The negative impact of mining farms - page 4.

DaRude

legendary

Activity: 2833

Merit: 1851

In order to dump coins one must have coins

Quote from: brg444 on October 26, 2014, 08:37:08 PM

Quote from: DaRude on October 26, 2014, 08:31:21 PM

Bottom line is money has to come from somewhere to cover costs and generate fiat profit. And your argument that they'd rather indefinitely raise capital from VCs to cover their costs rather than sell their own inventory is conceptually flawed. Simple as that.

You are one stubborn fellow

I know people on this forum tend to be very selective in their reading but did you not read the part where they have made/are making millions selling mining gear or did you conveniently ignore it?

On GAWMiners :

Quote

The company was an overnight success and achieved over $10M in sales during its first month and is on schedule to do $100M in this first year.

KNC :

Quote

Since KnC started in June last year, it has sold bitcoin mining computers worth $75 million.

I can't pull up any numbers for BitFury but my guess is it is more than both these two.

Sales != profit.

And again you're whole argument seems to be that they're so profitable they can do whatever they want. Even if that the case in one instance, clearly that's not sustainable on a long term scale

brg444

hero member

Activity: 644

Merit: 504

Bitcoin replaces central, not commercial, banks

Quote from: DaRude on October 26, 2014, 08:31:21 PM

Bottom line is money has to come from somewhere to cover costs and generate fiat profit. And your argument that they'd rather indefinitely raise capital from VCs to cover their costs rather than sell their own inventory is conceptually flawed. Simple as that.

You are one stubborn fellow

I know people on this forum tend to be very selective in their reading but did you not read the part where they have made/are making millions selling mining gear or did you conveniently ignore it?

On GAWMiners :

Quote

The company was an overnight success and achieved over $10M in sales during its first month and is on schedule to do $100M in this first year.

KNC :

Quote

Since KnC started in June last year, it has sold bitcoin mining computers worth $75 million.

I can't pull up any numbers for BitFury but my guess is it is more than both these two.

DaRude

legendary

Activity: 2833

Merit: 1851

In order to dump coins one must have coins

Quote from: brg444 on October 26, 2014, 08:20:59 PM

Quote from: DaRude on October 26, 2014, 08:12:56 PM

Again the fact that this one time event was so against the norm that it made the news should hint on how the normal course of business goes. Would BitFury selling their inventory to fund new farm made the news??? Think that be considered the normal course of business

That was no event. This quote made the news because it was a comment made after the announcement of yet another round of VC funding.

Here's another one from Josh Garza from GAWMiners at Hashers United conference :

Quote

Garza voiced the least concern regarding the price, saying that ultimately, the value of bitcoin is underpinned not so much by the consumers and merchants who use and accept digital currency but by the miners who facilitate the whole network.

“Miners believe in the currency the most,” he said.

More from this conference :

Quote

Terpin polled the crowd by asking how many sell a certain percentage of their bitcoins for fiat currencies like the dollar. One only miner raised their hand when Terpin asked if they sold 100% of their bitcoin for dollars, and about one-third of the crowd indicated that they don’t sell any of their generated bitcoins.

Again, I'm not saying all of the miners keep 100% of their coins but it is naive to believe the majority of them dump their Bitcoins for fiat

DaRude

legendary

Activity: 2833

Merit: 1851

In order to dump coins one must have coins

Quote from: ElectricMucus on October 26, 2014, 07:48:33 PM

Quote from: DaRude on October 26, 2014, 07:31:40 PM

Quote from: MrBig on October 26, 2014, 07:21:07 PM

I've already tried to make this same point multiple times in this thread, but it just seems to make the naysayers more stubborn. These mega-mining farms are working to devour their competition while raking in the dough. They're not delusional hodlers who are betting on BTC going to the moon in 10 years or whatever. There's profits to be taken right now, and these people are ready to milk this cash cow dry.

Yeah i'm yet to hear a valid counter point to this. Although i don't see them as evil, just part of the ecosystem/capitalism. Hope the halving and a risk of a hard fork if they get out of control would keep them in check.

Not really a counter, just this: It's possible that nobody who is starting mining now breaks even, even with cheap or stolen electricity. (If you'll assume a constant btc price, free electricity and >2% periodic difficulty increase for instance no consumer miner makes money ever)
In that sense Bitcoin mining is a gamble in it's own and so larger mining farms aren't necessarily more risk-aware.

I think we'll see a few weeks where mining costs more in electricity alone some time in the coming months like we did in 2011.

not sure how many time "significantly below $400" per unit can be quoted here. If they're profitable why can't other ASIC manufacturers be?

DaRude

legendary

Activity: 2833

Merit: 1851

In order to dump coins one must have coins

Quote from: brg444 on October 26, 2014, 07:40:37 PM

Quote from: DaRude on October 26, 2014, 07:31:40 PM

Yeah i'm yet to hear a valid counter point to this. Although i don't see them as evil, just part of the ecosystem/capitalism. Hope the halving and a risk of a hard fork if they get out of control would keep them in check.

Quote from: brg444 on October 25, 2014, 12:06:52 PM

Quote

BitFury founder and CEO Valery Vavilov indicated that the new funding will allow the company to complete production of its 28nm ASIC chip without selling the reserve bitcoins it has mined from its three industrial-scale data centres.

Quote

Vavilov told CoinDesk that it decided not to tap its bitcoin reserves as it remains bullish on the long-term value of bitcoin.

"We believe in the long-term perspective [the price of bitcoin] will grow and we decided to not to sell [our bitcoin] at such a low price," Vavilov added.

Again the fact that this one time event was so against the norm that it made the news should hint on how the normal course of business goes. Would BitFury selling their inventory to fund new farm made the news??? Think that be considered the normal course of business

brg444

hero member

Activity: 644

Merit: 504

Bitcoin replaces central, not commercial, banks

Quote from: ElectricMucus on October 26, 2014, 08:02:19 PM

Quote from: brg444 on October 26, 2014, 07:55:59 PM

Quote from: ElectricMucus on October 26, 2014, 07:48:33 PM

Not really a counter, just this: It's possible that nobody who is starting mining now breaks even, even with cheap or stolen electricity. (If you'll assume a constant btc price, free electricity and >2% periodic difficulty increase for instance no consumer miner makes money ever)
In that sense Bitcoin mining is a gamble in it's own and so larger mining farms aren't necessarily more risk-aware.

This is not the case, it certainly is still doable to mine at profit, even at current price

With a theoretical ROI of over a year which is far from certain. If the price tanks even further I'd even say that most of these farms gonna be out of business a year from now.

Sure, that's if you believe the price is still gonna be down a year from now.

They're betting it won't and you can be certain they know more than you about the dynamics of this market.

ElectricMucus

legendary

Activity: 1666

Merit: 1057

Marketing manager - GO MP

Quote from: brg444 on October 26, 2014, 07:55:59 PM

Quote from: ElectricMucus on October 26, 2014, 07:48:33 PM

Not really a counter, just this: It's possible that nobody who is starting mining now breaks even, even with cheap or stolen electricity. (If you'll assume a constant btc price, free electricity and >2% periodic difficulty increase for instance no consumer miner makes money ever)
In that sense Bitcoin mining is a gamble in it's own and so larger mining farms aren't necessarily more risk-aware.

This is not the case, it certainly is still doable to mine at profit, even at current price

With a theoretical ROI of over a year which is far from certain. If the price tanks even further I'd even say that most of these farms gonna be out of business a year from now.

brg444

hero member

Activity: 644

Merit: 504

Bitcoin replaces central, not commercial, banks

Quote from: ElectricMucus on October 26, 2014, 07:48:33 PM

Not really a counter, just this: It's possible that nobody who is starting mining now breaks even, even with cheap or stolen electricity. (If you'll assume a constant btc price, free electricity and >2% periodic difficulty increase for instance no consumer miner makes money ever)
In that sense Bitcoin mining is a gamble in it's own and so larger mining farms aren't necessarily more risk-aware.

This is not the case, it certainly is still doable to mine at profit, even at current price

ElectricMucus

legendary

Activity: 1666

Merit: 1057

Marketing manager - GO MP

Quote from: DaRude on October 26, 2014, 07:31:40 PM

Quote from: MrBig on October 26, 2014, 07:21:07 PM

I've already tried to make this same point multiple times in this thread, but it just seems to make the naysayers more stubborn. These mega-mining farms are working to devour their competition while raking in the dough. They're not delusional hodlers who are betting on BTC going to the moon in 10 years or whatever. There's profits to be taken right now, and these people are ready to milk this cash cow dry.

Yeah i'm yet to hear a valid counter point to this. Although i don't see them as evil, just part of the ecosystem/capitalism. Hope the halving and a risk of a hard fork if they get out of control would keep them in check.

Not really a counter, just this: It's possible that nobody who is starting mining now breaks even, even with cheap or stolen electricity. (If you'll assume a constant btc price, free electricity and >2% periodic difficulty increase for instance no consumer miner makes money ever)
In that sense Bitcoin mining is a gamble in it's own and so larger mining farms aren't necessarily more risk-aware.

I think we'll see a few weeks where mining costs more in electricity alone some time in the coming months like we did in 2011.

brg444

hero member

Activity: 644

Merit: 504

Bitcoin replaces central, not commercial, banks

Quote from: DaRude on October 26, 2014, 07:31:40 PM

Yeah i'm yet to hear a valid counter point to this. Although i don't see them as evil, just part of the ecosystem/capitalism. Hope the halving and a risk of a hard fork if they get out of control would keep them in check.

Quote from: brg444 on October 25, 2014, 12:06:52 PM

Quote

BitFury founder and CEO Valery Vavilov indicated that the new funding will allow the company to complete production of its 28nm ASIC chip without selling the reserve bitcoins it has mined from its three industrial-scale data centres.

Quote

Vavilov told CoinDesk that it decided not to tap its bitcoin reserves as it remains bullish on the long-term value of bitcoin.

"We believe in the long-term perspective [the price of bitcoin] will grow and we decided to not to sell [our bitcoin] at such a low price," Vavilov added.

DaRude

legendary

Activity: 2833

Merit: 1851

In order to dump coins one must have coins

Quote from: MrBig on October 26, 2014, 07:21:07 PM

I've already tried to make this same point multiple times in this thread, but it just seems to make the naysayers more stubborn. These mega-mining farms are working to devour their competition while raking in the dough. They're not delusional hodlers who are betting on BTC going to the moon in 10 years or whatever. There's profits to be taken right now, and these people are ready to milk this cash cow dry.

Yeah i'm yet to hear a valid counter point to this. Although i don't see them as evil, just part of the ecosystem/capitalism. Hope the halving and a risk of a hard fork if they get out of control would keep them in check.

brg444

hero member

Activity: 644

Merit: 504

Bitcoin replaces central, not commercial, banks

Quote from: MrBig on October 26, 2014, 07:21:07 PM

Quote from: DaRude on October 26, 2014, 07:12:45 PM

Quote from: ElectricMucus on October 26, 2014, 01:08:10 PM

Larger and larger mining farms are not what's increasing selling pressure. To the contrary, the larger the farm the cheaper the electricity and the cheaper the hardware to better the operating margin becomes.
A high operating margin gives miners the option to retain more of the mined Bitcoins while a low operating margin forces the miner to sell or at least get more capital by other means to pay bills.

Mining farms are in the business of mining, not risk taking on currency fluctuation. Once gain if they're so profitable in mining the logical thing is to reinvest that income and expand the profitable mining operation, not horde your inventory in hopes it goes up. Just like a gold mining, i'm assuming they sell most of their resources as soon if not before they get it, they don't speculate on price swings (much).

And once again there are 3600BTC mined EVERY day. Either by mega farms or solo miners across the glove. In both cases i think everyone agrees that MAJORITY of those BTC will end up on the market, so market needs to find a price point at which those BTC can be absorbed. Now the argument is:
1-who is more likely to sell most of mined coins, mega farms or your solo farmers?
2-And by how much? If it's by 1-2% does it really make a difference.

I think history shows that first miners were horders, and actually just did it as a hobby at a loss. So i tend to lean that mega farmers would sell more, but again how much does it matter? There will be 3600new btc today and someone will own them

I've already tried to make this same point multiple times in this thread, but it just seems to make the naysayers more stubborn. These mega-mining farms are working to devour their competition while raking in the dough. They're not delusional hodlers who are betting on BTC going to the moon in 10 years or whatever. There's profits to be taken right now, and these people are ready to milk this cash cow dry.

you have made nothing but assumptions while I've provided you with factual reports tha indicate this is not so black or white

MrBig

sr. member

Activity: 369

Merit: 250

Quote from: DaRude on October 26, 2014, 07:12:45 PM

Quote from: ElectricMucus on October 26, 2014, 01:08:10 PM

Larger and larger mining farms are not what's increasing selling pressure. To the contrary, the larger the farm the cheaper the electricity and the cheaper the hardware to better the operating margin becomes.
A high operating margin gives miners the option to retain more of the mined Bitcoins while a low operating margin forces the miner to sell or at least get more capital by other means to pay bills.

Mining farms are in the business of mining, not risk taking on currency fluctuation. Once gain if they're so profitable in mining the logical thing is to reinvest that income and expand the profitable mining operation, not horde your inventory in hopes it goes up. Just like a gold mining, i'm assuming they sell most of their resources as soon if not before they get it, they don't speculate on price swings (much).

And once again there are 3600BTC mined EVERY day. Either by mega farms or solo miners across the glove. In both cases i think everyone agrees that MAJORITY of those BTC will end up on the market, so market needs to find a price point at which those BTC can be absorbed. Now the argument is:
1-who is more likely to sell most of mined coins, mega farms or your solo farmers?
2-And by how much? If it's by 1-2% does it really make a difference.

I think history shows that first miners were horders, and actually just did it as a hobby at a loss. So i tend to lean that mega farmers would sell more, but again how much does it matter? There will be 3600new btc today and someone will own them

I've already tried to make this same point multiple times in this thread, but it just seems to make the naysayers more stubborn. These mega-mining farms are working to devour their competition while raking in the dough. They're not delusional hodlers who are betting on BTC going to the moon in 10 years or whatever. There's profits to be taken right now, and these people are ready to milk this cash cow dry.

DaRude

legendary

Activity: 2833

Merit: 1851

In order to dump coins one must have coins

Quote from: ElectricMucus on October 26, 2014, 01:08:10 PM

Larger and larger mining farms are not what's increasing selling pressure. To the contrary, the larger the farm the cheaper the electricity and the cheaper the hardware to better the operating margin becomes.
A high operating margin gives miners the option to retain more of the mined Bitcoins while a low operating margin forces the miner to sell or at least get more capital by other means to pay bills.

Mining farms are in the business of mining, not risk taking on currency fluctuation. Once gain if they're so profitable in mining the logical thing is to reinvest that income and expand the profitable mining operation, not horde your inventory in hopes it goes up. Just like a gold mining, i'm assuming they sell most of their resources as soon if not before they get it, they don't speculate on price swings (much).

And once again there are 3600BTC mined EVERY day. Either by mega farms or solo miners across the glove. In both cases i think everyone agrees that MAJORITY of those BTC will end up on the market, so market needs to find a price point at which those BTC can be absorbed. Now the argument is:
1-who is more likely to sell most of mined coins, mega farms or your solo farmers?
2-And by how much? If it's by 1-2% does it really make a difference.

I think history shows that first miners were horders, and actually just did it as a hobby at a loss. So i tend to lean that mega farmers would sell more, but again how much does it matter? There will be 3600new btc today and someone will own them

brg444

hero member

Activity: 644

Merit: 504

Bitcoin replaces central, not commercial, banks

Quote from: stefanf on October 26, 2014, 06:21:51 PM

I believe he means that mining has become a job of a few entities (mining farms). Not exactly Satoshi's idea about decentralized peer-to-peer systems.

If you think Satoshi didn't envision mining farms then you are underestimating him

labsbitforum

member

Activity: 99

Merit: 10

Quote from: stefanf on October 26, 2014, 06:21:51 PM

I believe he means that mining has become a job of a few entities (mining farms). Not exactly Satoshi's idea about decentralized peer-to-peer systems.

yes

stefanf

newbie

Activity: 21

Merit: 0

I believe he means that mining has become a job of a few entities (mining farms). Not exactly Satoshi's idea about decentralized peer-to-peer systems.

brg444

hero member

Activity: 644

Merit: 504

Bitcoin replaces central, not commercial, banks

Quote from: labsbitforum on October 26, 2014, 03:20:29 PM

Bitcoin: A ~~Peer-to-Peer~~ Electronic Cash System

Its only a matter of time before bitcoin is replaced by something that is decentralized and peer-to-peer. Greed and lack of competent leadership are the root causes for this version 1.0 failure.

How exactly is Bitcoin not peer-to-peer?

MrBig

sr. member

Activity: 369

Merit: 250

Quote from: BlindMayorBitcorn on October 26, 2014, 03:36:07 PM

Quote from: labsbitforum on October 26, 2014, 03:20:29 PM

Bitcoin: A ~~Peer-to-Peer~~ Electronic Cash System

Its only a matter of time before bitcoin is replaced by something that is decentralized and peer-to-peer. Greed and lack of competent leadership are the root causes for this version 1.0 failure.

Gavin is very competent. A fork is in the works, remember?

I thought the lead developer was changed.

Topic: The negative impact of mining farms - page 4. (Read 10834 times)