simple stupid comparison of bitcoin mining and just buying

noobtrader

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Quote from: Asrael999 on October 14, 2014, 11:35:09 AM

Quote from: criptix on October 14, 2014, 11:27:58 AM

Quote from: Asrael999 on October 14, 2014, 11:24:06 AM

Quote from: criptix on October 14, 2014, 11:21:22 AM

Mining doesnt only give you bitcoins - with mining you are also supporting the bitcoin network without bitcoin would not work.

Imagine nobody mining and just try to buy... wouldnt even work in the first place

by adding a miner to a pool you don't improve the network - you only do that if you create a new node.

Please explain how i do not support the bitcoin network if i actively mine bitcoin? Thanks

its a bit more complicated than just mining bitcoin -

do you support the network if by mining at a pool you tip the pool over 50%?

The system needs more than just miners proving the transaction it also needs nodes - these broadcast the information around the system, the more nodes - that is full function nodes with bitcoin core running and a complete blockchain - (not something most asics worry about) the more secure the system. Running a full node is not incentivised, so the numbers are falling.
Pools reduce the number of nodes, but unless you mine in a pool you won't successfully find a block

hmmm this make me think that there should be some incentive for a full node. maybe 50% POW -- 50% POS ?

tinof

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Quote from: chriswilmer on October 14, 2014, 11:50:33 AM

Quote from: noobtrader on October 14, 2014, 11:08:58 AM

Lets assume i have 1000 usd, todays bitcoin price around 400usd.

case 1 : buying bitcoin
with 1000 usd to buy bitcoin @400 usd each, i will get around 2.5 bitcoin. i can profit from trading with bullish OR bearish sentiment.

case 2: mining
with 1000 usd, i should get at least 1.5T miner, WHICH will net you around 2.5 bitcoin AFTER 4 month. and bearish sentiment will eat your soul.

am i right Huh

Don't forget different tax treatment if you are in the USA (mining is counted as ordinary income).

Most miners are mining at a loss. Can they write it off as loss?

raid_n

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Quote from: Asrael999 on October 14, 2014, 11:35:09 AM

its a bit more complicated than just mining bitcoin -

do you support the network if by mining at a pool you tip the pool over 50%?

The system needs more than just miners proving the transaction it also needs nodes - these broadcast the information around the system, the more nodes - that is full function nodes with bitcoin core running and a complete blockchain - (not something most asics worry about) the more secure the system. Running a full node is not incentivised, so the numbers are falling.
Pools reduce the number of nodes, but unless you mine in a pool you won't successfully find a block

While we should encourage full nodes that are not actively mining for a variety of reasons in terms of security it is a problematic statement.
Ultimately all passive clients will follow the longest chain as long as it is not invalid.
Security in terms of the blockchain is given through PoW. Full nodes can help relay information and make the network a bit more resistant to some attacks, but I feel that the long interval between blocks was specifically chosen to give ample time for information to disseminate.

A full node that is not mining can only relay information, it does not actively participate in the consensus process. If there were only 5 full nodes mining that are well connected to each other it is almost irrelevant how many other full nodes you have that are not mining, those 5 nodes will determine the contents of the blockchain and "secure" the network.

chriswilmer

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Quote from: noobtrader on October 14, 2014, 11:08:58 AM

Lets assume i have 1000 usd, todays bitcoin price around 400usd.

case 1 : buying bitcoin
with 1000 usd to buy bitcoin @400 usd each, i will get around 2.5 bitcoin. i can profit from trading with bullish OR bearish sentiment.

case 2: mining
with 1000 usd, i should get at least 1.5T miner, WHICH will net you around 2.5 bitcoin AFTER 4 month. and bearish sentiment will eat your soul.

am i right Huh

Don't forget different tax treatment if you are in the USA (mining is counted as ordinary income).

JimboToronto

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You're never too old to think young.

Quote from: gog1 on October 14, 2014, 11:17:19 AM

well, mining is just another way of acquiring bitcoins!

For some of us it's a fine way to provide a little heat to cool corners of our homes.

Just started mine up after being shut down since last spring.

Let's see how many satoshis per month it'll yield this year. Undecided

blatchcorn

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Quote from: Asrael999 on October 14, 2014, 11:27:23 AM

Quote from: blatchcorn on October 14, 2014, 11:25:04 AM

Quote from: coinableS on October 14, 2014, 11:20:46 AM

With buying you KNOW that you will get 2.5 BTC.

With buying a miner you hope you will hit 2.5 after 4 months. But what if the price skyrockets next week to a new ATH? The difficulty will spike and then it can take much longer to reach your 2.5.

Buying seems easier for me. I don't have to worry about power costs or upsetting the wife with a mining setup. She's already annoyed enough that I always talk about bitcoin. Cheesy

You can hedge against that risk with derivatives on www.btc.sx

you can hedge the price there - can you hedge the difficulty? I seem to remember some difficulty futures - but I thought those stopped trading sometime in the 1st quarter this year?

No you cannot hedge difficulty per se, but hedging the price should produce the same results

criptix

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Quote from: Asrael999 on October 14, 2014, 11:35:09 AM

Quote from: criptix on October 14, 2014, 11:27:58 AM

Quote from: Asrael999 on October 14, 2014, 11:24:06 AM

Quote from: criptix on October 14, 2014, 11:21:22 AM

Mining doesnt only give you bitcoins - with mining you are also supporting the bitcoin network without bitcoin would not work.

Imagine nobody mining and just try to buy... wouldnt even work in the first place

by adding a miner to a pool you don't improve the network - you only do that if you create a new node.

Please explain how i do not support the bitcoin network if i actively mine bitcoin? Thanks

its a bit more complicated than just mining bitcoin -

do you support the network if by mining at a pool you tip the pool over 50%?

The system needs more than just miners proving the transaction it also needs nodes - these broadcast the information around the system, the more nodes - that is full function nodes with bitcoin core running and a complete blockchain - (not something most asics worry about) the more secure the system. Running a full node is not incentivised, so the numbers are falling.
Pools reduce the number of nodes, but unless you mine in a pool you won't successfully find a block

Hashrate corrolates directly with network security so mining will always support the bitcoin network

All what you say is correct but its not a mining problem itself.

Asrael999

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Quote from: criptix on October 14, 2014, 11:27:58 AM

Quote from: Asrael999 on October 14, 2014, 11:24:06 AM

Quote from: criptix on October 14, 2014, 11:21:22 AM

Mining doesnt only give you bitcoins - with mining you are also supporting the bitcoin network without bitcoin would not work.

Imagine nobody mining and just try to buy... wouldnt even work in the first place

by adding a miner to a pool you don't improve the network - you only do that if you create a new node.

Please explain how i do not support the bitcoin network if i actively mine bitcoin? Thanks

its a bit more complicated than just mining bitcoin -

do you support the network if by mining at a pool you tip the pool over 50%?

The system needs more than just miners proving the transaction it also needs nodes - these broadcast the information around the system, the more nodes - that is full function nodes with bitcoin core running and a complete blockchain - (not something most asics worry about) the more secure the system. Running a full node is not incentivised, so the numbers are falling.
Pools reduce the number of nodes, but unless you mine in a pool you won't successfully find a block

chanz

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mining is more of a hobby for some people these days but as long as i can afford to run these babies they are never going to shutdown.

spazzdla

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Quote from: noobtrader on October 14, 2014, 11:19:19 AM

Quote from: gog1 on October 14, 2014, 11:17:19 AM

well, mining is just another way of acquiring bitcoins!

hmmm yes if the miner didnt break after few month.

All of my S1's have been running for well over half a year.

noobtrader

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Quote from: coinableS on October 14, 2014, 11:20:46 AM

With buying you KNOW that you will get 2.5 BTC.

With buying a miner you hope you will hit 2.5 after 4 months. But what if the price skyrockets next week to a new ATH? The difficulty will spike and then it can take much longer to reach your 2.5.

Buying seems easier for me. I don't have to worry about power costs or upsetting the wife with a mining setup. She's already annoyed enough that I always talk about bitcoin. Cheesy

criptix

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Quote from: Asrael999 on October 14, 2014, 11:24:06 AM

Quote from: criptix on October 14, 2014, 11:21:22 AM

Mining doesnt only give you bitcoins - with mining you are also supporting the bitcoin network without bitcoin would not work.

Imagine nobody mining and just try to buy... wouldnt even work in the first place

by adding a miner to a pool you don't improve the network - you only do that if you create a new node.

Please explain how i do not support the bitcoin network if i actively mine bitcoin? Thanks

Asrael999

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Quote from: blatchcorn on October 14, 2014, 11:25:04 AM

Quote from: coinableS on October 14, 2014, 11:20:46 AM

With buying you KNOW that you will get 2.5 BTC.

With buying a miner you hope you will hit 2.5 after 4 months. But what if the price skyrockets next week to a new ATH? The difficulty will spike and then it can take much longer to reach your 2.5.

Buying seems easier for me. I don't have to worry about power costs or upsetting the wife with a mining setup. She's already annoyed enough that I always talk about bitcoin. Cheesy

You can hedge against that risk with derivatives on www.btc.sx

you can hedge the price there - can you hedge the difficulty? I seem to remember some difficulty futures - but I thought those stopped trading sometime in the 1st quarter this year?

NotLambchop

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Quote from: noobtrader on October 14, 2014, 11:08:58 AM

...
am i right Huh

With mining, you have extra variables to consider--mainly if/how soon you get your miner, and hashrate increase. TL;DR: most non-commercial miners have lost money.

blatchcorn

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Quote from: coinableS on October 14, 2014, 11:20:46 AM

With buying you KNOW that you will get 2.5 BTC.

With buying a miner you hope you will hit 2.5 after 4 months. But what if the price skyrockets next week to a new ATH? The difficulty will spike and then it can take much longer to reach your 2.5.

Buying seems easier for me. I don't have to worry about power costs or upsetting the wife with a mining setup. She's already annoyed enough that I always talk about bitcoin. Cheesy

You can hedge against that risk with derivatives on www.btc.sx

Asrael999

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Quote from: criptix on October 14, 2014, 11:21:22 AM

Mining doesnt only give you bitcoins - with mining you are also supporting the bitcoin network without bitcoin would not work.

Imagine nobody mining and just try to buy... wouldnt even work in the first place

by adding a miner to a pool you don't improve the network - you only do that if you create a new node.

criptix

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Mining doesnt only give you bitcoins - with mining you are also supporting the bitcoin network without bitcoin would not work.

Imagine nobody mining and just try to buy... wouldnt even work in the first place

coinableS

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With buying you KNOW that you will get 2.5 BTC.

With buying a miner you hope you will hit 2.5 after 4 months. But what if the price skyrockets next week to a new ATH? The difficulty will spike and then it can take much longer to reach your 2.5.

Buying seems easier for me. I don't have to worry about power costs or upsetting the wife with a mining setup. She's already annoyed enough that I always talk about bitcoin. Cheesy

noobtrader

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Quote from: gog1 on October 14, 2014, 11:17:19 AM

well, mining is just another way of acquiring bitcoins!

hmmm yes if the miner didnt break after few month.

gog1

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well, mining is just another way of acquiring bitcoins!

Topic: simple stupid comparison of bitcoin mining and just buying (Read 1363 times)