Topic: So two things... (Read 2134 times)

mrjones your numbers are right but thats only if bitcoins stay at the current value. As the difficulty goes up it will be harder for each miner to get bitcoins and as something becomes scarce its value goes up. I forget who it was that posted a chart recently showing that bitcoin value has been fallowing the mining difficulty trend pretty closely. If difficulty goes up 13% a week you can expect long term bitcoin value to go up every week.

That's a hard one to answer, but the first question would be, how much is enough?

My suspicion is that by the time the reward drops from 50 to 25, Bitcoin will either be dead - or very, *very* robust.

If the latter, then 25 BTC will convert (to any currency) at a /much/ higher rate than it does now.  So if 25 BTC will then be worth more than 50 is now, I don't believe there will be any fewer miners - probably more.

And... Moore's Law... mining hardware will be cheaper by then.

There's another component to this that has me concerned.  It's true that a balance will be reached at which the value of BTC allows for a marginal profit for efficient miners and that transactions will continue to be confirmed.  However, will the resultant hash rate be sufficient to prevent attack by supercomputers and botnets?  Also, what happens when mining reward drops from 50 to 25 BTC?  It's not clear to me that there will always be enough people interested in mining to keep the hash rate sufficiently high to ward off attacks.

I'm thinking of hosting a minecraft server with bitcoin based donations
But it's just a thougt, have to work in it ^^
Also this is a little much off-topic
Greetz

Hehehe...and I just bought a 5970 last week. Sucks that I'll have maybe a few more months before it becomes unprofitable to mine with it. It's ok though as my aspiration for bitcoin is that it catches on and sort of goes more 'mainstream'. Mining is fun and all but it should not be what bitcoin becomes well known for. I wish more people would start some sort of bitcoin based business - invest in that instead of mining hardware.

Nice answers, thanks to both
I've searched for such answers but I didn't found...
Any documentation for BitCoin you recommend? (Want to understand the system, but sometimes I've got questions.)
Greetz

It's not that no one will mine, it's that only those who are already vested, and those who have particularly favorable electric rates, will continue to mine.  If every marginal miner stopped mining as soon as it was economicly unfavorable for them to do so, the difficulty would stagnate at that level until something changed.  The value of the bitcoin could go up, which would make mining profitable again at the same difficulty level; or the difficulty level could go down.  This is how the balance is created.  As it is, there is already evidence that balance has been found, as the difficulty appears to track the 6 weeks rolling average price closely.  Said another way, as the price goes up, more miners join the network; and as the price drops, the most marginal miners drop out first.

No. If people stop mining then difficulty will go down to keep speed at 1 block per ~10 minutes.

Small question (as you are good in math )

I think others think like you and the most will stop to mine in about 30 weeks.
Could it be that the BitCoin system is compromised in some way?
It would mean, that the difficulty must change to a better rate, but if it doesn't, no one would mine.
If nobody mines, the system doesn't works anymore.
Are my thoughts correct?
Greetz

Wow, great math thanks. It really does seem that it's pointless to "mine" for money now. Best way to make money is typical stock market stuff, buy low, sell high.

The difficulty changes every 2016 blocks, which on average will be once every two weeks.  It can change by up to a factor of four in either direction, but lately has been much less than that.  Right now, the difficulty is 82347, and best estimates say it will increase to 93094 at the next change in 717 blocks (+13%).

Suppose you had a configuration that could produce 580 million hashes per second (roughly a pair of 6950's).  That means it takes 7 days, 1 hour, 23 minutes to generate 50 bitcoins on average right now.  That's just a hair under 50 bitcoins per week.  Let's say 49.35, which is a number I happened to do the math with earlier today.

As a simple example, consider the case where the difficulty continued to increase by 13% every two weeks for a year.  We'll assume the difficulty changes exactly every two weeks for simplicity.  That means the following would happen:


The current exchange rate is USD 0.92 for one BTC.  (Please note that I am not considering exchange rate fluctuations; that is a different topic, and if you want to make money on exchange rate speculation, you can simply buy the bitcoins rather than generate them.)

Each 6950 consumes 200 watts at full load, so that is 400 watts total.  A high-end power supply is approximately 85% efficient, so that means they will consume 470 watts of power.  Per day, that is 11.28 kilowatt hours, or 78.96 per week.  According to the Department of Energy the average power cost in the US right now is 11.04 US cents per kilowatt hour, which means a cost of USD 8.71 per week.

That means that after week 30, you would actually be losing money, so you would stop then.

Up to week 30, you will have made 660 bitcoins, which at the current exchange rate is USD 607.20.  Your electricity costs will have been USD 261.30.  This gives you a net profit of USD 345.90.

Considering that a 6950 sells for USD 240 right now, this does not pay for the cards (let alone any associated computer) before mining with them is no longer profitable.  You will need to sell the cards to see a profit.  The days of making a fortune in the bitcoin market by buying hardware are likely numbered.

1. I doubt that, especially if they're in the same machine. What I was talking about in the other thread was ATI 4xxx cards and Nvidia.

2. No idea what it will be in a year, but it depends a lot on how the price of bitcoins develop.

If I'm running 2x 6950's then I'm probably paying more in electricity than money I am generating... correct?

Second question. The difilculty within a year changes how much? Will 2x 6950's generate a good amount of bitcoin for another year or do you guys have to upgrade GPU's for bitcoins every year?