Personally, I doubt MtGox is broke, but clearly they are having major problems probably with their banks, and they aren't forthright about things and keeping silent.
Who? Gox? Nooooo, I can't believe that!
Topic: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion - page 32301. (Read 26409569 times)
July 16, 2013, 12:45:00 PM
Who? Gox? Nooooo, I can't believe that!
July 16, 2013, 12:43:22 PM
You will get almost same return mining LTC and BTC, as they are basically pegged long term.
And with LTC I'm up against other GPU miners, not ASICs 
July 16, 2013, 12:40:26 PM
MtGox price is decoupling from Bitstamp and BTC-e again. There seems to be concern because there hasn't been a single person sighted who has actually successfully withdrawn money from MtGox since they announced the end of the hiatus. If this is true, then money hasn't been allowed to flee MtGox for at least a month. I'd consider the MtGox price distorted, and I'm not sure how long Bitstamp and BTC-e are going to follow it that much, so the price gap will probably widen more.
Personally, I doubt MtGox is broke, but clearly they are having major problems probably with their banks, and they aren't forthright about things and keeping silent.
Personally, I doubt MtGox is broke, but clearly they are having major problems probably with their banks, and they aren't forthright about things and keeping silent.
July 16, 2013, 12:34:21 PM
It sounds like mr Market's manic depressive phase is on :p
July 16, 2013, 12:32:45 PM
I've been considering building a multi-GPU mining rig, even though it'll be barely profitable but cheap second hand cards would make a difference.
That's the problem with mining. It's filled with irrational actors. If you're looking to make a profit, you'll be competing with people (like me*) who will mine even at a loss. It might have worked for a while when hardware to hash was rare but now it's out there and cheap and you can't even hope to resell it for alternate use later.
Supply and demand dictates that this means miners end up operating at marginal profits or none at all. The only wildcard is the future price of Bitcoin. If it rises as it should, it turns into a good investment for early adopters. Of course, if everyone is expecting high prices later, that increases the loss miners are willing to mine at. Miners who are operating in this zone are likely to hold since an immediate sell means immediate loss (or they may be believers in which case they are holding simply to have later. Not everyone needs to realize short-term profits on their investments).
*I do a little mining on the side as a hobby but it's insignificant.
These days attempting to do this as a serious business venture would probably be futile, it's only because the heat the cards put out is useful to me (not now, it's 27C) that it's even worth considering doing this at all.
You will get almost same return mining LTC and BTC, as they are basically pegged long term.
July 16, 2013, 12:31:09 PM
Rampion is probably correct about the problem that will be caused by ASICs. When people were frenzied to buy AM Blades at 50BTC @ $120-130 USD it was under the condition wherein 13GH would mine you 25-30-40BTC a month. But in the last few weeks difficulty has climbed so high that 13GH will mine you ~7BTC per month, and this is just discussing the problem for people who have Blades, one of the only ASICs you can buy and actually have in-hand without a 2-6 month waiting period, and only discussing the problem in the context of current difficulty, and not considering the fact that $120-130 USD is pretty much out of reach right now.
On top of that, the market has lost a lot of its buyers. These large periods of stagnation and only being able to sustain $97-98 are because Gox is no longer experiencing the "several million USD are being wired to our exchange every day!
" phenomena that it was after/during the 266-50-165 era. A lot of the money that _was_ wired to Gox is now sitting in the hands of the whales who profited from the bubbles and in Gox's rake box. After all, the only reason we're not still sitting at 60-70 is because _one_ person put down a 15kBTC market order to push it through $80. It's not because there were hundreds or thousands of people looking to buy, eating through resistance.
The dilemma with ASICs is similar to the dilemma created when lots of people buy at the top of a rush and momentum runs out and it drops hard after. Everyone wants to get out alive. It'll be worse with ASICs because people bought from frauds like BFL and Avalon who can't be fucked to actually deliver the product when it's ready because it's more profitable for them to mine on it themselves as "burn in", only delivering the miners to the people who paid for them when the ship has already sailed.
People are itchy indeed. Right now people are anxiously waiting to see if someone will market buy to carry us into $110s again. If it doesn't happen, we will definitely go down hard.
On top of that, the market has lost a lot of its buyers. These large periods of stagnation and only being able to sustain $97-98 are because Gox is no longer experiencing the "several million USD are being wired to our exchange every day!
" phenomena that it was after/during the 266-50-165 era. A lot of the money that _was_ wired to Gox is now sitting in the hands of the whales who profited from the bubbles and in Gox's rake box. After all, the only reason we're not still sitting at 60-70 is because _one_ person put down a 15kBTC market order to push it through $80. It's not because there were hundreds or thousands of people looking to buy, eating through resistance. The dilemma with ASICs is similar to the dilemma created when lots of people buy at the top of a rush and momentum runs out and it drops hard after. Everyone wants to get out alive. It'll be worse with ASICs because people bought from frauds like BFL and Avalon who can't be fucked to actually deliver the product when it's ready because it's more profitable for them to mine on it themselves as "burn in", only delivering the miners to the people who paid for them when the ship has already sailed.
People are itchy indeed. Right now people are anxiously waiting to see if someone will market buy to carry us into $110s again. If it doesn't happen, we will definitely go down hard.
July 16, 2013, 12:29:59 PM
I've been considering building a multi-GPU mining rig, even though it'll be barely profitable but cheap second hand cards would make a difference.
That's the problem with mining. It's filled with irrational actors. If you're looking to make a profit, you'll be competing with people (like me*) who will mine even at a loss. It might have worked for a while when hardware to hash was rare but now it's out there and cheap and you can't even hope to resell it for alternate use later.
Supply and demand dictates that this means miners end up operating at marginal profits or none at all. The only wildcard is the future price of Bitcoin. If it rises as it should, it turns into a good investment for early adopters. Of course, if everyone is expecting high prices later, that increases the loss miners are willing to mine at. Miners who are operating in this zone are likely to hold since an immediate sell means immediate loss (or they may be believers in which case they are holding simply to have later. Not everyone needs to realize short-term profits on their investments).
*I do a little mining on the side as a hobby but it's insignificant.
These days attempting to do this as a serious business venture would probably be futile, it's only because the heat the cards put out is useful to me (not now, it's 27C) that it's even worth considering doing this at all. The heat will be the larger part of what it pays, the LTC probably just enough to make it work at a slight profit as opposed to just being a pointlessly overcomplicated electric heater.
July 16, 2013, 12:27:25 PM
With more and more people getting involved in mining, how profitable can it be for tens of thousands of people to compete for 3600 BTC's a day?
Just running some basic numbers, it doesn't look great. The big miners have an advantage but it is becoming more and more a gamble, for all
the reasons listed (and some unknowns for sure). And the risks are being compounded with BTC's falling price.
Wow, what it must have been like to be an early miner with no competition, great returns and a dream. But that is mostly a dream now.
Personally, I see it as helping the network (whenever my 7Gh BFL arrives) and hopefully I break even then have a nice piece of Nostalgia to show my daughter when BTC is around in 10 years. Seriously, I'll run that bad boy 10 years from now to keep my tea/coffee warm!
I just think at current prices (and lower) and considering the ever increasing amount of competition, mining is turning into something different.
Further, there is the chance that manufacturers become the miners and that is a big no as far as centralization goes.
Now when and if BTC gets into the hundreds and then thousands of dollars, there will probably be another wave of ASIC's in a new fashion...
Very interesting experiment we have on our hands...
Just running some basic numbers, it doesn't look great. The big miners have an advantage but it is becoming more and more a gamble, for all
the reasons listed (and some unknowns for sure). And the risks are being compounded with BTC's falling price.
Wow, what it must have been like to be an early miner with no competition, great returns and a dream. But that is mostly a dream now.
Personally, I see it as helping the network (whenever my 7Gh BFL arrives) and hopefully I break even then have a nice piece of Nostalgia to show my daughter when BTC is around in 10 years. Seriously, I'll run that bad boy 10 years from now to keep my tea/coffee warm!
I just think at current prices (and lower) and considering the ever increasing amount of competition, mining is turning into something different.
Further, there is the chance that manufacturers become the miners and that is a big no as far as centralization goes.
Now when and if BTC gets into the hundreds and then thousands of dollars, there will probably be another wave of ASIC's in a new fashion...
Very interesting experiment we have on our hands...
July 16, 2013, 12:20:48 PM
problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.
Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years
Well, if the price gets high, it would make sense to sell to lock in profits. But if that's what people were doing, the bubble would not have been quite so crazy.
I'm sure you know the bubble started more or less when block reward halved, which was a moment when nobody had ASICs yet, 99% of the network were GPU and FPGA miners... Those already had their rigs paid off long ago (no new GPU and FPGA miners for a while because everybody was expecting ASICs since last summer), so as soon as they saw their proceeds halved they started to hold like mofos, creating scarcity of coins, which made the price to grow - the growing price attracted speculators, speculators bought driving the price high, the media started to run stories about how Bitcoin price was growing, which attracted more speculators, etc... Wash rinse and repeat, speculative bubble in its purest form.
This cycle is about to invert when ASICs will be widespread. Same thing happened in 2011 with GPUS.
You really think people took loans to buy ASICs? I bet you most asic owners are early adopters from GPU times.
I surely don't know what's the %, but I surely know there are a lot of newcomers spending all their fiat savings (tens of k's of $) in miners because they think they will break even in one month and then they will have a x10 ROI in the first year... Loan or no loan I don't know, but you can be sure they are throwing at this more money they can afford to lose because they think this is a "no brainer" and they do not want to "miss the train".
I know for sure because I've been meeting/discussing with a lot of guys like that since March, both in cyber and meatspace.
There will be a lot of pain for miners very soon, you will see.
Thanks for explaining all that and sharing your perspective on new overexcited miners. If the proportion of fiat-seeking miners, including the pro setups amounts to a significant proportion, I can agree that we'd easily average well below 100 for the rest of the year, and surely carry on that way well into 2014 until something other than SR and mining becomes significant.
OT: I'm glad I didn't hop on that one as I wouldn't have been at the front of the list. I got a small number of USB Erupters because of being able to get them straight away, and figure that the hobby will have been worth, even if it means waiting a year or two to break even. They really should be selling those for a fraction of the current price to be fair...
Better GPU mine those litecoin before they get ASICs too!
July 16, 2013, 12:15:29 PM
that doesnt mean people will start selling bitcoins asap. my mining rig didnt pay for itself and its reason i wont sell them cheap.
They will start selling bitcoins ASAP to cover their variable costs, or they will have to shut their rigs off. This already happened in 2011. Price was depressed for a long time, there were a lot of coins hitting the exchanges on a daily basis, and the hashrate actually declined because mining became unprofitable unless you had free electricity and no rent to pay for your operation. The "2011 mining gold rush" was triggered by a speculative bubble and a quickly rising BTC/USD exchange rate - history repeats itself, and the most probable outcome is that we will have the exact same situation in 2013.
To this there is an added unknown - GPU miners always counted on reselling their cards, and ASIC miners are counting on this too ATM. Most newcomers still dream about selling their $2k rig at $35k on ebay like some Avalon batch #1 owners did. But, they are deluded - this won't happen, as soon as supply and demand of ASIC miners adjust there won't be much resale potential, the only way to sell your unit will be to sell well below to market price - which will be adjusted to how many BTC the miners will generate.
I'm not speaking about the small guy buying one Klondike or BFL Single miner for his dorm room - I'm speaking about the big, professional mining operations that are being set up, and that will concentrate a big part of the hashing power.
ASICminer did very well, they didn't have the necessity to dump a lot of coins because they did the right thing in the right moment. The right moment is gone, many didn't realize that and are investing in multiple TH/s thinking they will get rich quick. Those type of guys, which in aggregate will be an important part of the hashrate, are the ones who will have no other option than to dump to at least cover their costs.
This already happened after the 2011 bubble, and I don't see why it won't happen again.
July 16, 2013, 12:05:43 PM
problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.
Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years
Well, if the price gets high, it would make sense to sell to lock in profits. But if that's what people were doing, the bubble would not have been quite so crazy.
I'm sure you know the bubble started more or less when block reward halved, which was a moment when nobody had ASICs yet, 99% of the network were GPU and FPGA miners... Those already had their rigs paid off long ago (no new GPU and FPGA miners for a while because everybody was expecting ASICs since last summer), so as soon as they saw their proceeds halved they started to hold like mofos, creating scarcity of coins, which made the price to grow - the growing price attracted speculators, speculators bought driving the price high, the media started to run stories about how Bitcoin price was growing, which attracted more speculators, etc... Wash rinse and repeat, speculative bubble in its purest form.
This cycle is about to invert when ASICs will be widespread. Same thing happened in 2011 with GPUS.
You really think people took loans to buy ASICs? I bet you most asic owners are early adopters from GPU times.
I surely don't know what's the %, but I surely know there are a lot of newcomers spending all their fiat savings (tens of k's of $) in miners because they think they will break even in one month and then they will have a x10 ROI in the first year... Loan or no loan I don't know, but you can be sure they are throwing at this more money they can afford to lose because they think this is a "no brainer" and they do not want to "miss the train".
I know for sure because I've been meeting/discussing with a lot of guys like that since March, both in cyber and meatspace.
There will be a lot of pain for miners very soon, you will see.
July 16, 2013, 12:03:10 PM
problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.
Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years
Well, if the price gets high, it would make sense to sell to lock in profits. But if that's what people were doing, the bubble would not have been quite so crazy.
I'm sure you know the bubble started more or less when block reward halved, which was a moment when nobody had ASICs yet, 99% of the network were GPU and FPGA miners... Those already had their rigs paid off long ago (no new GPU and FPGA miners for a while because everybody was expecting ASICs since last summer), so as soon as they saw their proceeds halved they started to hold like mofos, creating scarcity of coins, which made the price to grow - the growing price attracted speculators, speculators bought driving the price high, the media started to run stories about how Bitcoin price was growing, which attracted more speculators, etc... Wash rinse and repeat, speculative bubble in its purest form.
This cycle is about to invert when ASICs will be widespread. Same thing happened in 2011 with GPUS.
You really think people took loans to buy ASICs? I bet you most asic owners are early adopters from GPU times.
I surely don't know what's the %, but I surely know there are a lot of newcomers spending all their fiat savings (tens of k's of $) in miners because they think they will break even in one month and then they will have a x10 ROI in the first year... Loan or no loan I don't know, but you can be sure they are throwing at this more money they can afford to lose because they think this is a "no brainer" and they do not want to "miss the train".
I know for sure because I've been meeting/discussing with a lot of guys like that since March, both in cyber and meatspace.
There will be a lot of pain for miners very soon, you will see.
July 16, 2013, 11:57:14 AM
problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.
Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years
Well, if the price gets high, it would make sense to sell to lock in profits. But if that's what people were doing, the bubble would not have been quite so crazy.
I'm sure you know the bubble started more or less when block reward halved, which was a moment when nobody had ASICs yet, 99% of the network were GPU and FPGA miners... Those already had their rigs paid off long ago (no new GPU and FPGA miners for a while because everybody was expecting ASICs since last summer), so as soon as they saw their proceeds halved they started to hold like mofos, creating scarcity of coins, which made the price to grow - the growing price attracted speculators, speculators bought driving the price high, the media started to run stories about how Bitcoin price was growing, which attracted more speculators, etc... Wash rinse and repeat, speculative bubble in its purest form.
This cycle is about to invert when ASICs will be widespread. Same thing happened in 2011 with GPUS.
You really think people took loans to buy ASICs? I bet you most asic owners are early adopters from GPU times.
July 16, 2013, 11:55:21 AM
problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.
Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years
Most of GPU miners didn't want ROI as soon as possible, as I explained earlier - they counted on reselling their GPUs, and they were mostly hobbyist. But I'm a miner myself, I know a lot of miners, I've seen in first person who are the customers of companies like KnC and how much they are spending, and you have to understand that this last media bubble exposed Bitcoin to a lot of new and uneducated people who run profit calculators at current difficulty (without having their miners yet), they do not even understand that difficulty is growing exponentially, and at the end of the day there is a "gold rush" in which a lot of new people is entering mining because they think they will get rich quick... So we have now a) a lot of individuals investing money they cannot afford to lose on BTC miners, and as you surely know there is a "get-rich-quick" feeling on BTC - they think they will recoup their investment FAST, and this is why they are putting in this game more money they should; b) there are more and more "professional" miners that are investing money in mining with the only intention of generating profit - they will run their operations as a business. That people has to pay for huge electricity costs, renting of industrial places where they will host their operations, etc. etc. etc. A lot of fiat expenses to cover.
During the GPU era, I rarely saw a) and b) miners, most were small-time hobbyist, running their rigs in their bedrooms. During this change to ASIC, I'm seeing a lot of both a) and b). This people needs to recoup fiat ASAP.
agree
July 16, 2013, 11:50:29 AM
problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.
Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years
Well, if the price gets high, it would make sense to sell to lock in profits. But if that's what people were doing, the bubble would not have been quite so crazy.
I'm sure you know the bubble started more or less when block reward halved, which was a moment when nobody had ASICs yet, 99% of the network were GPU and FPGA miners... Those already had their rigs paid off long ago (no new GPU and FPGA miners for a while because everybody was expecting ASICs since last summer), so as soon as they saw their proceeds halved they started to hold like mofos, creating scarcity of coins, which made the price to grow - the growing price attracted speculators, speculators bought driving the price high, the media started to run stories about how Bitcoin price was growing, which attracted more speculators, etc... Wash rinse and repeat, speculative bubble in its purest form.
This cycle is about to invert when ASICs will be widespread. Same thing happened in 2011 with GPUS.
July 16, 2013, 11:46:06 AM
problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.
Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years
Most of GPU miners didn't want ROI as soon as possible, as I explained earlier - they counted on reselling their GPUs, and they were mostly hobbyist. But I'm a miner myself, I know a lot of miners, I've seen in first person who are the customers of companies like KnC and how much they are spending, and you have to understand that this last media bubble exposed Bitcoin to a lot of new and uneducated people who run profit calculators at current difficulty (without having their miners yet), they do not even understand that difficulty is growing exponentially, and at the end of the day there is a "gold rush" in which a lot of new people is entering mining because they think they will get rich quick... So we have now a) a lot of individuals investing money they cannot afford to lose on BTC miners, and as you surely know there is a "get-rich-quick" feeling on BTC - they think they will recoup their investment FAST, and this is why they are putting in this game more money they should; b) there are more and more "professional" miners that are investing money in mining with the only intention of generating profit - they will run their operations as a business. That people has to pay for huge electricity costs, renting of industrial places where they will host their operations, etc. etc. etc. A lot of fiat expenses to cover.
During the GPU era, I rarely saw a) and b) miners, most were small-time hobbyist, running their rigs in their bedrooms. During this change to ASIC, I'm seeing a lot of both a) and b). This people needs to recoup fiat ASAP.
July 16, 2013, 11:45:52 AM
problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.
Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years
Well, if the price gets high, it would make sense to sell to lock in profits. But if that's what people were doing, the bubble would not have been quite so crazy.
July 16, 2013, 11:36:38 AM
problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.
Exactly, I dont see why on this forums people seem to think that miners want to get ROI as soon as possible. I think 90% of them will just mine and hoard, for years
July 16, 2013, 11:30:22 AM
If the invested funds was taken from BTC savings they want BTC back, not FIAT.
I would have to agree with this. +1
yep, so for those people, the selling (via asic manufacturer) of the BTC has already ocurred. Next up: mining like hell without selling.
I'm not sure however, how large that group is compared to the group that wants to recover fiat.
Yep, it's true, I've been a "100% BTC" miner myself, but I'm seeing a shift in the sentiment with the ASICs. I see people wanting to recover their fiat, and only then hoarding.
problem is, allot of those miners won't get ROI for many months. Knowing this, I would expect most (except for those who took out loans) to choose to wait for higher prices before getting their fiat back.
July 16, 2013, 11:19:28 AM
Just finishing my morning coffee and checked in to see we're stuck in the same directionless dither as yesterday afternoon, but a buck lower due to that one 2k+ dump last night.
Whales, whales, please come out and play. My popcorn is getting stale.
Whales, whales, please come out and play. My popcorn is getting stale.
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