One Bitcoin By the Numbers: Is There Still Profit To Be Made? 239
massivepanic writes with an article that "runs through the logistics of mining a Bitcoin on everyday gaming computers while keeping an eye on power consumption, time spent, and return on investment. From the article: 'I have mined a Bitcoin. This was not much of an accomplishment a year or two ago, but in 2013, after the infamous early-April peak at $260, unearthing a Bitcoin is no easy task. Competition is on the rise and we are getting close to the end of the good ol' days of Bitcoin; the time when a desktop computer or two have any real mining capabilities.'"
Comment removed (Score:4, Insightful)
Re:Remember the old adage (Score:5, Interesting)
And remember another old adage: "There's a sucker born every minute." Want to get some ROI? Don't mine bitcoin, sell bitcoin mining rigs. Like selling shovels and booze to miners in a gold rush, it's a great way to make sure you get the cash now, and leave someone else scrabbling in the dirt with all the risk that tomorrow's newer custom FPGA rigs and market prices will make today's mega mining cluster not worth the electricity to switch on.
Re:Remember the old adage (Score:5, Insightful)
As long as you know when to get out. Otherwise, you'd be just like the miner - left with a lot of spare equipment of no value. Inventory isn't free.
Re: (Score:3)
Aren't Bitcoin mining rigs regular FPGA rigs configured for that specific task? Reset the hardware/software and you can sell it as regular FPGA to any number of people, it's nothing custom-made for mining Bitcoins.
Re: (Score:2)
It's hard to make a general-purpose fpga board cost-efficient for bitcoin mining. And with ASIC mining solutions now surfacing, it's also going the way of the GPU, just as that obsoleted the CPU.
Re: (Score:3)
It's hard to make a general-purpose fpga board cost-efficient for bitcoin mining.
Possibly you missed the adage: "There's a sucker born every minute."
Re:Remember the old adage (Score:5, Informative)
Bitcoin mining is starting to move towards ASICs now.
But ignoring that even with FPGA while the FPGAs themselves are standard parts the boards usually aren't. Afaict most off the shelf boards for FPGAs fall into one of two categroies. Either they are PCIe/PXIe cards designed to move a lot of data over a bus system or they are hardware dev boards with loads of different interfaces for a developer to play with. Bitcoin mining needs neither of those, it just needs power and a way to get a tiny ammount of data in and out. The result is an off the shelf FPGA board is a poor value proposition for mining and a mining optimised FPGA board isn't much use for anything else.
I guess you could desolder the FPGAs from your no longer viable FPGA boards and then reball them and try and sell them but I think you'd find it pretty hard to find a buyer for such parts (afaict reballing voids the warranty) and if you did find one you'd have to sell them at a massive discount to fresh FPGAs from the manufacturer.
Re:Remember the old adage (Score:5, Insightful)
Bitcoin appears very strongly to have been designed so that the inventors and early adopters got the most money for free, the late adopters have a difficult time getting the money out of it, and may even be spending money to try to get some faster. At least with a real gold mine there was actual work and sweat required even by the first miners and they never lied and said they were doing this for the good of others or to try and create an alternative system.
Re: (Score:3)
"I'll trade you some of these pretty rocks I effortlessly found in a stream for that saber-tooth tiger skin."
"Screw that. I'll just go down to the stream myself."
... a few hours later ...
"Screw that; looks like you found all the obvious sparklies. See this big spiky club I just whacked a saber-tooth tiger with? How about you give me your sparkly rocks in trade for keeping your skull in one piece?"
Re:Remember the old adage (Score:5, Funny)
It's called a Ponzai scheme.
Which is sort of like a Ponzi scheme, but groomed very carefully over many years to be much smaller.
Re: (Score:2)
But bitcoin is extremely wasteful. At least with real coins the metals are still useful.
Re:Remember the old adage (Score:5, Funny)
But bitcoin is extremely wasteful. At least with real coins the metals are still useful.
Bitcoin bits are infinity reusable. You could reuse those bits to make a picture, song, movie, spreadsheet, game, encryption key, etc.
US Currency on soft rolls of paper (Score:3)
I imagine US currency coming in nice $100 "soft rolls of paper". Least that way you know your money is always worth a ... well you get the picture.
Re: (Score:3)
“Paper money eventually returns to its intrinsic value – zero.” (Voltaire, 1694-1778)
Re: (Score:3)
Which is why magic random bit sequences, with their loads of intrinsic value, are so much better!
Re:US Currency on soft rolls of paper (Score:4, Interesting)
I am an advocate of fiat money, but that is because I fear deflation more than inflation. (Well, my view is a bit more complex then that.)
As for what you are saying, “years” is not the right answer. We have been in a finical crisis for the past few years, and those tend to be deflationary. The reason why we have not seen major deflation is because Central Banks have been pumping money.
As for modern systems, there is a tension between independent Central Bankers who fear inflation verse politicians who like easy money. I can point to issues in recent years, but not in big mature countries.
What I fear (though less than inflation) is a repeat of the 1950s and financial repression. Back then the governments had a lot of debt (from WWII), like today. They rigged the bond market so interest rates were low in relationship to government debt, thus inflating the debt away (This does not require high inflation, just the relationship).
Bill Gross of Pimco has done some great blogs on this issue.
Re:US Currency on soft rolls of paper (Score:5, Interesting)
I am an advocate of fiat money, but that is because I fear deflation more than inflation. (Well, my view is a bit more complex then that.)
Most economists would agree with you on that (not sure if that in geek circles is taken as a compliment or not, but given as one, we tend to be far too dismissive of other expertise than our own)
As for what you are saying, “years” is not the right answer. We have been in a finical crisis for the past few years, and those tend to be deflationary. The reason why we have not seen major deflation is because Central Banks have been pumping money.
As for modern systems, there is a tension between independent Central Bankers who fear inflation verse politicians who like easy money. I can point to issues in recent years, but not in big mature countries.
Indeed. And this tension is holding the balance. These are much more complex systems than most imagine, and we have developed a set of checks and balances that work. Soundbites about "feds printing money" doesn't really mean anything if you don't understand the model. And your point about the issues not being in big mature countries is my point as well. On the other hand bitocoins that some see as a better alternative loose 2/3rds of value overnight. You have you to be really idealistically theoretically motivated to compare that as equal or better.
Thanks for blog references, will read, actually interested in the various sides of this topic.
Re: (Score:2)
Here is the link to his blog on Financial Repression. If is from 2011 but I think it is still valid.
FYI, he co-founded PIMCO, one of the world’s largest bond fund managers. I think he is very good. I also like his New Normal one.
http://www.pimco.com/EN/insights/pages/buycheapbondswithsafespread.aspx [pimco.com]
Whoosh! (Score:2)
Works on both ends. You could also use it to wipe the yolk/joke off your face.
Re:Remember the old adage (Score:5, Funny)
A bitcoin may cost more in electricity than the bitcoin is worth, but hell we can make up for it with volume!
Re: (Score:3, Insightful)
In college dorms, electricity is "free".
Re: (Score:2)
Electricity, like information, wants to be free.
Re: (Score:3)
If you like get-rich-quick schemes that involve robbing utilities in bad neighborhoods, you could also consider calling in fake water leaks and downed power lines, then carjacking the utility repair crews at gunpoint when they show up. On the other hand, you could consider not trying to get rich quick off of antisocial douchebaggery.
Re: (Score:2)
Probably not – or at least not for long. ROI is a ratio, Return Over Investment - or the percent return on your investment regardless of what the exact amount of the investment is. It allows somebody to compare a small project vs. a big project.
Your ROI would get greater as long as you have economies of scale – that is, the more money you spend the more efficient of a computer setup you get. I am going to make the assumption that pretty quickly you are going to hit the economies of scale (I do
other ways (Score:2)
Re: (Score:3)
Plenty of letters left in the alphabet - Captain Jean-Luc Picard
Re: (Score:2)
A bunch of alt-coins are already out there
This is precisely what makes Bitcoin worthless.
As soon as mining becomes too difficult, all the miners/speculators will shift to the Next Big Thing (all hoping to get in at the top level).
The miners/speculators are what gives Bitcoin its value. That value will come crashing down when they leave.
Re: (Score:3)
Bitcoin is the first technology to make money transfer without trusted third party possible and will possibly remain an only one for a long time.
Really? Back in my day, we used this technology:
https://en.wikipedia.org/wiki/Paper_money [wikipedia.org]
Re: (Score:2, Insightful)
Involves a trusted third party. The one who prints the money.
Re: (Score:2)
Re: (Score:3)
If you'll take bitcoin from me without a trusted 3rd party to verify it, I have an infinite supply of bitcoins for you.
You clearly don't understand how bitcoin works.
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
there doesnt seem to be much more information out there
There are literally hundreds of scholarly articles, most of which can be downloaded from their authors' websites.
doesn't seem to me like it was decentralized any way or didnt need trusted third party
Numerous systems with "offline" payments -- i.e. where transfers of money did not require a third party -- have been presented, including several with rigorous security proofs. Many of those systems have the property that the issuer of the money cannot blacklist honest parties i.e. even though a central authority is used to identify people who double spend, that party does not have the power
Bitcoin is dead... (Score:5, Funny)
Bitcoin is a scam, and is never going to go anywhere. After all, you can't pay your taxes with it.
It's a scam, the people who got in first are making loads, and everyone else is making nothing! Just like a pyramid scheme.
And it's not worth mining, because of ASICs etc.
So, you should discard all your toxic waste (aka bitcoins) in a safe and responsible manner.
Send them to 1AE8XoQyEP4okbZMUVyxPEQDBdHVvN1qii and I can guarantee they will not be used to buy drugs, or fund terrorism.
Re: (Score:2)
After all, you can't pay your taxes with it.
But you can buy tulip bulbs and Beanie Babies!
Re: (Score:2)
You can buy gold with it, then sell the gold and pay your taxes on the profit.
So you can pay taxes with and on bitcoin, you just have to buy and sell the right items.
Here's a tip (Score:3)
Nothing you post on a web forum is worth any money.
Re: (Score:3)
Please help! My friend is a Prince and he needs to hide a lot of money quickly! We were planning on using your Bitcoin account, but I tried www.1AE8XoQyEP4okbZMUVyxPEQDBdHVvN1qii.com and it didn't work! Something about HOSTS FILES NOT FOUND or some other crap. I also got an APK ERROR on top of that!
Re: (Score:2)
Please accept my apologies.
Please use this link to send your coins [bitcoin].
Re: (Score:2)
Heh. I'm reading a spot of fiction/fantasy where a massive economic collapse has happened, and the Government is worrying about taxing all the barter/trade going on. Cell minutes become a currency in a heartbeat. When talking about taxing individuals, one Smart Person mentions "how do you compute 10% of a chicken? Do we just mail them 10% of it when we butcher it for dinner? The IRS is gonna be getting a lot of packages full of rotting chicken guts...."
Re: (Score:2)
Those things have value, beyond just perceived value. You can eat a chicken or the eggs it produces, you can use a flint axe to craft things, etc. Even gold which superficially appears to have no intrinsic value required much work and effort to obtain initially, plus it looks nice. Unlike bitcoins, the majority of which too no effort or investment to obtain, and the value is based completely on the ability to market it to suckers.
Four ways to profit (Score:5, Insightful)
You can profit from bitcoin in four different ways:
1. Have a special asic rig that is custom made for mining bitcoins.
2. Have a botnet that you put to work mining bitcoins using other peoples electricity.
3. Speculate in bitcoins and bet that they will go up or down in value.
4. Hack someone else that has bitcoins.
Two out of the four ways to make profits with bitcoins are illegal and one of the others is often accompanied by illegal activity (DOS) to manipulate the exchanges to try to force the value up or down. It's been a while since you could mine them on your own and come out ahead on electricity versus bitcoin value. Perhaps there are some good reasons bitcoins have a shady reputation?
Re: (Score:3, Insightful)
You can get real money in four different ways:
1. Have a special skill or qualification that allows you to acquire money.
2. Put others to work earning you money for a profitable wage using other peoples special skills or qualifications.
3. Speculate, lol.
4. Steal.
Only one of these is ethical.
Re: (Score:2)
Only one of these is ethical.
I disagree with that. If #1 is ethical, #2 is also ethical, by extension. (If it's ethical to work, why wouldn't it be ethical to employ?)
#3 - speculation - is dubious. In its pure form, it's arbitrage with risk involved.
If you meant to say "Only one of these is unethical", then I apologize for misunderstanding.
Re: (Score:2)
And why does #2 follow from #1? This might be Capitalist dogma, but it's not a universal moral law. Many people do distinguish the category of "enjoy the fruits of your own labor" from "interpose yourself between someone else' willingness and ability to labor (by, e.g., owning the tools and resources), and collect a big cut of the fruits of their labor just because you are already rich (and they are poor, since they can only keep a tiny fraction of their labor's value for themselves)."
Re: (Score:2)
If it is ethical to work for others, it is ethical to employ others.
Suppose I need work done, within your skill set. I can pay you to do the work, yes?
Suppose I need work done, but I don't know who has the skills. I can pay an agent to find me a skilled worker, yes? (That agent's skill is finding me someone to perform the needed work.)
Re: (Score:2)
If it is ethical to work for others, it is ethical to employ others.
No, one does not follow from the other. Both assumptions are often held, but not on account of irrefutable logic or some god-given law of ethics.
Suppose I need work done, within your skill set. I can pay you to do the work, yes?
What you "can" do has nothing to do with what is ethical. Under some systems, if you want the results of my skills, you owe me the full value of those skills, not "as little as you can get away with at labor market prices because you are rich and I am desperate".
I can pay an agent to find me a skilled worker, yes?
Again, what you "can" do under current systems does not prove anything is "universally" ethical. If you
Re: (Score:2)
So what you're saying is false, by your own words. It only is after you add existing stupilations. You are assuming that because I choose number #2, that I'm also going to pay them less than they deserve, which is an assumption that may not be true in many cases, so its impossible for it to be a fact.
If you are selling your labor, someone has to buy it. If it is ethical for you to sell it, it must be ethical for someone else to buy it. That does not preclude non-ethical behavior, but it certainly allows
Re: (Score:2)
It only is after you add existing stupilations.
Exactly, "employing others for money" is not necessarily ethical by extension of the ethicality of "working for money," without adding a lot of other stipulations (such as wages representing the full value of labor, not some lesser amount negotiated from a position of wealth and power).
If you are selling your labor, someone has to buy it. If it is ethical for you to sell it, it must be ethical for someone else to buy it.
Not without "added stipulations" about fairness of the work. For example, I might consider it ethical for a child laborer to sell their own body to feed themselves in a cruel and exploitative world, but not for their scumbag
Re: (Score:2)
Alternate reductio ad absurdum argument that I hope will make you see the problem with your logic:
If it is ethical for you to sell it, it must be ethical for someone else to buy it.
Suppose you're strolling along when a mugger leaps out with a gun to your head, and says "your money, or your life!". I'd say it's ethical for you to give him your wallet and run. By your logic, does this make the mugger's actions ethical, too? After all, he's only enabling the other side of the transaction to your perfectly ethical decision to hand over your wallet.
Re: (Score:2)
Several posts back, I believe we already agreed that stealing was not ethical.
Re: (Score:2)
Right, which is why "buying labor" is not automatically an ethical extension of "selling labor," since it may be a form of stealing (though more "dilute" than jumping someone with a gun) without a large number of additional stipulations that are frequently absent from existing labor markets. Specifically, in the formulation that started the thread: "Put others to work earning you money for a profitable wage" is unethical in many ethical systems, since you shouldn't be "earning money" by putting others to wo
Re: (Score:2)
It is conceivable that while a structure is generally ethical (for example, work for hire), a specific instance may be arranged unethically (for example, price not reasonably aligned with value). Nobody is disputing that.
Again, what you "can" do under current systems does not prove anything is "universally" ethical.
You're being pedantic. Nobody is saying that anything is universally ethical; I'm saying that the concepts of working for others and employing others to perform work are not universally unethical. You're looking for extreme cases (like child prostitution) to justify your unreasonable cl
Re: (Score:2)
I'm being pedantic because being precise and pedantic is a way to reach logically correct conclusions. Your statement:
If it is ethical to work for others, it is ethical to employ others.
is simply false. An ethical system might choose to adopt both assumptions (or reach them both from other assumptions), but the latter does not follow from the former. Especially when "employ" is shorthand notation for the precise case you were originally supporting:
2. Put others to work earning you money for a profitable wage using other peoples special skills or qualifications.
in many ethical systems this might not be ethical at all --- specifically, the "earning you money" part, in systems which assume
Re: (Score:2)
Only one of these is ethical.
I'm guessing you meant theft. If you're starving to death, stealing a loaf of bread is something few people would say is unethical. As for the other three... well, they all involve money, and as we know, money is the root of all evil.
Re: (Score:2)
It is when one begins to value money over all other things that one begins to fall.
So, as long as money isn't your absolute #1 priority, you're fine: "It's OK; I love the finer things in life more --- like having peons cower in my presence, collecting fine art, and snorting drugs off of gold-plated hookers." In the ethical system from which the "love of money" quip comes, "loving money" isn't bad just when it reaches Spot #1; and the typical advice for folks who had lots of money was "sell everything you have and give it to the poor." The rationalization that it was hunky-dory to amass gi
Re: (Score:2)
The original statement was: "The love of money is the root of all KINDS OF evil."
People do commit various kinds of evil out of greed. However, there is plenty of evil in the world which has nothing to do with money, just as the mere presence of money does not necessarily result in evil.
Re: (Score:2)
You're arguing that in a transaction where one person agrees to use their special skills or qualifications in exchange for another person giving them an agreed upon amount of "money", one of the two parties has done something unethical?
I see nothing unethical about speculation either.
Re: (Score:2)
Method number 5: create your own alternative currency by fiat, grant yourself a large amount of that currency, then try to convince others that your currency is legitimate. Sure, this sounds a lot like stealing except that the suckers voluntarily buy into the system. So maybe more like a long con.
Re: (Score:2)
Speculation is not necessarily unethical.
FTFY.
Re: (Score:2)
Could you modify #2 in a way that uses cheaper electricity?
Say wind/solar/micro-scale hydroelectric?
Obviously if you have to build the power infrastructure from scratch, it's not worth it, but what if for some reason you had access to equipment that wasn't being used and you can generate a couple of kW for free?
If electricity is really the major input cost (and not computing infrastructure), then a variation of #2 could involve stealing electricity but using your own computer equipment.
I can almost see it n
Re: (Score:2)
It's been a while since you could mine them on your own and come out ahead on electricity versus bitcoin value.
The reason mining does lower returns now is because more people are mining now. I imagine many of them are driven by profits and are smart enough to only mine if they have a machine that mines more bitcoins than what they spend on electricity. Your post reads like the joke "No one goes to that club any more, it's too crowded!".
Re: (Score:2)
same way you would short stock. you have to borrow it from someone with the promise of returning their bitcoins later (probably with some interest), and then you sell them to someone else.
Re: (Score:2)
The difference in "practicality" is all the government regulation and lack-of-anonymity in stock shorting transactions. All the "benefits" of bitcoin make it a really dumb idea to say "hey, I'll send $10000 to pseudonymous internet guy #9cdn89274nkdw0, for a promise to sell me back bitcoins later." If you expect to buy "promises" from people, you need a lot of complex safeguards to make sure they don't just vanish away as soon as they have the money --- the opposite of what the Bitcoin system is set up to a
Re: (Score:2)
I'm not sure you'd call it practical, but there's at least one exchange, http://mpex.co/ [mpex.co], where you can apparently trade bitcoin options. A bearish position would involve buying puts and/or writing calls. Options are risky in the best of circumstances, and btc volatility and the lack of a mature market greatly magnifies that risk. Even if you are right about btc going down in value, timing and liquidity issues could easily cause you to lose 100% of the money you risk (or worse in the case of writing naked o
Re: (Score:3)
Re:Four ways to profit (Score:5, Funny)
"It is bad to ruin the environment. But it is far worse to misattribute modern environmental sayings to ancient Native Americans."
- Native American proverb.
There are alternative alternatives. (Score:2, Interesting)
More crypto-based currencies are coming around, Litecoin being the apparent "next big thing" I have been hearing.
Me and a friend were going to get in on it to see if it would at least maybe get a few quid or so, not expecting huge returns, just a little bit of profit.
But eh, I'm too lazy to leave a program running on its own.
I may try it out, but it is getting in to figuring out exchanges, knowing when to sell, etc.
I have a hectic life as is. Watching my investments is something I already don't do, probabl
Re: (Score:3)
I personally don't think that Bitcoin is a scam. I think it has great potential. But the myriad of other "digital currencies" popping up, I suspect most, if not all, are scams. Seriously, someone went and started a new chain, presumably hoping to do some mining, and then cash out.
With Bitcoins, you can buy various things, but what can you buy with "Litecoin"? Bitcoins? Bitcoins are established (though still niche) and can be used to purchase various services and products (though often via a middleman purcha
Re: (Score:3)
I personally don't think that Bitcoin is a scam. I think it has great potential. But the myriad of other "digital currencies" popping up,
Considering that all these 'new digital currencies' are just literal copies of bitcoin ... what you've done is shown that you think bitcoin is good for no logical reason, and that its copies are bad, again for no logical reason.
You've illustratued that your reason for liking BitCoin is you're just ignorant of any actual information about it.
Re: (Score:2)
Nah. I understand just fine.
Point 1: many of these alternative chains are not exact copies of Bitcoin, but have some slight change (e.g. using scrypt instead of sha256).
Point 2: Bitcoin wins, and has the most potential, because it was first. The others seem to be jumping on the bandwagon. Moreover, bitcoin wins because I can actually use it.
Point 3: I like the idea of Bitcoin, but I love the idea of a decentralized pseudo-anonymous (and can be anonymous with sufficient infrastructure in place) non-governmen
Same as the old boss... (Score:3)
So now Bitcoin becomes the province of "big iron" players like the gubmint and TBTF banksters. Great.
For those to lazy to click the link.... (Score:3)
Re:For those to lazy to click the link.... (Score:5, Interesting)
While that doesn't sound great, the 5 hours setting it up is one-time fixed overhead.
Let's assume he can sell coins for at least $125... and the rate of generation stays about the same.
That's $50 a week. If you saw $50 on the sidewalk, would you bend over to pick it up?
Betteridge says: (Score:2)
Re: (Score:2)
No.
Bzzt! Sorry, you lose; that's not what Betteridge is about. [slashdot.org]
The headline here *is* an actual, legitimate question (whether sensible or not) and not just an excuse to weasel through a poorly-supported assertion in the guise of a fake "question".
Hopeless without a FPGA (Score:5, Informative)
Bitcoins earned: 1.00
Value today: $133.58
Total time: 14.5 days
Rigs operating: 2-3
Towards the end of the run I was getting impatient and ExtremeTechâ(TM)s Joel Hruska helped me sprint to the finish by giving me access to some of his machines...
The era of Bitcoin mining with off-the-shelf hardware is over. The serious people are already using FPGAs, and if the people advertising ASIC hardware [butterflylabs.com] actually ship working product in quantity, even that will be obsolete. Like most Bitcoin-related businesses, the people selling ASIC mining hardware are flakes [bitcointalk.org].
Bitcoin mining becomes exponentially harder as the 21 million Bitcoin limit is approached. Over 11 million Bitcoins have already been found, so this is already more than half over. All miners are in competition. The rate of Bitcoin discovery is fixed, so the more people mining, the less each miner makes.
Re: (Score:2)
Told you so.... (Score:2)
Competition is on the rise and we are getting close to the end of the good ol' days of Bitcoin; the time when a desktop computer or two have any real mining capabilities.
So it really is a pyramid scheme, of sorts.
And that is the problem with bitcoin (Score:3, Insightful)
That miners want to make a profit, a fat one if possible. It would be like the US mint being a for profit organization. It isn't. Even republicans can see why not and that is saying something.
Bitcoin mining was NOT meant as a profit generation scheme but as a way to keep the coins in relative limited supply, to avoid the "tree leaves for currency requiring the burning down of all the forests to control inflation" problem. Bitcoin was originally meant as a barter currency, where you kept the barter. You provided something to somebody for bitcoins and in turn you use them to barter for something else. The idea was to create an altnernate barter market seperate from established currencies. To however create a "secure" currency, where somebody couldn't just print a lot of fake bills, both the mining and transaction require serious computation. In order to get volunteers to do this, a small amount of bits coins are set aside as a reward for handling transactions and miners get the bitcoins they intoduce into the pool to barter with.
BUT the original idea was that the mining would be a tiny amount compared to the flow of bitcoins. A bitcoin was supposed to be traded thousands of time before a new one was generated.
But as always, greed took over. Mining bitcoins was being seen as the ability to mint money and so people did it. Bitcoins became about speculation, who could mine them the fastest, hoard the most and then exchange them for something with real value. The MORE people shout about how many dollars bitcoins are "worth" the more bitcoins loose their value as a barter currency. People don't seek to make a profit from trade through a new way to exchange currency but by speculating in the currency itself. It resembles the gold market a lot. Not the real one, the gold market that has vending machines with tiny gold bars inside, the kinda people that believe that if they got a tiny fortune in gold, when the apocalypse comes, they will be rich because EVERYONE will be wanting gold then... nothing like dealing the end of civiliation then a gold bar.
Bitcoins as a paypal alternative for small traders makes some sense, keep some"value" in bitcoins as a user who sometimes buys and sometimes sells, avoid the traditional exchange fees. But for this to happen, the currency needs to be stable. It isn't and traders are either seeking to get bitcoins "cheap" and sell them high or just doing it as a novelty to create some press.
Google for places that accept bitcoins. The trade is simply non-existent. Places that reached the news have stopped accepting them and the remaining online shops are the ones you would normally stay a million miles away from. Shady doesn't even begin to describe them.
It was a nice idea but human greed and the lack of any counter measures have doomed it from the start.
1FuckBTCqwBQexxs9jiuWTiZeoKfSo9Vyi (Score:3)
Yes, send your unwanted bitcoins here: 1FuckBTCqwBQexxs9jiuWTiZeoKfSo9Vyi
Overall, a general problem with BitCoin mining is that it is a classic "Red Queen's Race" [wikipedia.org]. The fixed rate of bitcoin addition means you can only get ahead at the cost of someone else. Which means, IF bitcoin succeeded, mining is effectively non-profit as the rather low barrier to entry (even ASIC rigs are only $2K) and no monopoly power means that the profit from mining gets, well, stripped out.
Bitcoin vs electricity (Score:3)
Since the biggest gripe on Slashdot seems to be the cost of electricity of running gaming rigs to mine bitcoins....hmm...i think i now have a use for that spare 160W solar panel ive got lying around, and all those Spartan6 FPGA development boards i happen to have sitting around consume very little power each....
1) Idle equipment and free electricity
2) Spare Time
3) ????
4) Profit
How to make a million Dollars with BitCoin (Score:2)
To make a million in BitCoin, simply invest ten million in equipment, electricity and time. Or save electricity ant time by giving me nine million in cash, and I will give you back 1 million worth of BitCoins... But the real question is when will we see the first Nigerian BitCoin scams.
My blog post in this (Score:2)
Basically says it all. One could dress it up as a serious research paper, but what's the point, it would only be a waste of a precious scarce and becoming scarcer resource (trees).
Re: (Score:3, Insightful)
The pyramid scheme never ends...
That's because Bitcoin is not a pyramid scheme. You have completely misunderstood the meaning of one or both of these, to make a comment like that.
Re: (Score:2, Troll)
If the shoe fits....
Re: (Score:2)
The audio recording industry has a non-sustainable business model, and they now claim customers are not buying a real product or service but simply acquiring a licence. Sounds like they are about two thirds of the way to being a pyramid scheme. They aren't promising any payment for enrolling others, at least yet. You could argue that pushers offer pyramid schemes, discounting drugs to get new 'members' to enroll as junkies, yet pushing heroin doesn't quite fit the pyramid scheme definition. Maybe what we ne
Re: (Score:2)
Pyramid, cube, sphere, whatever. You got something against Egyptians, you insensitive clod?
Re:Another bitcoin article? (Score:5, Interesting)
A founder at the top making a mint...
Analysis of the block chain indicates that somewhere around 5 million early Bitcoins have never been traded. Those were generated when the difficulty was so low that ordinary CPUs could generate thousands of Bitcoins. Some of them were probably lost by people running the software in the early days and not keeping the results, but there's a reasonable chance that, somewhere, the anonymous people behind this have a few million Bitcoins stored up. Someday they may cash out.
Re: (Score:3, Interesting)
I just read from an investment newsletter that the Winklevoss Twins have a ton of bitcoins on flash drives locked up in safety desposit boxes.
Re: (Score:2)
Unlike a pyramid scheme, bitcoin does not require a constant stream of new investors to pay off the original investors, nor is there fraudulent misrepresentation involved in the sales.
I don't know how "top" and "bottom" even apply to a decentralized system. People that attempted to make a quick buck by purchasing bitcoin as the exchange rate fluctuated might have gotten burned, but that's the risk you take by speculating in currencies.
Re: (Score:2)
i think it is still there also there are a lot more places to use bit coins just go look through the hidden wiki some time oh and you can order pizza with them
Re: (Score:2)
What happened to Silk Road? I would have expected bitcoin to crash hard without the black market to spend them on, but I don't really follow either closely.
Re:Deflation, numbnuts (Score:5, Insightful)
Re: (Score:2)
Do we have any real examples of a currency that constantly increases in value? Even if there was such a thing, why would people continue to hoard it as they observed the prices of goods and services dropping? Why wouldn't there still be a premium available for lending as opposed to hoarding?
A currency which can be arbitrarily de-valued (like the P.O.S. USD) encourages MAL-investment and fuels speculative bubbles like we've seen in the U.S. economy. If the currency isn't a decent store of value, it ends u
Re: (Score:3)
There's a related problem here I think people are overlooking. Part of the appeal of bitcoin is it's decentralized nature - a government can't easily stop transfer of bitcoins between individuals. However, since mining is transaction processing, if it becomes only profitable to do transaction processing in the 3 biggest miner's datacenters, we're back to centralization and therefore easy government control.
Re: (Score:3, Informative)
Not compared to heat pump systems, that can often provide a lot more warming per watt than dumb direct heat generation methods. From Wikipedia on heat pumps [wikipedia.org]:
When used for heating a building on a mild day, for example 10 C, a typical air-source heat pump (ASHP) has a COP of 3 to 4, whereas an electrical resistance heater has a COP of 1.0. That is, one joule of electrical energy will cause a resistance heater to produce only one joule of useful heat, while under ideal conditions, one joule of electrical energy can cause a heat pump to move much more than one joule of heat from a cooler place to a warmer place.
On the other hand, ground-source heat pumps (GSHP) benefit from the moderated temperature underground, as the ground acts naturally as a store of thermal energy.[4] Their year-round COP is therefore normally in the range of 2.5 to 5.0.
Burning energy for 1:1 return on heat (+bitcoins) is still a terribly inefficient use of energy.
Re: (Score:2)
Yes.
Think of it like finding a needle in a haystack ( assuming an average ordinary everyday haystack ). The haystacks get bigger over time ( way bigger ), but there are only so many needles, and you have to go through a *lot* of hay to find one. It costs time and energy to find the needles.