Topic: Warning to the bulls... - page 2. (Read 8219 times)

Silver taking a beating again today.  C'mon over to the Bitcoin side!

That's not what i'm seing.
The BC economy is much smaller than the action on the exchanges.
So the actual influence of the economy will be smaller and basicly bitcoin is played by speculators.
And miners, which produce bitcoin.
The economy just tags along. They had to deal with sub-1 prices, they had to deal with 30+ prices and then back to 2 and now 5 again.
That price is not driven by the sales of goos or services for bitcoin. It's way too unpredictable for that.
If you see a rally on the exchanges it is not because people spend bitcoin in shops. It is purely people speculating or dumping their mined coins. Those are the real factors in the price.
I have been unable to find back the effects of the 'economy' (goods/services) on bitcoin pricing.
But sentiment and speculation trends are easy to find.
So, in fact, bitcoin has been supported by wishes and dreams all along.

I'm pro-technology, and I think this is an appropriate place to point out that life-extension technology (not limited to, but definitely including plastic surgery) is getting better and better, such that we are seeing hotter and hotter cougars.  Maybe someday soon the economy will be largely driven by womens' sex drives.

What has rationality to do with economy? If everyone would act strictly "rational", the economy would spiral down because almost all of the economy is driven by men's sex drive. So what rationality do you think will win out at the end? The rationality of Diogenes?

These are valid points.  However, There is plenty of work involved in maintaining and to a lesser extent operating mining rigs/farms as pointed out by Crypt-Current. But, to expect people to mine for zero profit out of the kindness of their hearts, so others with zero costs can send a tx at THIS early stage in the project just dumbfounds me. Don't get me wrong, I mined for 6 weeks at a loss because it's what I do, and I don't have a problem with the small loss. I make far more from trading anyway. The same mindset would be the example of the business that relies on their own mining efforts to send and receive tx. Most others right now aren't so generous though.

Difficulty is what balances the profits. When price rises, difficulty is sure to follow. So, profits are driven down. When profit drops below comfort level, miners will start to drop out.
If they continue to make a small profit, the difficulty will remain high enough to keep massive profits in check, while still being worth the time to mine.

I'm not trying to troll you. I have just read so many posts of "Miners shouldn't make any money".  It's kind of aggravating, and I am done now.
BTT 

You have a point actually. Do we really need network administrators for a network that will administer itself? Do we need experts in network security, when the network has it's own self-adaptive defense mechanisms? Networks in the future will have brains and immune systems of their own. They will not need our inefficient help, other than for unskilled manual labour - which may itself not even be required in time. The singularity is near...

Is network administration overvalued?  How about network security?  By your logic, these professions should not be profitable and perhaps not compensated monetarily?

Computer and telecom systems are often outsourced, and I see outsourcing of bitcoin mining farms (hell maybe even have them in house) in the future.  Hopefully powered by wind, solar, or bio-diesel generators.

This, for sure.  IMO most of the people that poo-poo mining profits don't really understand how much of an undertaking it really is, if you want to stay competitive.  Plus, it's a neat hobby for those so inclined to maintaining computer hardware for specialty purposes, and it's REALLY damn neat and fun and exciting because the miner supports a necessary function, which really literally has the potential to change the entire world's monetary base, and even the potential to change the way the world views money and economy.  But I'm sure you've heard all THAT before...  

Fact of the matter is, I *LOVE* playing with comp hardware, and some people don't.  Getting it to all work together efficiently is part art, part science, and that is the type of WORK that certain people gravitate to.  It takes substantial WORK, above and beyond the raw resources (hardware, power) to efficiently mine btc and a profit is deserved for that work.

The incentive is to ensure that the transactions you send to others and perhaps more importantly, those you are receiving, are processed quickly, correctly, and efficiently. That is the only incentive required in my view. In the future, most of the mining will be done by those with the greatest vested interest in the system itself - i.e those with profitable businesses that require the bitcoin system to function efficiently as a means of payment.

They won't care about mining at break-even, or even at a loss, when they are making plenty of profit from their individual bitcoin enterprises. Do you think banks and huge corporations require their computer and telecommunication systems to have zero depreciation, or indeed appreciation? They count these expenses as operating costs, and bitcoin mining will be no different. It is a cost of doing business, and it will be minimized like every other expense.

Inefficient miners will probably be priced out to the point where even the most efficient miners will be operating at levels barely above break-even. They might even eventually require subsidy from the bitcoin economy to pay for upkeep of the infrastructure, and since most individuals are profit hungry, their work will likely end up being done by those businesses themselves for a fraction of the cost. That is the only way to ensure mining is done as efficiently as is possible.


No I wouldn't. But if traveling there and back was the only work I actually had to do, and if I had no other obligations, I may just go along for the ride. If I liked driving enough, I'd be more than willing for someone else to pay for my pastime. I might even net a few bucks if I could find a gas station selling cheap fuel. At least until I realized what a waste of resources the whole venture was, and started to feel a bit guilty about the environment.

I just don't get why people think there should be zero profit for mining. I agree it shouldn't be a huge profit, but break-even mining removes the incentive to secure the network. Would you (or anyone else for that matter) work to only be able to pay for the gas used to get you there? What would be the point?

Unless I'm mistaken, 7 weeks of of continuous upwards movement is the longest rally, if not the largest in terms of price, I have seen to date.

There's a long way to go and we'll make it to $10 before April, and if you want to oppose that trend and wait for the crash, you, sir, will be waiting for a long time indeed.  Sure, there will be a major correction... but this rally is going to continue for a while.

You should take a look at historical bitcoin charts.  When the price moves in a trend, it does so for a LONG time.

My surfboard is in the shop. It's getting a reality check.
Don't worry, I'll be on your side again soon... when the price is right.

c'mon now mj; thats what you advised yourself at 4.3 and now look where they are.  trying to play the small waves are just about impossible so why not get in now and ride the longer term wave up?

My bitcoins are tied up in other investments.  I'm earning about 1% a day on them in diverse portfolio of stocks, loans, and a trading bot...  As long as they don't drop that much daily I'm not selling.

I don't want them for $5. I want them for quite a bit less actually.

The fact that you are making profit from mining at all underlines another fact - that the price is currently overvalued.
I'm not you, but if I were, I would take my profits now and buy back later when the euphoria has worn off.


True, and that is exactly why the price is so easy to manipulate right now. But rationality always wins out in the end.

it would be true if all bitcoins ever mined and being mined went straight to market.  out of +8M bitcoins in existence how many sees the market? a very small fraction at best in relativity small periods of time

You can't have my mining profits for $5.

* shrug *  looks like bids & asks are both increasing?  correct me if i'm wrong; i'm no chart expert