The End.
My $.02.
Topic: Tarnished image (Read 5369 times)
Whether you are mining BTC with ASICS or LTC with scrypt, you cannot lose.
The End.
My $.02.
The End.
My $.02.
I disagree with the OP.
I just started mining in May. There are many nice people here who have been very helpful.
There is a certain level of frustration that seems to exist regarding ASICS, but I suppose that's what the horses felt when the automobile came onto the streets for the first time.
I'm sure it will pass.
I just started mining in May. There are many nice people here who have been very helpful.
There is a certain level of frustration that seems to exist regarding ASICS, but I suppose that's what the horses felt when the automobile came onto the streets for the first time.
I'm sure it will pass.
By using your logic, *every business becomes a zero-sum game*. If making widgets is profitable, more and more people start making widgets until the profit margin becomes zero. Therefore, widget manufacture is a zero-sum game. (widget = anything you want, a placeholder, fill in the blank)
Not all businesses are like Bitcoin mining; miners are in strict competition for a fixed reward. If widget supply goes up and demand is elastic, the total amount paid for widgets per day will increase... but the number of new Bitcoins created per day is fixed, and mining difficulty doesn't drive Bitcoin price. Mining is like a difficulty futures contract, and futures trading is zero-sum (unless the future in question influences you in some way, like farmers buying/selling crop futures).
Didn't you give up on logic and appeal to authority already?
Aaaagh!
You win 5 internets. I guess i'm just a bleedin' heart wussy, still thinking that no one's beyond help 
By using your logic, *every business becomes a zero-sum game*. If making widgets is profitable, more and more people start making widgets until the profit margin becomes zero. Therefore, widget manufacture is a zero-sum game. (widget = anything you want, a placeholder, fill in the blank)
Not all businesses are like Bitcoin mining; miners are in strict competition for a fixed reward. If widget supply goes up and demand is elastic, the total amount paid for widgets per day will increase... but the number of new Bitcoins created per day is fixed, and mining difficulty doesn't drive Bitcoin price. Mining is like a difficulty futures contract, and futures trading is zero-sum (unless the future in question influences you in some way, like farmers buying/selling crop futures).
Didn't you give up on logic and appeal to authority already?
[...]
Thinking more about the zero-sum mining thing... If Bitcoin's market cap is higher than the total sum spent mining (has anyone measured this?), it might be because the exchange rate has gone up since most of the coins have been mined. Coins which were sold and THEN gained value would be speculation profit, not mining profit. I'm assuming price drives difficulty but not vice-versa.
The main point I'm trying to make is if mining was positive-sum, more people would mine (reducing profits for other miners) until it became zero-sum.
Thinking more about the zero-sum mining thing... If Bitcoin's market cap is higher than the total sum spent mining (has anyone measured this?), it might be because the exchange rate has gone up since most of the coins have been mined. Coins which were sold and THEN gained value would be speculation profit, not mining profit. I'm assuming price drives difficulty but not vice-versa.
The main point I'm trying to make is if mining was positive-sum, more people would mine (reducing profits for other miners) until it became zero-sum.
By using your logic, *every business becomes a zero-sum game*. If making widgets is profitable, more and more people start making widgets until the profit margin becomes zero. Therefore, widget manufacture is a zero-sum game. (widget = anything you want, a placeholder, fill in the blank)
Quote
With expensive hardware it makes sense to mine at a slight loss sometimes, since hardware is a sunk cost.
Yes, sometimes. It's like putting up a buy wall in hopes of stemming the sell tide. Anyone not heavily invested in the currency they're mining at a loss is a fool or a good Bitcoin Samaritan. Call me jaded, but i don't like the odds with either one.
Quote
So if we're in an ASIC bubble, could the market be temporarily negative sum?
No.
This video helps explain multisignature transactions and micropayments.
http://www.youtube.com/watch?v=mD4L7xDNCmA
One can already do command-line multisignature transactions with the Satoshi client, but it's a big hassle.
Open-Transactions shows great promise as an off-chain solution; I suggest anyone who wants both small blocks and low fees should consider helping with its development either directly or via the "holy grail" bounties.
https://bitcointalksearch.org/topic/holy-grail-bounty-225954
Ripple could be an off-chain solution too, but I'm not holding my breath waiting for them to release the source code.
In-chain micropayments appear to be further away, though.
========
Thinking more about the zero-sum mining thing... If Bitcoin's market cap is higher than the total sum spent mining (has anyone measured this?), it might be because the exchange rate has gone up since most of the coins have been mined. Coins which were sold and THEN gained value would be speculation profit, not mining profit. I'm assuming price drives difficulty but not vice-versa.
The main point I'm trying to make is if mining was positive-sum, more people would mine (reducing profits for other miners) until it became zero-sum. With expensive hardware it makes sense to mine at a slight loss sometimes, since hardware is a sunk cost. So if we're in an ASIC bubble, could the market be temporarily negative sum?
http://www.youtube.com/watch?v=mD4L7xDNCmA
One can already do command-line multisignature transactions with the Satoshi client, but it's a big hassle.
Open-Transactions shows great promise as an off-chain solution; I suggest anyone who wants both small blocks and low fees should consider helping with its development either directly or via the "holy grail" bounties.
https://bitcointalksearch.org/topic/holy-grail-bounty-225954
Ripple could be an off-chain solution too, but I'm not holding my breath waiting for them to release the source code.
In-chain micropayments appear to be further away, though.
========
Thinking more about the zero-sum mining thing... If Bitcoin's market cap is higher than the total sum spent mining (has anyone measured this?), it might be because the exchange rate has gone up since most of the coins have been mined. Coins which were sold and THEN gained value would be speculation profit, not mining profit. I'm assuming price drives difficulty but not vice-versa.
The main point I'm trying to make is if mining was positive-sum, more people would mine (reducing profits for other miners) until it became zero-sum. With expensive hardware it makes sense to mine at a slight loss sometimes, since hardware is a sunk cost. So if we're in an ASIC bubble, could the market be temporarily negative sum?
Transactions per block growing too quickly for current 1MB size limit (increased size will hurt smaller pools but most people don't give a shit).
In addition to block size increases, there are a couple improvements coming down the line to help with transaction volume:1) Micropayment channels will allow sites like Satoshi Dice to compress each customer into a single transaction per block.
2) Off-chain transactions will be much more secure when they start using multi-signature transaction to hold funds.
Hopefully (fingers crossed!) these will be in easy-to-use clients before Bitcoin gets much more popular.
how exactly does that work?
what is a 'multi-signature' off-chain transaction?
Transactions per block growing too quickly for current 1MB size limit (increased size will hurt smaller pools but most people don't give a shit).
In addition to block size increases, there are a couple improvements coming down the line to help with transaction volume:1) Micropayment channels will allow sites like Satoshi Dice to compress each customer into a single transaction per block.
2) Off-chain transactions will be much more secure when they start using multi-signature transaction to hold funds.
Hopefully (fingers crossed!) these will be in easy-to-use clients before Bitcoin gets much more popular.
Distrust of your peers won't bring down bitcoin but it sure won't help it get anywhere. By that I mean more focus should be on how to sustain bitcoin in the long run. Dying GPU mining means fewer miners with ASICs becoming more common so more future bitcoins for fewer people. Fewer coins being mined to cover costs. Transactions per block growing too quickly for current 1MB size limit (increased size will hurt smaller pools but most people don't give a shit). Lost coins (a significant amount of the 11.3m -ish coins currently). We get fair discussion on these items but they are overshadowed by flaming competitions among the large drama user base over future predictions to the point that it's not worth discussing any new insight. To quote a work saying I know, negativity kills productivity.
I think this is the biggest challenge of bitcoin though I'm hopeful that with an increasing difficulty will be good for the community. Less complaining originating from miners looking to make any money at all and more on uses for bitcoin and solving problems like the sliver above. I don't think bitcoins should really be viewed as a way to make money at all and I only support covering transaction costs in the long run (no problem with speculation though for making/losing money).
I think this is the biggest challenge of bitcoin though I'm hopeful that with an increasing difficulty will be good for the community. Less complaining originating from miners looking to make any money at all and more on uses for bitcoin and solving problems like the sliver above. I don't think bitcoins should really be viewed as a way to make money at all and I only support covering transaction costs in the long run (no problem with speculation though for making/losing money).
Could be a bad OMEN
Let's use an analogy to see clearly what's going on.
Imagine a large gold vein is discovered in a nearby mountainside. At first the gold is so plentiful that anyone can get in with nothing more than a pie pan and pan for gold (CPU mining for BTC), and make a profit doing so. People see these other people mining the cheap and easy gold and jump in, but the cheap and easy gold starts to go away, and mining becomes more difficult. Mining with a cheap pie pan isn't worth it anymore, so some people quit, while others buy more expensive equipment, say a sluice or dredge and get to work obtaining the more-difficult-to-mine gold (GPU mining for BTC). As more and more gold is mined, eventually even this equipment doesn't get you much, and now folks either have to buy more expensive equipment to mine the gold, or quit. Some people invest in large scale mining plants to get the difficult-to-mine gold (ASIC mining for BTC), while those with pie pans complain that it's too hostile for new miners to make any profit. They have no right to complain, the time of easy pickings is gone. Does this mean that gold will cease being a valuable currency? No, it just means you either have to invest real money into machines that can mine profitably, or don't mine at all and just buy BTC outright.
Imagine a large gold vein is discovered in a nearby mountainside. At first the gold is so plentiful that anyone can get in with nothing more than a pie pan and pan for gold (CPU mining for BTC), and make a profit doing so. People see these other people mining the cheap and easy gold and jump in, but the cheap and easy gold starts to go away, and mining becomes more difficult. Mining with a cheap pie pan isn't worth it anymore, so some people quit, while others buy more expensive equipment, say a sluice or dredge and get to work obtaining the more-difficult-to-mine gold (GPU mining for BTC). As more and more gold is mined, eventually even this equipment doesn't get you much, and now folks either have to buy more expensive equipment to mine the gold, or quit. Some people invest in large scale mining plants to get the difficult-to-mine gold (ASIC mining for BTC), while those with pie pans complain that it's too hostile for new miners to make any profit. They have no right to complain, the time of easy pickings is gone. Does this mean that gold will cease being a valuable currency? No, it just means you either have to invest real money into machines that can mine profitably, or don't mine at all and just buy BTC outright.
And then JP Morgan and HSBC started manipulating the gold price and supressing it so all gold holders lose value. In the case of Bitcoin that would be big investors like Peter Thiel and the Winklevii. Common people will always lose.
Do me a favor and take a picture of your electric bill and block all your personal information and post it here and lets see what you pay for electricity.
This is how I calculate my power costs. I take the amount due / KWh used on the bill or from your killawatt. That gives me my cost.
I will post mine after yours to show you how much I pay.
As for the OP I was stating a trend that the jumps between technology spurts are making ROI difficult due to a shorter time spans between jumps of difficulty.
Most 1st gen asics will not pay for them selves if you buy them now.
I live at home, so technically my power costs are 0. But, I get power for 0.08$ a kwh, and my computer uses 350 watts. So, 0.35kw*24hours*0.08$ = 0.67$ of power per day. I haven't checked out my rig with a killawatt, I've just estimated the 350 watts, seeing as the GPU takes 100 watts running at 100%
EDIT:: You may ask where I get 0.08$ for power.... Canada!
EDIT EDIT:: I ran these initial calculations with the coin price at 120$... So I guess once I get below 0.007 BTC/day its not worth the power...
EDIT EDIT EDIT:: Also, you can run a Jalapeno off of a Rasberry Pi... So that power consumption is tiny, less then 50 watts, which for me is less then 0.10$ a day for power. I'm waiting to see if BFL ever ships, and once they start catching up with orders, and as long as the difficulty is less then 200 million by then, I'm buying a Jalapeno to continue my small mining efforts.
@Mooc
I don't see the ASIC's kicking everyone out of the market yet. When I started mining, the difficulty was about 10 million, and with my dinky little GPU (6870) I could make 0.0167 coins per day. Now, with the difficulty spikes, I'm down to 0.0072 coins per day (once its below 0.006, its not worth the power...)
So, if we look at all the ASICs coming out, there is about 900 Terahashes of hardware being built. The difficulty before ASICs was about 100 Terahashes, perhaps lower. So, Once the ASICs are all out, we'll be sitting at 1000 terahashes (A whole petahash!). 10x network increase gives a 10x difficulty increase.
Say you get a little Jalapeno (300$, similar to my 6870 being ~300$), with the 10x difficulty, that jalapeno will make about 0.02 BTC per day. That's pretty much equivalent to the current GPU standard...
I don't believe that the massive difficulty spikes will continue forever, I think they will just continue until all the ASIC preorders are filled, then they will level off, and it will be back to the ~10% difficulty jumps. And that will bring us back to where we are with GPUs.
TL,DR, ASICs coming out are not impending doom, it's just the next step from GPUs. It should be equally profitable to continue in the future.
I don't see the ASIC's kicking everyone out of the market yet. When I started mining, the difficulty was about 10 million, and with my dinky little GPU (6870) I could make 0.0167 coins per day. Now, with the difficulty spikes, I'm down to 0.0072 coins per day (once its below 0.006, its not worth the power...)
So, if we look at all the ASICs coming out, there is about 900 Terahashes of hardware being built. The difficulty before ASICs was about 100 Terahashes, perhaps lower. So, Once the ASICs are all out, we'll be sitting at 1000 terahashes (A whole petahash!). 10x network increase gives a 10x difficulty increase.
Say you get a little Jalapeno (300$, similar to my 6870 being ~300$), with the 10x difficulty, that jalapeno will make about 0.02 BTC per day. That's pretty much equivalent to the current GPU standard...
I don't believe that the massive difficulty spikes will continue forever, I think they will just continue until all the ASIC preorders are filled, then they will level off, and it will be back to the ~10% difficulty jumps. And that will bring us back to where we are with GPUs.
TL,DR, ASICs coming out are not impending doom, it's just the next step from GPUs. It should be equally profitable to continue in the future.
Do me a favor and take a picture of your electric bill and block all your personal information and post it here and lets see what you pay for electricity.
This is how I calculate my power costs. I take the amount due / KWh used on the bill or from your killawatt. That gives me my cost.
I will post mine after yours to show you how much I pay.
As for the OP I was stating a trend that the jumps between technology spurts are making ROI difficult due to a shorter time spans between jumps of difficulty.
Most 1st gen asics will not pay for them selves if you buy them now.
@Mooc
I don't see the ASIC's kicking everyone out of the market yet. When I started mining, the difficulty was about 10 million, and with my dinky little GPU (6870) I could make 0.0167 coins per day. Now, with the difficulty spikes, I'm down to 0.0072 coins per day (once its below 0.006, its not worth the power...)
So, if we look at all the ASICs coming out, there is about 900 Terahashes of hardware being built. The difficulty before ASICs was about 100 Terahashes, perhaps lower. So, Once the ASICs are all out, we'll be sitting at 1000 terahashes (A whole petahash!). 10x network increase gives a 10x difficulty increase.
Say you get a little Jalapeno (300$, similar to my 6870 being ~300$), with the 10x difficulty, that jalapeno will make about 0.02 BTC per day. That's pretty much equivalent to the current GPU standard...
I don't believe that the massive difficulty spikes will continue forever, I think they will just continue until all the ASIC preorders are filled, then they will level off, and it will be back to the ~10% difficulty jumps. And that will bring us back to where we are with GPUs.
TL,DR, ASICs coming out are not impending doom, it's just the next step from GPUs. It should be equally profitable to continue in the future.
I don't see the ASIC's kicking everyone out of the market yet. When I started mining, the difficulty was about 10 million, and with my dinky little GPU (6870) I could make 0.0167 coins per day. Now, with the difficulty spikes, I'm down to 0.0072 coins per day (once its below 0.006, its not worth the power...)
So, if we look at all the ASICs coming out, there is about 900 Terahashes of hardware being built. The difficulty before ASICs was about 100 Terahashes, perhaps lower. So, Once the ASICs are all out, we'll be sitting at 1000 terahashes (A whole petahash!). 10x network increase gives a 10x difficulty increase.
Say you get a little Jalapeno (300$, similar to my 6870 being ~300$), with the 10x difficulty, that jalapeno will make about 0.02 BTC per day. That's pretty much equivalent to the current GPU standard...
I don't believe that the massive difficulty spikes will continue forever, I think they will just continue until all the ASIC preorders are filled, then they will level off, and it will be back to the ~10% difficulty jumps. And that will bring us back to where we are with GPUs.
TL,DR, ASICs coming out are not impending doom, it's just the next step from GPUs. It should be equally profitable to continue in the future.
1) If you add up all the gains from mining, and subtract all the costs, you think this number will be greater than zero?
Yes, ffs! Unless you think that the $1 billion market cap for Bitcoin is the cost of gear & electricity for the miners up to this point. (HINT: Daddy, where do Bitcoin come from? The miners make 'em, Explodicle, the miners.Logic obviously won't win you over, perhaps authority would? Look at the reply by DeatAndTaxes, a few posts up. He's a respected member with 10,000 posts to his name.
At the current exchange rate the mining "game" has a positive sum of 25*6*24*365*~$100 = $131,400,000 annually.
Where did you subtract the costs of hardware, electricity, and labor from that sum?OMFG. I give. You win.
1) If you add up all the gains from mining, and subtract all the costs, you think this number will be greater than zero?
Yes, ffs! Unless you think that the $1 billion market cap for Bitcoin is the cost of gear & electricity for the miners up to this point. (HINT: Daddy, where do Bitcoin come from? The miners make 'em, Explodicle, the miners.At the current exchange rate the mining "game" has a positive sum of 25*6*24*365*~$100 = $131,400,000 annually.
Where did you subtract the costs of hardware, electricity, and labor from that sum? Yo OP, if you're still around, would you mind moving this thread to the Mining board? Thanks.
If the power efficiency of your rig is great enough to overcome the difficulty of the blocks and gain enough moneys' worth of bitcoins to cover the cost of the electricity to hurdle the variably-difficult block, and then some, the answer will in fact be yes. Obviously, the asic is power efficient enough to do this yet the GPU no longer is. The difficulty will keep rising the more asics people put to work, and therefore the money everyone gets out of the whole ordeal will keep going down until the difficulty is too high for the typical asic to get money out of it. The money that comes out of it has to do with the price of the bitcoin, which has to do with the popularity of bitcoin, which also affects the number of people trying to mine. Everything is interwoven to affect the difficulty of blocks and if you want to mine you will, in some way, have to predict how long your miner will be able to make money. The speed of your miner is completely irrelevant, mind you, that's only relevant to the amount of money you gain or lose, not if you gain or lose it.
TL;DR: It depends on your mining rig.
1) If you add up all the gains from mining, and subtract all the costs, you think this number will be greater than zero?
If the power efficiency of your rig is great enough to overcome the difficulty of the blocks and gain enough moneys' worth of bitcoins to cover the cost of the electricity to hurdle the variably-difficult block, and then some, the answer will in fact be yes. Obviously, the asic is power efficient enough to do this yet the GPU no longer is. The difficulty will keep rising the more asics people put to work, and therefore the money everyone gets out of the whole ordeal will keep going down until the difficulty is too high for the typical asic to get money out of it. The money that comes out of it has to do with the price of the bitcoin, which has to do with the popularity of bitcoin, which also affects the number of people trying to mine. Everything is interwoven to affect the difficulty of blocks and if you want to mine you will, in some way, have to predict how long your miner will be able to make money. The speed of your miner is completely irrelevant, mind you, that's only relevant to the amount of money you gain or lose, not if you gain or lose it.
TL;DR: It depends on your mining rig.
Well I guess I should as it would allow others to join in and enjoy MY THREAD!!! lol
Going to move it to mining.
Mining isn't a zero sum game. It is a fixed positive sum game. Maybe that is why you are confused.
A zero sum mining game would be that all miners need to put a certain amount of Bitcoins into escrow. Once 25 BTC have been escrowed a satoshi is randomly selected and the miner who owns it gets the entire escrow amount.
Zero sum =/= Fixed Positive Sum.
At the current exchange rate the mining "game" has a positive sum of 25*6*24*365*~$100 = $131,400,000 annually.
A zero sum mining game would be that all miners need to put a certain amount of Bitcoins into escrow. Once 25 BTC have been escrowed a satoshi is randomly selected and the miner who owns it gets the entire escrow amount.
Zero sum =/= Fixed Positive Sum.
At the current exchange rate the mining "game" has a positive sum of 25*6*24*365*~$100 = $131,400,000 annually.
Yo OP, if you're still around, would you mind moving this thread to the Mining board? Thanks.
If the power efficiency of your rig is great enough to overcome the difficulty of the blocks and gain enough moneys' worth of bitcoins to cover the cost of the electricity to hurdle the variably-difficult block, and then some, the answer will in fact be yes. Obviously, the asic is power efficient enough to do this yet the GPU no longer is. The difficulty will keep rising the more asics people put to work, and therefore the money everyone gets out of the whole ordeal will keep going down until the difficulty is too high for the typical asic to get money out of it. The money that comes out of it has to do with the price of the bitcoin, which has to do with the popularity of bitcoin, which also affects the number of people trying to mine. Everything is interwoven to affect the difficulty of blocks and if you want to mine you will, in some way, have to predict how long your miner will be able to make money. The speed of your miner is completely irrelevant, mind you, that's only relevant to the amount of money you gain or lose, not if you gain or lose it.
TL;DR: It depends on your mining rig.
1) If you add up all the gains from mining, and subtract all the costs, you think this number will be greater than zero?
If the power efficiency of your rig is great enough to overcome the difficulty of the blocks and gain enough moneys' worth of bitcoins to cover the cost of the electricity to hurdle the variably-difficult block, and then some, the answer will in fact be yes. Obviously, the asic is power efficient enough to do this yet the GPU no longer is. The difficulty will keep rising the more asics people put to work, and therefore the money everyone gets out of the whole ordeal will keep going down until the difficulty is too high for the typical asic to get money out of it. The money that comes out of it has to do with the price of the bitcoin, which has to do with the popularity of bitcoin, which also affects the number of people trying to mine. Everything is interwoven to affect the difficulty of blocks and if you want to mine you will, in some way, have to predict how long your miner will be able to make money. The speed of your miner is completely irrelevant, mind you, that's only relevant to the amount of money you gain or lose, not if you gain or lose it.
TL;DR: It depends on your mining rig.
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