Topic: Will mining be the death of bitcoin? (Read 1286 times)

No. If everyone agreed not to buy bitcoins with more than $1999/BTC, and if nobody cheated and bought with more than the agreement, the transaction volume will become zero.

I remember having a similar feeling about 3 years ago when the cost of mining (with a GPU) was pretty much the same as the value of the BTC it was generating. I had to make the choice whether to continue (potentially at a loss) and hope the price went up, or consider it too risky and cash out. I chose the latter and sold my GPU... but luckily not my small stash of BTC. I wish now that I had kept on mining, at least for a few more diff adjustments, because a year or so later I sold those BTC for 10 times their cost of mining. If I had waited a little longer, it would have been more like 80 times.

A 98%+ profit margin is probably a lot less likely now, and there's far more competition from people with serious resources, but still, it's something to consider.

Will uploading be the death of the internet?

Well, yes... there are already millions of Bitcoins in existence.  However, mined coins today represent a large portion of liquid coins.   As years go on, the inflation will drop; fewer and fewer coins will be mined, and so at that point you would be correct that miners would have a diminishing influence on price. 

I don't see how any of that is a problem.

"no real life need for Bitcoin"?? really ?  then you miss the whole point of decentralized currency.  sorry if you don't get it.  we do.

Some from work that I did.

Some from services I provided.

Some from exchanging fiat for bitcoins.

Some received as a gift.


True. Not a necessity.  But you stated: "there is no real life need for bitcoin except to make a profit
buying/selling."  buying and selling is not a "necessity" either.  The point is that there is a much larger bitcoin economy than just "buying and selling for a vig".

The only "necessities" in life are food and water.  Local utilities (water, natural gas, and electricity) don't yet accept bitcoin, but it is still in its infancy.  In another 10 to 20 years it is quite likely that it will be possible to pay for those necessities with bitcoin. In the meantime there are plenty of other places to use bitcoins and ways to acquire bitcoin to develop a mature economy.


Mining is plenty profitable for those with access to the most efficient equipment and the cheapest resources.  Just becuase it isn't profitable for you doesn't mean that mining isn't profitable for anybody.  If I try to set up a diamond mine (or a gold mine) in my back yard it wouldn't be profitable.  However, that doesn't mean that diamond mining and gold mining aren't profitable for the companies with access to the most efficient equipment and cheapest resources.


Bitcoin is in its infancy.  It has a long way to go.  It's a bit like trying to use the internet in the 1980's.


Of course there is.  One has nothing to do with the other.  That's like saying there is no gold with out fiat, or no diamonds without fiat.

Do you mind telling me how you acquired those bitcoins?

So you bought a few items for your pleasure, how was that a necessity?

I also believe in the idea of bitcoin, I just don't see how it can thrive going into the future when mining
isn't profitable.

I would love to see someone try to live off of bitcoins for a year. Only problem is I know it's impossible. You
can't pay your taxes with bitcoin. Shit where I live I can't buy ANYTHING with bitcoins offline.

I get I'm talking about everyones beloved child bitcoin here but lets be real for a minute. There is no bitcoin without fiat.

I disagree.

I bought an LED flatscreen TV with bitcoins from TigerDirect.
I bought a telephoto lens for my wife's Canon DSLR with bitcoins from Overstock.com.
I subscribed to the Chicago Sun-Times with bitcoins.

I know of many others that are "using" bitcoins for much more than just buying and selling for a "vig".

You are welcome to your own opinion on the matter, but it would be foolish to believe that this entire bitcoin economy could be built on nothing but speculation.  There are people who are working and earning their salary in bitcoins.  There are business that provide products and services for bitcoins.  While you may not have exposed yourself personally to more than mining and selling for a fiat profit, the bitcoin economy does not depend on or need your assistance.

This really depends on how efficient your miners are, how much you pay for electricity and your cost per GH/s for your miners. For the majority of people today, based on their likely potential buying power, and availability of miners the answer is no. The retail prices of miners are simply too high to ever be able to ROI with a miner. One of the greatest parts of returns from miners historically has been the resale of the miner as people would preorder machines, mine for a short period and then resell them for huge profits. This was likely caused, at least partially by the massive run-up in the price of BTC as the fiat value of the coins being produced were increasing, however much, if not all of these gains would be erased if you were to simply buy BTC with fiat instead of buying/pre-ordering the machines.

My point is there is so many bitcoins in circulation that miners can't control the price. They can decide not to
sell for todays rate but I fail to see how that would increase the price. Most of the price jumps were new investors buying
in to make a profit, not use the coins on a day to day basis. So essentially there is no real life need for bitcoin except to make a profit
buying/selling.

I may be wrong but I believe the majority of people that use bitcoin are just buying and selling for a vig. They don't buy bitcoins
because they need them to survive. Make sense?

bottom line is, its a competitive free market... things are always
in an ebb and flow and balance out.  Mining is never the
death of Bitcoin.

Sellers set the rates.  If everyone agreed not to sell their bitcoins for less than $2000/BTC, and if nobody cheated and sold for less than the agreement, then buyers would be forced to pay $2000/BTC if they wanted bitcoins.  This would cause the current bitcoins exchange rate to immediately become $2000/BTC.

If sellers are willing to part with what they have for less, then the exchange rate drops to whatever they are willing to sell it for.

How profitable is it to mint fiat? Remember, there's a price associated with proof over trust that cannot be discounted.

http://coincollectingenterprises.com/information/cost-to-make-a-penny

http://www.marketwatch.com/story/new-100-bill-costs-60-more-to-produce-2013-10-08

If enough miners feel the way that you do and take their mining equipment offline, then difficulty will drop.  That will make mining more profitable for those that have access to cheaper equipment, cheaper labor, and cheaper power.

Mining is VERY competitive.  It is only profitable for those with access to the most efficient equipment and resources at the most competitive prices.

If you don't have access to competitively prices resources and the most efficient equipment, then you have to decide if you want to mine at a loss as a hobby, or if you want to stop mining.

I don't think you understand, miners don't set the price fyi. Otherwise the price would be thousands per coin.

I think you got it backwards.  Miners set the rates.    They are the only ones who
create new supply! 

How is it logical to mine bitcoins at todays price profitably?

We saw a 20% increase in difficulty and its only going to get worse. Mining
consumes to much power and imo won't be worth it (even for deep pockets).

Maybe I am missing something but how people continue to mine with the price dropping and difficulty rising? I
do have a terraminer running and I'm about to take it offline, so please someone convince me its a bad idea to stop
mining.