Ok so theoretically, won't we reach a point where so many people have ASICs that they will generate fewer in BTC than they consume in electricity? Won't we reach a parity of sorts at which point people become unmotivated to mine in any way? This would be just like what has happened with the GPUs and FPGAs, but without a possible improvement of mining technology.
Obviously, should they become worth 1000$ each then it remains worth it for longer.
I sort of imagine a future where bitcoin mining is done philanthropically by those who can afford to, in order to keep money honest, but not as something you are materially rewarded for. Maybe even by a *shudder* elected body.
Nothing new. Mining will always be marginally profitable in the long run. There is money to be made there: the mathematically certain block reward, plus the fees which are the "soft" variable (in future, payment processors (miners) might be competing for contracts to process our transactions).
In the short term, there may be periods of mining at a loss due to either decrease in btc value, or influx of new miners, or both. Some will drop out, thus making it profitable again for the stubborn ones. The important thing is to plan so you can absorb occasional dry spells without having to drop out.
And as for the "elected bodies" - sure, why not? If bitcoins ever become a reserve currency, mining will become too important to be left to amateurs. The same goes for big corporations - if bitcoins become big for them, they will need to make sure block chain remains healthy.
I think the problem is that the ASIC arms race is starting to look like, dare I say, a ponzi scheme.
To state my group's investment, we have roughly $4k tied up in trading, $2k in investments (AM shares, Havelock, BTCT), $5000 in current hardware (remaining GPUs on LTC, small usb farm on BTC), and a few hundred in each of KNC Jupiter shares (they sounded like a good idea at the time) and in Coinado/Lucko for their custom BFL chip and hardware work. So we're invested in this industry and have roughly $4-6k available to lay down on new hardware, literally sitting in the bank, waiting to make a purchase. So we're not folks with a single block erupter complaining about ROI because we paid 1.05 BTC, we've got some cash in this like everyone else.
The requirement to stay involved is to continually purchase more expensive equipment which we do via direct purchase, resale, or buying shares in a larger block purchase. The equipment people are laying money down for now is not guaranteed to return investment, simply too many players putting hardware online in the next four months. So in theory, most of the hardware purchased in the September-November generation has a good chance of
never returning the initial investment, let alone providing profit to help pay for v3 Asic hardware. The folks making money are the hardware vendors, the resellers, and anyone selling shares of anything because any IPO becomes a pump & dump (with folks currently in-the-btc having the largest advantage) and anyone selling shares on hardware is basically asking you to roll the dice.
What we are also seeing is companies like Alydian pop up with enterprise-grade mining options. The problem - these must be paid for in cash, meaning the end result of anyone mining them is to need to continually sell at an ideally high price to return the investment, meaning that the relative periods we see of inactivity on the exchanges are possibly going to be replaced with lots of folks dumping coin, meaning the price is likely to go down. Good for traders, bad for people calculating ROI on BTC = ~$100USD. This is how sharky investors work, strike to get rich, leave a wasteland behind them.
Otherwise, hardware is now being priced out of the range of the "normal" user. If you've been around long enough you likely either have the investment already or the BTC on hand to bet on new vendors, but for the average person coming into BTC today there is a ton of hardware on eBay/Amazon, more than half a dozen vendors promising similar delivery estimates, no certainty as to how high the hashrate will increase by 2014 along with no certainty of the price remaining at today's levels to provide actual ROI, and users of current gen technology complaining about every current vendor (AM fleeces on price because they have available hardware, BFL is a clusterfuck, Avalon has pissed off almost everyone after batches 1/2). There is no good news in the land of BTC, only an arms race that most people can't even get into.
So I'm very curious to hear some senior/hero member input on what the value prop is behind BTC moving into 2014. Purchase BTC direct and there is no certainty of return (like any stock/security), pay for hardware and it will likely not pay itself off (mutually assured destruction by the vendors), otherwise there appear to be very few success stories in BTC these days. On top of that, mass adoption is not happening, BTC is not spreading, and the regulatory market is quickly catching up so everyone who has gotten a free ride on trading/investing/dumping mining profits is likely going to be facing tax repercussions in the next 1/2 years as more governments figure out how to trace the outputs of BTC and tax folks appropriately.
At the end of the day, it seems like the only people making any money are early adopters and people selling shovels/running pools, which is a truly sad state of affairs. Come on, someone make this stuff exciting again and not depressing for the new folks. Give us a reason to believe despite all the negative evidence, elders of the community.
