPGAs isn't really an option. The only future option even feasible is ASICs, but they're delayed.

So this is more of a question to those people who WANTED the ASICs to be delayed to extract more from their GPU rigs: Do you still feel the same way?

Note: this is not a bashing (or praising) ground for one ASIC manufacturer or another. We're all well aware of all the ASIC manufacturer's (both claimed and expected) time-tables, but this has to do with GPU miners and the reward half. Thanks.