Topic: Thoughts on the future of mining? (Read 6750 times)

I'm not so sure that he'll live for +120 years from now...

The creator of Bitcoin might just create another one called Bitcoin-expansion or something, which after the main Bitcoin finished all 21 million.

i used to think bitcoins where usless because they runn out of bit coins after a while. but if there are alot of bitcoins in circulation thats fine. i think btc will succed

No more mining in future once Bitcoin and Litecoin ran out of juice, everyone is just trading..

This is the problem with technology. People not in IT field will slowly lose out...

Mining is currently exploding far past what BTC market value will support, if you intend to be a pro-miner right now then good luck. In comparison hardware prices are high, if you really want to be a miner then you have to pay that price to be one and not expect to hit a break-even. But that is at today's price. If by some miracle Bitcoin hits $500 by the end of the year, miners will be having a pretty good day with each ASIC becoming a winning lottery ticket.

Really the fact that mining hashrate has gone exponential is astounding news on its own. This means that despite the profit-loss apparently many miners are not in it for the money, and more for the cause. People are still buying rigs despite negative ROI on most of it.

Mining as an industry is still evolving and changing, with many new players in the market very soon. At some point hopefully Bitcoin's market value goes up again like it did in April, followed by a flattening curve in hashpower rate when ASICs have finally saturated the market. It will likely happen but not for some time yet, but no one really knows what the future is. Miners in a serious frame of mind are taking a very large bet on Bitcoin's dominance in the future.

I feel many views of this are very short sighted, not taking into account the long term prospects of this emerging business. One must be very vigilant in predicting possible futures in terms of hashpower, difficulty, and overall market activity in Bitcoin and in the fiat world as well.

The network is ready for a much bigger world in the end, only time will tell if all of this hashpower is justified. In a possible future world where everyone is using digital currency, a Petahash will look like nothing as we reminisce of these early days. Or Bitcoin is ultimately a failure and ASICs are expensive paperweights. Either reality is possible, to be a miner is to know this fully.

i was thinking, with manufacturers making 400gh/s units to deal with the rising difficulty, the difficulty would rise even faster. as a result those 400ghs will be like the avalons of today, struggling to get returns.

It's not really the same. We provide virtual rigs, that our customers can control. It's much more analogous to owning a rig at home, where you can increase or decrease the power, change pools and (in the future) change which coins you mine for, even change the mining software you use will be possible on our platform as it develops.

Adrian

bitcoin isn't, but mining certainly is

Random though here:

I think the main problem with bitcoin mining is that while the network needs the largest number of user possible running as high a hashrate as possible to increase the security of the network (so long no single miner has over 51% of the total network hashrate) and increase transaction speed, the way mining works it actually "punishes" the increase in number of miners. The difficulty self adjusts every 2106 (or was it 2016) blocks so that it always takes about two weeks to mine that same amount of blocks. That being said, the more miners there are, the less everyone gets. Sure, whoever has more hashing power will always get more coins, but even then if one single person has a rig which is ten, one hundred or one thousand times as much hashing power as anyone else, if there are enough miners this miner will still only be getting a small fraction of the coins mined in those 2106 blocks.
What really matters nowadays is not how much hashing power you have, but what percentage of the networks hashing power you hold, and the more miners that join in the less percentage of the total hashing power of the network you will hold.
It seems to me that it makes very little sense for the network to need more miners, and yet reward the increase in the number of miners by giving each one smaller rewards for mining.
Just a thought, though...

Well, I have never tried mining, but I've heard from others that the difficulty is going to explode!

imao btc will take longer before becoming obsolete.
btc is still in the age of social infancy, it takes time becoming accepted to the masses

we saw all other crypto panting efforts to emulate his success even if they offered some improvements, but no one succeded

So well put. I couldn't agree more.

This statement speaks to me on many levels. When I discovered Bitcoin I was too broke to really do anything with it. Then when I did start playing with it I made some money, but not nearly as much as I could have made if I just held until Spring of this year. Now I am at the point where I have studied mining from a business aspect and I just don't see it as a viable option right now. Trading is alive but the real arb opportunities are so far out of reach of those with average resources. So now I am thinking to myself...what's next? I have always dabbled in Litecoin here and there. I even made some money in it. But what is the real future of it? Where is the innovation? I ask myself AND everyone else these questions because eventually I would like to have a hand in it all. Just not sure exactly how to go about doing it yet. I want to be active in this point of the crypto movement but I am at a stand still trying to figure out what will be most profitable to me and will it ultimately push the progression of Bitcoins or alt-coins.

I want to be a player. But right now I am simply a confused enthusiast.

BitCoin may TECHNICALLY be mineable until 2140, but for all practical purposes it's got a year, maybe 2 of useful mining left in it.  By then the difficulty will be sky high and no one can predict the price.  There will be some coins left but it won't be worth the effort.

And all those ASICS everyone pissed their pants over will be USELESS!

Good rant. I think a lot of people are going through your same thought process. Bitcoin is in an intermediate phase. New users on the scene are not exactly early adopters, but it's still not yet mainstream.

I like what Bitpay is doing. They are the Bitcoin pioneers. Creative entrepreneurs are the people who are capitalizing on the big opportunity. Mining is certainly a real business, but it's not like it was in the beginning. There may be a mixed message about what opportunities really exist in the Bitcoin business eco-system for new participants?

I just worry that maybe as mining centralizes so early on, with so many coins left to be mined, dissent in the community could stifle growth. Anyways, I think there's a lot of utility for Bitcoin as it is, and that it can even grow without new innovations to propel it further.

Profitable mining companies should think about taking some of the profits they earn from bootstrapping the Bitcoin network, and funneling them into other businesses that are bootstrapping Bitcoin further in different ways.

A ton of this conversation is conjecture based on the 'fact' that 1 BTC = ~ 120 USD.  Less than a year ago, it was a 'fact' that 1 BTC = ~ 10 USD.

I am seeing the BTC to USD conversion rate jumping over 130 USD now.  Who is to say in December that it won't be a 'fact' that 1 BTC = ~ 500 USD.  Then all of those people who were like 'BTC is dead, stupid groupies jumping on the bandwagon buying overpriced asic mining equipment with the difficulty where it is at now are so stupid and make me so mad.' could kindly take back all of their bitching.

There is also a chance that BTC could tank due to regulation or something.  Personally, to me it is so hard to get in on the game (and pretty unfair...  its too hard to get into the mining game anymore, with people who were GPU mining and built up a thousand or more BTC, which then jumped to being worth like 100k - they are the ones who have the dough to buy a 10k avalon or a 30k minirig).  But someone like myself, kind of like the next generation of enthusiast - I am getting to the point where I'm growing uninterested in BTC.  I'd rather put my efforts into LTC or other cryptos.  But to say there is only room for one crypto is just naive...  BTC is the first generation of crypto... Its only the beginning for this shit.

I guess I would really like to see the BTC hoarders making BTC more available to the masses.  BTC could easily die (due to the inevitable inflation which will eventually squash the value...  it may jump to 500 in December, but its definately not going to stay up there...  There arent enough in circulation, and it is at this point simply too dificult to obtain BTC for anyone outside of enthusiasts with time to spend on it.

Bleah, just a rant....

What's better model, cloudhashing leases of bonds?

Byteminr looks like a cloudhashing clone.  You even use KNC miner as well.

This is exactly why we've started https://www.byteminr.com.

Now that CPU and GPU mining over for most people, we want to make sure many people can still take part in bitcoin mining to keep the network diversified. Our intention is provide access to the cheapest power we can (within reason) and best generation hardware so that mining can remain viable for the masses and not just the large investors who are currently putting in many Mil $USD into major infrastructure for mining to try to control the supply of new coins. The network needs diversity.

If you do your homework on the latest mining technologies and make sure you're buying the latest model, you can still make a good return on your investment.  We're just right in the middle of a technology leap.  I also think that mining is kind of fun, so I'll do it regardless.  Just looking for a way to get free electricity at the moment.

I would expect that in 6-12 months or so, once asics are being made at the current limit for microprocessor chip size (22nm?), there will be a leveling of the playing field and everyone will be able to get their hands on the same rigs that the big operations are using.  That may happen sooner because I don't think the generic chip manufacturers overseas are able to go much smaller than 28nm.  If you invest in a 28nm ASIC, you're probably going to do OK...assuming you don't buy it from Butterfly Labs.

Does anyone know what percentage of mining rewards the "processing fees" currently make up on average?  

I have a feeling that the mining manufactures (the people building the shovels) have a very good handle on what's going on in the market and will continue to sell products that make ROI in a reasonable timeframe for a reasonable amount of money.  Now reasonable is relative.  I started mining a couple of years ago, collected a bunch of coins and stopped.  Early this year I took about 1/4 of what I mined and bought hardware.  So, 2 years ago when the coins were at $10 I was happy to use GPUs - today at $120 I'm happy to buy ASICS.  My point being that I'd spend $300 on GPUs when BTC was $10 but now at $100 per coin, I'm happy to spend $3000.  OH, but wait, this isn't fiat money that I'm "spending" it's bitcoin so it's physiologically easier for me because I'm only spending 30 BTC.

Is mining dead?  NO - but it's quickly growing out of reach of a majority of hobbyist miners.

Personally - I plan to mine as long as possible, ROI or not - somebody needs to help keep the network health an diversified.

Good point. My thinking has been tainted with a "once Bitcoin starts really blowing up and going mainstream really fast, what might happen is...", and I forget to just looks at the facts.

Litecoin and all the other alts (not incl. Ripples) have a market cap ~5% that of Bitcoin. That seems higher than it used to be? My suspicion as I look down this list http://coinmarketcap.com/ and notice a lot of newcoins with decent market caps, is that the prices for the coins are probably not very real or stable prices. When there is a selloff of one coin, it could domino effect and everyone could realize their coins are worthless, and millions of "dollars worth" of coins could evaporate. Are all these coins clustered in the 50k to 200k range really worth THAT much!?

I believe we are seeing Bitcoin's utility increasing gradually as the coin supply goes out. When reward halves again there will already be 16 million coins out, and hopefully Bitcoin will be much further along and much more useful, and there will be no need to bootstrap another similar system. 2016 will certainly be a year of reckoning in Bitcoin. I think it would be nice to have schemes where the community can continue to profit from newly minted coins through investing in large rigs. 

Absolutely.. you have to be careful where you invest on these things with the way they are shipping tthem.. I have only invest like $300 on my chips and I may never see that money again due to the way they have been holding back on chips vs the difficulty raising... I'll let you guys know if things work out!

Regards

Yes, Im aware of that.

I was saying that if   last year you invested lets say $2,000, you would of have made your ROI back and profits on top of that by now.

Now if You invest $2,000 you will NEVER make your profit back now. Therefore the mountain being empty to become profitable.


I purchase an Old Gold mine 2 years ago here in Arizona, it still has Gold but its not profitable to invest 10,000 to be able to mine it.   
 --- But I do go in their once in a while with some dynamite, I have so far only found a little bit, its verily covers the cost of the tnt. But its fun to blow shit up...

Why would a bunch of miners going to alt-coins make them valuable?  Bitcoin has already been bootstrapped, there is no need to provide a free lunch anymore to get people to use it.

Small miners will be marginalized more. You will see the 'prosumer' mining at around 2 TH/S sometime next year. All those folks with sub TH/S systems will start to disappear.

You will see bigger crews mining at 200 + TH/S. Maybe 20 PH/S total hashing by the end of next year?

The "mountain" isn't estimated to be empty until the year 2140 or 21 Million BTC has been mined... i still see mining as an option.

I am one of those hoping to get our Avalon chips so we can burn to our homemade and K16 boards... keeping the initial costs down to help return "ROI" which for me is all about stacking as much BTC as I can..

If Avalon does not ship and companies that develop next gen ASICs do not allow the open source community to work from their specs.. then yes we may never be able to mine again and the greed of a few will continue to hammer the "mountain"

http://www.cnet.com/1990-11136_1-6278387-1.html

   #4

There's certainly ideology to Bitcoin. And there's an almost conflicting ideology to any new currencies that grow out of Bitcoin. I think the fusion of classical economics with modern technology with Bitcoin is interesting. It's like we are going back to old principles that may have finally been made good again. Creating new currencies based on Bitcoin is more of a neo-classical economics concept. We can create more and more currencies, but what are we really trying to do? Print money to stimulate our wallets?

Bitcoin is an experiment in economic theory, and its almost like in the long run its survival depends as much on its academic merit as its technological relevance. It kinda sucks how so many people in the Bitcoin space resort to building entirely independent systems. This may not have been the case if early adopters were more generous with their coins. For example, if Satoshi has 1m coins in a wallet, why doesn't he award 100BTC per month to 'the most innovative new idea/s'? The inflow of new capital will need to increase for a long time, or things may collapse inward. Bitcoin needs better marketing and tech ideas.

Well, sure, I agree with your last statement... but right now there are too many enthusiasts, hobbyists, people with too much money to spend and lack of knowledge/ignorance about the impact of the rising difficulty levels.  Maybe in a few months an ASIC might be worth buying.

ed:  similar to my dart throwing at nasdaq back in the late 90s, then losing 30% of my assets over the course of a week.  i guess some people had it worse,  those that stuck it out until it finally stopped bleeding in 3q of 2002.

'Nothing important has ever been built without irrational exuberance'

I was thinking that despite changes in the mining economy, Bitcoin can continue to engage members of the community with profitable and/or innovative investment opportunities relating to mining and mining companies. With mining out of the scope of the people's interest, Bitcoin would rely solely on it's application as a payment rail and store of value. As I come full circle I start to think that Bitcoin itself is just the beginning of a money revolution. Regardless, I definitely think a lot of money can be made mining with ASICs, it's just about getting a good price on hardware, and a good price on your bitcoins.

The future of Bitcoin is in taking fiat (USD, EUR, JPY, RMB, ...) out of the loop. This can be future for Litecoin too. But I feel that in Litecoin comunity the opinion: "Litecoins are just a means to get rich(er) in fiat" is more prevalent than in Bitcoin comunity.

Litecoins appear to be useless except for their value in bitcoins.  The amount they can be cashed out for is tied to their value in bitcoins (bots on btc-e and wherever else do a really good job at this)...  though it's beyond me who would actually place 'buy' orders for litecoins, let alone all the other crap that is listed on places like vircurex.

I never would have gotten into bitcoins if I hadn't been able to participate in the mining process when I first heard about them (march 11 or so?).  I suspect I'll gradually lose interest, maybe checking in once a month or something half a year from now.

I'm not a hobbyist (or ignorant), so I'm not going to waste my money on ASICs that won't turn a profit...

Yeah, fiat currency like USD, EUR, CAD, RMB, etc..

So you are operating somewhat outside of the Bitcoin economy. This is what I was getting at in my original post. The more people 'switch to LTC' in general, could mean more of a threat to Bitcoin, and consequentially the entire current cryptocurrency eco-system. I'm a hopeful yet paranoid. I do think LTC and BTC inter-operate nicely because they are the same tech with a similar community, etc.

I trade my LTC for US Dollars.  I'm holding the LTC I have now to see if the price rises and I get MORE US Dollars for my LTC!  I am not concerned about the BTC / USD ratio.

What do you mean by fiat?  Fiat = USD?

I hear that. But do you sell your LTC for BTC and use BTC, or do you sell you LTC for fiat and use fiat, or are you finding uses for LTC? What's the point of BTC for a dude like you? Are you holding because you think LTC is on the rise?

I should have mentioned it before, but I mine LiteCoin.  The BitCoin ship sailed when the ASICs started showing up in people's mailboxes.

I'm wondering how the issue of average users no longer being able to mine profitably will affect growth, and whether this presents a significant threat to Bitcoin. I don't know what the future looks like.

One thing to consider is how there are already at least 11m+ coins "in circulation". So, if Bitcoin is going to continue to grow, it's not really about mining at all anymore. I'm just wondering if the community can ever truly decide to fork Bitcoin. Will we ever see a Bitcoin 2 with a market cap larger than Bitcoin 1. Thinking about it more, unless a "big fork" like this was a factor of massive growth and more clones were truly needed for a logistical reason, then it would probably just decimate the crypto eco-system. I think Bitcoin has more than just a first-mover advantage. It has an existential grip on this whole class of technology at this point.

I'm sorry, but your confusing me.  First your worried about Bitcoin future then you saying the future looks great.  Have you changed your outlook since you started this thread?

I think Bitcoin future looks great as the increase in difficulty and the rise in Bitcoin price seem to be coinciding quite nicely.
Sam

What we really have is question about Bitcoin price. If the price continued to rise like the good old days, then everybody mining with decent equipment would be making a great ROI. A stagnant or dropping price presents a problem. Increases in adoption rates spark the price, and pay off the miners. In a direct way, a miner is self-interested in seeing adoption rates rise.

You may not have spent money on mining to "help others", but the point is that if you are mining coins today, you want them to be worth more tomorrow. Indeed it may not even be possible to turn a profit unless Bitcoin prices rises.

I'm betting that those who make the money in the future will be those who have their interests well balanced between mining, and the marketing and development of new products and services. Without question, miners and early adopters should be funding Bitcoin startups en masse.

Thanks for letting us know.  I completely missed that memo.

its simple,

Mining it self its DEAD!

You could mine other coins, but they aren't worth that much.

Bitcoin is dead, its takes allot of power to get a single BTC.

Yes you could get New Gen ASIC that will give 50+Ghps, but even so that will take you a year to get your ROI back.

The only people making money here NOW is companies selling ASIC Miners to newbie who are thinking that if they invest  $500, $2,000, $10,000 or more they could get their money back in half a year or even in a year.

But if you calculate how much those    ASIC are + power consumption + time/date when will you get the ASIC unit.


Yes its was great for those in the beginning when it was easier to mine.


So if you just join the Bitcoin Rush, its to late, that mountain is empty....

Isn't that the whole point of mining coins?  To make a personal profit?  I didn't spend about $1000 on mining PCs and GPUs to help OTHER people, I can guarantee you that!

Difficulty is rising sharply as price stagnates, so I can't help but worry that as small-time miners are squeezed out of the game there will be more and more opportunities for other alt-coins/payment systems to steal Bitcoin's market share. I say this because I have always felt that a driving force of the Bitcoin economy was the fact that a large subset of users were profiting from mining, and when and if this opportunity erodes for the casual bitcoiner, the entire economy will be put at risk by the threat of new systems offering better incentives (or at least the chance of an incentive). Is Bitcoin still fine just as it is?