Bitcoin is Worth Less Than the Cost To Mine It (bloomberg.com) 166
The production-weighted cash cost to create one Bitcoin averaged around $4,060 globally in the fourth quarter, according to analysts with JPMorgan Chase & Co. With Bitcoin itself currently trading below $3,600, that doesn't look like such a good deal. However, there's a big spread around the average, meaning that there are clear winners and losers. From a report: Low-cost Chinese miners are able to pay much less -- the estimate is around $2,400 per Bitcoin -- by leveraging direct power purchasing agreements with electricity generators such as aluminum smelters looking to sell excess power generation, JPMorgan analysts led by Natasha Kaneva said in a wide-ranging Jan. 24 report about cryptocurrencies spearheaded by Joyce Chang. Electricity tends to be the biggest cost for miners, needed to run the high-powered computer rigs used to process data blocks to earn Bitcoin.
"The drop in Bitcoin prices from around $6,500 throughout much of October to below $4,000 now has increasingly pushed margins further and further negative for just about every region except low-cost Chinese miners," the analysts said, offering the caveat that their cost estimates may be skewed to the high side due to spotty data and conservative efficiency assumptions. The cost figures exclude equipment.
"The drop in Bitcoin prices from around $6,500 throughout much of October to below $4,000 now has increasingly pushed margins further and further negative for just about every region except low-cost Chinese miners," the analysts said, offering the caveat that their cost estimates may be skewed to the high side due to spotty data and conservative efficiency assumptions. The cost figures exclude equipment.
Sort of (Score:5, Interesting)
Bitcoin costs less than it costs to mine it - but only if your paying for the electricity. Own someone else's computer and you can happily mine without worrying about pesky things like electric bills. Hell, some websites will run a miner on your computer while your browsing their web page.
https://99bitcoins.com/webmini... [99bitcoins.com]
https://www.forbes.com/sites/l... [forbes.com]
The biggest problem with bitcoin is that there is no consideration as to the cost to the environment. Those that are dishonest can better exploit bitcoin than those that are honest.
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No environmental problem, as bitcoin consumption is actually negligible, on the order of a large city (not a country as those who misquote and misunderstand the IEEE article 'absurd cost' claim, that was projection for future)]
So... bitcoin takes less power than internet porn and internet games...both unessential things.
so it doesn't matter.
Re:Sort of (Score:5, Interesting)
So... bitcoin takes less power than internet porn and internet games...both unessential things.
Take those away and see how quick you get riots.
Bitcoin is shit because there are better ways to handle that problem which don't consume nearly so much electricity, therefore that energy is purely wasted. You can't have porn and games without spending power on them, but you can have cryptocurrency while spending much less power, or by spending that power to do genuinely useful work.
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A cryptocurrency powered by useful work won't actually work due to game theory; someone *will* find a way to cheat.
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Perhaps. But if almost US$20k per coin was not enough incentive, then I am not sure how much incentive would be required. The system is actually not all that complicated. I certainly don't see how anyone can cheat other than be obtaining (by brute force) majority control of the mining operations.
Re: Sort of (Score:1)
Are you kidding? Malware specializes in installing miners on unsuspecting people's computers and cryptocurrency in general has a history of stuff like people running off with other people's coins...
The more "valuable" they become, the more they become a target for people to go after. And if individuals or small groups can't do it, you best bet countries would. There is litle to be lost if they get caught and a ton to be won if they succeed.
North Korea, which has legitemate US currency printing presses (albe
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From the perspective of the system, mining isn't cheating (the only person who loses is the one paying for the resources). But if that was what the OP meant, then I concede the point. From a practical perspective, there is not much point in using PC's to do bitcoin mining at this stage. Without highly optimized hardware, you just don't get anywhere. You have to use dedicated miners.
From my reading of the original poster, I though they meant something different than that. As far as I know, not one coin has e
Re: Sort of (Score:1)
You have to keep your cryptocurrency somewhere and exchange them at some point and both of those have weaknesses.
There's a newer post about a kid who simply SIM swapped a phone and stole over five million. And there are definitely ways to exploit just about every stage of crypto creation....
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I certainly don't see how anyone can cheat other than be obtaining (by brute force) majority control of the mining operations.
You mean how Bitmain, the owner of btc.com and antpool, had at one point 60%?
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How much coin did they steal?
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It's pointless for them to steal a significant amount.
You can't sell it quick enough to before trust is lost and no one wants to buy it.
Who's going to want to buy a billion dollars of BTC?
They make billions every year selling mining hardware instead.
Re:Sort of (Score:5, Interesting)
Similar to how the people who made the real money in the 1849 California gold rush were the people who sold food and equipment to the miners.
Re: Sort of (Score:2, Interesting)
Clothing, actually. Levi and Strauss, to be specific... sound familiar?
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Why's that? Was there really not much gold in them thar hills?
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Let's not forget the original post.
"A cryptocurrency powered by useful work won't actually work due to game theory; someone *will* find a way to cheat."
My interpretation of this is that the OP thinks people will find a way to trick the system into awarding coin without doing the work required by the bitcoin system. That has never happened. Exchanges have defrauded customers. And in some cases, coins have been transferred because private keys were exposed somehow. People have run miners using power paid for
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Let's not forget the original post.
"A cryptocurrency powered by useful work won't actually work due to game theory; someone *will* find a way to cheat."
I think you missed the important word "useful". Yes, a cryptocurrency powered by wasteful, useless, but easily-measured work (bitcoin) does work. If you try to base the currency on useful work then the usefulness will be harder to measure and it will probably be easier to cheat.
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So the OP was saying that bitcoin only is viable because the work is useless? And that any effort to harness the computing power for useful work instead will necessarily introduce a method of cheating? I don't think that is what they meant. But I could be wrong.
Re:Sort of (Score:4, Interesting)
I think that was the meaning. Even if the OP didn't mean that, it is likely true.
The work producing bitcoin is based on a rather narrow category of problem that is difficult to compute but trivial to verify. That trait is necessary to prevent cheating. You either did the work or not and it's trivial to determine.
The problem is that that necessary characteristic isn't shared by anything useful.
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At the end of this thread, the moral of the story, don't grind bitcoin at the cost of energy, grind the energy instead. Which I know, means solar panels and batteries but hey it is a tax free income, anything you don't pay on an electricity bill is entirely a tax free investment. Better to invest on generating electricity on your own roof than grinding bitcoins under it, ;D.
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That is exactly what I meant.
The problem is who, or what defines 'useful'.
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There is a third requirement, a solution must always be available.
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Curecoin would like a word with you.
https://curecoin.net/ [curecoin.net]
I don't actually care about the "coin" bit, but if it gets people to fold proteins, I'm all for it.
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Ok, then let us all know. Let us all know your better way to achieve transactions in a distributed, trustless system?
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Bartering using precious metals and official IOUs for them has worked fairly well throughout history.
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Two problems with bartering precious metal and official IOUs. The economy expands faster then the supply of precious metal, causing a shortage or the supply of precious metal expands faster then the economy, causing inflation.
This isn't even counting the problems with IOUs (printing too many) or the problems with more then one precious metal (price difference changes)
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Two problems with bartering precious metal and official IOUs. The economy expands faster then the supply of precious metal, causing a shortage or the supply of precious metal expands faster then the economy, causing inflation.
No, that causes deflation, not inflation.
Inflation: Your money decreases in value, so there's little incentive to save but instead spend it quickly.
Deflation: Your money increases in value, so there's little incentive to invest money, only time and other resources.
In a growing economy, mild inflation is generally beneficial, but in a stable society, mild deflation cements the stability.
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My understanding is that the influx of precious metals from the new world to Spain created inflation.
https://history.stackexchange.... [stackexchange.com]
Though Wiki seems to show more nuances, https://en.wikipedia.org/wiki/... [wikipedia.org]
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Deflation encourages cash hoarding. And the ultra-rich are ALREADY hoarding cash!
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Deflation encourages cash hoarding. And the ultra-rich are ALREADY hoarding cash!
Indeed. Which is why I think a deflationary system cannot work without progressive capital gain taxes, to make it easier for those at the bottom to save, and harder for those at the top to hoard.
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Doesn't help with legacy cash. We also either have to tax wealth and not just income, or at least bring back inheritance taxes to a nice high rate... Or just use inflation. Tying the minimum wage to inflation (and also making it a living wage) would at least reduce the impact there. And we could drive inflation by printing money and handing it out as UBI. Any plan for the future that doesn't include UBI is doomed to fail anyway, unless we outlaw automation :p
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mild deflation cements the stability.
That might work in a society with no credit at all, but deflation would be devastating for most people. Lets say you own a house that cost $200,000, and you are paying a 30 year mortgage on. Now lets say your currency, over a number of years, deflated 5%. I.E. every dollar now purchases $1.05 worth of goods compared with a few years ago. Congratulations, your house is now worth $190,000 but you are still paying $200,000. This is one of the reasons why the fed avoids deflation at all cost.
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It depends on how you define a stable society, I guess. In an utopic stable society, there might not be mortgages, but a strict earning-precedes-spending ethos. In which case living below your means and saving up is advantageous, as your money will increase in value as you wait for being able to afford a house.
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The whole rising bitcoin value phase is just insane deflation.
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Just look at XRP. It's less centralised than bitcoin and consumes 0.1 TW/hr per year to run.
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I agree bitcoin is shit
bad investment
too iliquid to be money because of bottlenecked architecture
now not even worth mining in most places
plenty of things humans do are unnecessary, good food and booze, the frequent sex that effective contraceptives allow, etc.
doesn't matter what anyone considers "useful work"
Re:Sort of (Score:4, Informative)
No environmental problem, as bitcoin consumption is actually negligible, on the order of a large city (not a country as those who misquote and misunderstand the IEEE article 'absurd cost' claim, that was projection for future)]
At the risk of stating the obvious, there are plenty of countries with populations that are smaller than "a large city"; the population of New Zealand is roughly half that of Tokyo.
I couldn't find reliable data in the time that I had to compare like with like, but a reasonable null hypothesis is that both claims are true. I can easily see how a large city could easily consume the same power as a modest-sized country.
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Wasn't the original example country Iceland? Lots of cities larger in population then Iceland.
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on the order of a large city (not a country as those who misquote and misunderstand the IEEE article 'absurd cost' claim, that was projection for future)
There are many countries that would have lower electricity consumption than a large city. So there is no reason both cannot be true.
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There are many countries that would have lower electricity consumption than a large city.
... In fact, 80% of the world's countries use less electricity than Los Angeles.
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60.000.000 TH/s
Best miner:
1TH/s = 0.1kW
So
6TWh*365*24 = 52560TWh/year = 52.560.000.000kWh/year bestcase.
And that is not including cooling, other shitcoin or anything else.
https://en.wikipedia.org/wiki/... [wikipedia.org]
So bitcoin used, at peak, same as the 48’th country out of 219 countries.
I seriously doubt porn and internet games use more power than bitcoin.
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The first is ridiculous, the second is correct. Correct to the point that you have to wonder if it wasn't designed that way intentionally. Already it has been shown to be vulnerable to the most obvious and blatant "pump and dump" schemes imaginable. Either the people who came up with it knew that and built it that
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Bitcoin costs less than it costs to mine it - but only if your [sic] paying for the electricity.
This is essentially the same as the theory behind email spam. Most of the cost of spam is not borne by the person sending spam, but by the people receiving it. The cost to each individual recipient is very small, but multiplied by the number of recipients it adds up to quite large costs.
Re:Sort of (Score:4, Interesting)
You can't really use other people's computers to mine bitcoin, they are too slow to do any useful work. You need dedicated, application specific hardware. The various web based stuff focuses on lighter, easier to mine coins, most of which are just scams anyway.
This story is good news. It might stop people wasting energy on bitcoin, and it means that there will be more cheap GPUs on the second hand market. You can pick up a cheap Geforce 1060 class mining card for $70 on AliExpress. It doesn't have any connections for monitors but with a simple modification to the driver you can use it along with an on-board GPU (e.g. Intel) with only a minimal performance loss, or even in SLI with another Nvidia card.
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The biggest problem with bitcoin is that there is no consideration as to the cost to the environment. Those that are dishonest can better exploit bitcoin than those that are honest.
Isn't this true about any form of currency? Or, to be more precise, about any wealth-generating activity? Using finite resources in an irresponsible/dishonest way is always more profitable than "doing the right thing". That's why we have issues with deforestation in South America, environmental devastation from strip-mining in North America, hazardous waste pollution in China, etc. More ecologically friendly ways of maintaining adequate farmland, removing mineral resources, and reducing/disposing of industr
apartment scams (Score:2)
There's also the scam of renting an apartment, where the utilities are included in the rent. I have a friend whose family owns a vacation apartment. Someone rented it for a summer, stuffed it full of miners, and burned an astounding amount of electricity. At the end of the month, they disappeared. When the quarterly utility bill arrived, well...
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Bitcoin costs less than it costs to mine it - but only if your paying for the electricity.
The report is deeply flawed. They don't take into account the efficiencies of scale with ASIC manufacturing, the sunk costs from green energy, and the fixed contracts for extremely cheap electricity.
Hell, some websites will run a miner on your computer while your browsing their web page.
This has nothing to do with Bitcoin as you can not efficiently mine Bitcoin with GPUs for the last 6.5 years .
The biggest problem with bitcoin is that there is no consideration as to the cost to the environment..
Proof of work is the most efficient means to come to secure consensus and thus it is far better for the environment than Proof of Stake or fiat currency- http://www.truthcoin.info/blog... [truthcoin.info] and https://ww [youtube.com]
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I think it was the 'your' issue.
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You obviously skipped the classes on being a decent human being however.
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The mining cost is a function of the difficulty, which automatically adjusts itself to maintain the long term mining rate at one block per 10 minutes. As unprofitable miners drop out, the difficulty will decrease, and thus the cost of mining. Right now, you get 12.5 coins per block mined (plus all transaction fees on the transactions contained in that block). Eventually that 12.5 will be cut in half, and longer term, it will be zero. But by that time, so the thinking goes, bitcoin value will be stable enoug
Re:Sort of (Score:5, Interesting)
which automatically adjusts itself to maintain the long term mining rate at one block per 10 minutes.
Which is just one reason why btc will never replace traditional payment networks.
No one is going to wait 10 to 20 minutes for a transaction to be verified when they're at a checkout.
Nor are they going to effectively bid to have their transactions accepted by miners in what is a global limitation of less than 10 transactions per second.
Visa can process a peak or 56,000 transactions per second and regularly does 4,000 per second.
Apparently Mastercard does even more than that.
There's AMEX too, and many others. All of which operate simultaneously, as they're all methods of transferring fiat currency, not specific Visa Dollars or Mastercard Money. The customer's bank also deals with currency conversion automatically. I don't care that the thing I'm selling to a guy in Japan is paid for in Yen, I get my dollars in exchange, in less than a second. At most it costs me 2.5% in fees. Usually less.
BTC fees can be upwards of $40.
As a consumer, if someone steals my credit card number, there's a limit to how much can be taken, and most likely I'll get the fraudulent transactions reversed. Nothing lost.
If someone steals my BTC wallet, I'm fucked. Every coin in that wallet is gone forever.
If I lost it, I'm fucked, every coin in that wallet is lost from the network forever. In a network of finite coins. There are 5 wallets with more than 100,000 BTC in them. I'm will to bet someone just lost their private keys
This guy: 1FeexV6bAHb8ybZjqQMjJrcCrHGW9sb6uF put 80 BTC in there back in 2011, and some minor deposits have trickled in over the years, but never a single withdrawal. Maybe it's a "please donate" address on some website somewhere and the owner has since died.
So far ~10% of the total supply has been lost forever. An estimated 2 million btc are gone, mostly from the first few years.
Re:Sort of (Score:4, Interesting)
I agree that bitcoin transfer method will not replace visa mastercard etc. If bitcoin ever replaces the dollar as the world reserve currency, people will still use visa (only they will be transacting in bitcoin). Buyer and seller will both trust visa, and visa will settle accounts from time to time on the bitcoin network as they see fit. However, except for the height of the mania, bitcoin transfer fees have not been anywhere near 40 dollars.Currently it is something like US$ 0.09 per transaction (which is much less than visa charges, but still, who wants to wait 10 minutes).
https://bitcoinfees.info/ [bitcoinfees.info]
It is unclear whether bitcoin will fail or continue to exist. But if an oil-producing nation unfriendly to the US decided to sell oil for bitcoin, that might be all it would need to be taken seriously as something with consistent purchasing power. Iran could achieve this single-handedly by promising to sell oil for bitcoin at price X for at least 3 months. That would peg bitcoin to the cost of crude. I think there is at least a 10% chance that bitcoin will replace the dollar as the world reserve currency some time in the next 10 years. If that happens, the value of each coin will be approximately ALL_THE_MONEY_IN_THE_WORLD / 20,000,000.
But yeah. All good points that you are making.
Re: Sort of (Score:2, Interesting)
Funny you should mention it, but looks like another 2,500 bitcoin just went out of circulation forever....
https://gizmodo.com/crypto-exchange-says-it-cant-repay-190-million-to-clie-1832309454
Guy with the keys died.
The exchange holds roughly 26,500 bitcoin, 11,000 bitcoin cash, 11,000 bitcoin cash SV, 35,000 bitcoin gold, nearly 200,000 litecoin and about 430,000 ether
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Which is just one reason why btc will never replace traditional payment networks.
No one is going to wait 10 to 20 minutes for a transaction to be verified when they're at a checkout.
Nor are they going to effectively bid to have their transactions accepted by miners in what is a global limitation of less than 10 transactions per second.
Visa can process a peak or 56,000 transactions per second and regularly does 4,000 per second.
Apparently Mastercard does even more than that.
There's AMEX too, and many others. All of which operate simultaneously, as they're all methods of transferring fiat currency, not specific Visa Dollars or Mastercard Money. The customer's bank also deals with currency conversion automatically. I don't care that the thing I'm selling to a guy in Japan is paid for in Yen, I get my dollars in exchange, in less than a second. At most it costs me 2.5% in fees. Usually less.
BTC fees can be upwards of $40.
As a consumer, if someone steals my credit card number, there's a limit to how much can be taken, and most likely I'll get the fraudulent transactions reversed. Nothing lost.>
How long does your bank take to actually complete money transfer transactions? For most things, the transaction takes *days*. Even with a cashier's check you can't be guaranteed that the money is transferred in a timely manner. That's why when you're selling your car, most people are unwilling to except a check or a cashier's check. You do it in cash or at a bank (with two accounts at the same bank).
All that Visa/MasterCard/AMEX/etc are doing is just buffering the money transfer as credit. The true payment
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There is a level of trust, where both parties trust the centralised system.
With a decentralised system, you have to trust the system. which only gives you and answer in bitcoin when the block becomes part of the chain. Which only happens every ~10 minutes. Which means a wait time between 10 and 20 minutes.
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I won't argue that it hasn't worked out as a currency due to transaction limitations... However there is more to it than efficiencies and transaction times.
Things where for example the aforementioned credit companies decided to "cutoff" Wikileaks, and Paypal for various reasons, but mostly because they could. The idea (ideal really) behind these BC based "currencies" would be the inability for anyone to control it.
That said, you are right that unless a "currency" can maintain a certain threshold of realisti
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A penny costs more to make and administrate than it is worth.
The real value of a penny isn't the face value, but as a lubricant for transactions.
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How so? As far as I'm aware, only country is left which actually mints and circulates pennies, and that is due to corruption (metal company paying off politicians)
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Britain still mints and circulates pennies.
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So they do. Along with the AC's reference to the Centavo.
Still seems like a waste of resources, even nickles and dimes are only useful for change. When I was a kid, there was candy that cost 2 for a penny and a nickel or dime went quite a ways. Now a pack of matches probably costs more then a dime, if you can find one.
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Seems not to be circulated judging by the mint numbers. 18 million since '95.
Everything is worth what someone will trade for it (Score:2)
"*Bitcoin Is Worthless "
Everything is worth what someone will trade for it. Nothing more or less.
Some kinds of money-like commodities have some inherent desirability factor. For instance, gold is pretty and can be used to make lots of desirable stuff: Jewelry, electrical connectors that don't corrode, ...
The only such factor for Bitcoin is that it's hard, progressively harder with time, and eventually impossible, to create more and thus dilute the perceived value of what is already being traded.
IMHO the
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The system is designed in such a way that the mining rate of one block every 10 minutes will be maintained (over the long term average) regardless of how many miners are in operation or what their hashing capability is (over a very wide range). This has worked so far. As miners drop out, the difficulty will likely reduce, meaning that the probability of any one miner getting a reward increases. It doesn't really work the way you think it does.
It is not "progressively harder with time." The hardness is adjus
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Everything is worth what someone will trade for it. Nothing more or less.
Not true; only true among those people who didn't do any studies in economics. Trivial counter-examples: lots of people are tricked into paying thousands of dollars for stuff that is later found to be worthless (fraudulent gems, bridges, etc).
Just because someone scammed someone else out of money for worthless glass does not raise the value of the glass to the level of rubies and emeralds.
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That's usually true of everything (presuming they're honest).
If they were willing to pay as much as or more than something is currently selling for, they wouldn't be talking - ESPECIALLY talking up the price. They'd be buying some more. They'd keep buying until they're out of loose cash or it's gone above what they're willing to pay for it again. Then they might answer some more questions. B-)
That's cool - I can keep ignoring it. (Score:5, Interesting)
Listen - I understand all the ideals of cryptocurrencies - from distributed power, to limited supply, to anonymity.
They're a worthwhile idea to explore - but every virtue they hold has a vice - and for the same reason I find biofuels competing with food crops to be a bad tradeoff - I find expending fuel into the environment to be a similar bad tradeoff.
That's hardly the only concern - but it's enough for me to consider it an idea that really needs to go back to the drawing board as a currency.
That said, it's still a resource that will be speculated on - so good luck to those that care about that aspect, I suppose.
Ryan Fenton
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First... You cannot speak on cryptocurrency until you own some cryptocurrency, till you mine it, till you speak with others about your adventures. Not a HODLer, not an authority. aka: Not you.
Second... the "Environment"... it costs more for the US Gov alone to merely print and ship banknotes out to banks, than cryptocurrency burns in a year. Don't believe it? Go read the FED Reserve datasheet on those costs. Then go add in every other countries Govt, all the Banks, all the retail, everything.
Cryptocurrency
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Feedback mechanism? (Score:2)
I had the impression there was some sort of feedback mechanism in how much bitcoin you get for mining a block. TFA doesn't talk about this. This would mean that if your mining costs are substantially higher than others, you'll be unprofitable no matter what the bitcoin price is doing.
Perhaps it is just a supply/demand thing? The more miners there are, the lower the chance you get to mine the block, so the lower the expected return you get in bitcoins. Then for a fixed bitcoin reward, the number of miners wi
Re:Feedback mechanism? (Score:4, Informative)
Not exactly. The feedback operates to adjust the difficulty of mining. The way it works is that if blocks are mined faster than once every 10 minutes (on average), the difficulty is increased slightly. If it takes longer than 10 minutes, the difficulty is reduced slightly. As machines go offline due to poor profitability, the difficulty will likely have to decrease to keep the mining rate constant. This has pretty much worked as designed over the inception of bitcoin. Despite all the hash power people have thrown at bitcoin, the rate of new block creation has stayed consistent on average. The difficulty is not updated super often. Here is a chart of difficulty vs time.
https://bitinfocharts.com/comp... [bitinfocharts.com]
How much bitcoin you get for mining a block (the reward) is pre-determined by the implementation. It goes down by half every so often. Currently, the reward is 12.5 bitcoin. The "reward" represents the creation of new bitcoin. Once all bitcoins are mined, the reward will be zero. In addition to the reward, miners also collect fees from all the transactions contained in the mined block. Eventually, the only incentive to mine bitcoin will be to collect the transaction fees.
If you haven't already read the whitepaper, I recommend it. It is not that long, and not that difficult to understand for people familiar with hashes and cryptography and whatnot. It is 9 pages.
In my opinion, most coverage of bitcoin, even in the technical press, is woefully uninformed. The ONLY reason bitcoin takes so much energy to maintain is because the price rose so high, and the difficulty therefore increased. Now, as some of the mania is dying off, things should be a lot more sane, and non-profitable miners will bow out.
https://bitcoin.org/bitcoin.pd... [bitcoin.org]
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You are generally correct on the supply/demand thing. The mining reward per block is mostly constant, halving every four years, and people will mine as long as it's profitable for them.
There's an important feedback mechanism in the difficulty level of mining. The network adjusts this to maintain the block interval at 10 minutes. When prices increase and more miners come aboard, blocks will be found more frequently until the difficulty adjustment kicks in. Conversely, difficulty will drop when there are f
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I had the impression there was some sort of feedback mechanism in how much bitcoin you get for mining a block.
It becomes easier when fewer people are in the mining pool. But a lot of people already bought their equipment, so there is no reason to drop out of the mining pool. Better to partially get back your investment than to lose it all.
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What is left of the advanced math needs an ASIC to pay back with the cooling and day to day power costs.
Solar? Free hydro?
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Headline doesn't understand how mining works (Score:2, Insightful)
This is exactly what's supposed to happen. Over time, mining *new* coins gets more expensive. Of the coins mined, I'm pretty sure a very small percentage were from this year. The many others that were mined earlier for much less cost still "exist" in the sense that bitcoin is "found" when mined.
The system is working exactly as intended, nothing more to see here.
Bitcoin may be worthless, or it may go to $40k this year, either way, this has much less to do with it one way or the other than this article seems
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The mining farms pay very close attention to that value because if the cost of mining the very next coin is higher than the coin is worth, they will shut down their mining operation and liquidate. Not right away, of course, but after they've decided that the new norm isn't profitable.
If all the mining farms shut down except for those in China and a few other rare locations where energy is cheap, then there's a very real concern that China, or at least one of only a few agents in China, could control the Bi
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This is exactly what's supposed to happen. Over time, mining *new* coins gets more expensive. Of the coins mined, I'm pretty sure a very small percentage were from this year. The many others that were mined earlier for much less cost still "exist" in the sense that bitcoin is "found" when mined.
The system is working exactly as intended, nothing more to see here.
As I suspect you well know, that isn't the entirety of what was supposed to happen. Bitcoin was also designed to be deflationary, the value of a bitcoin was meant to increase along with the difficulty. Since the two have been disconnected for some time that doesn't exactly sound like a system working as intended to me.
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Perhaps I'm not alone in thinking a currently should be stable....
The ultimate dupe (Score:5, Funny)
"The drop in Bitcoin prices from around $6,500 throughout much of October to below $4,000 now has increasingly pushed margins further and further negative for just about every region except low-cost Chinese miners," the analysts said, offering the caveat that their cost estimates may be skewed to the high side due to spotty data and conservative efficiency assumptions. The cost figures exclude equipment. "The drop in Bitcoin prices from around $6,500 throughout much of October to below $4,000 now has increasingly pushed margins further and further negative for just about every region except low-cost Chinese miners," the analysts said, offering the caveat that their cost estimates may be skewed to the high side due to spotty data and conservative efficiency assumptions. The cost figures exclude equipment.
New Slashdot feature: rather than making readers wait a couple days for a dupe, dupes are now included in the initial entry.
Rather than making readers wait a couple days for a dupe, dupes are now included in the initial entry.
Re: (Score:2)
Heh heh (Score:2)
"Bitcoin is Worth Less Than the Cost To Mine It"
Heh heh, not if you steal the electricity and the computing time.
I mean, that's what I heard.
That proverb about gambling... (Score:3)
It has been said that gambling is a tax on low IQs. Given the amount of Bitcoin that has been simply lost on discarded thumb drives, corrupted disks, forgotten passwords, and in stolen 'wallets', I would call Bitcoin a tax on people who are slack about IT security.
Re: (Score:2)
OK, what? (Score:2)
I'm curious. What's the pecking order between leading and spearheading?
Re: (Score:2)
Leading is higher. The leader controls the resources, the spearheader is the project owner. To use a computer example, a CIO might lead a new initiative to rewrite some internal tool, while an Architect or Sr. Engineer would spearhead the project.
Ponzi Scheme (Score:1)
Energy (Score:2)
So, currently it's only economically feasible to mine bitcoin if energy(electricity) is very cheap at your location.
That would be Iceland, Norway, and other places with very cheap hydro/thermal power.
Cheap electricity in China is a bit of an oddity:
China has built huge aluminum smelting capacity.
Most aluminum smelting plants in China are powered by coal, heating steam to then heat the aluminum. (steam is my guess)
The heat of the aluminum after smelting can be used to power a steam turbine which spins a gene
Not in Winter (Score:2)
Re: (Score:2)
Using electrical resistance heating (also known as Joule or Ohmic heating) has a COP of exactly 1.0. Which means for one Joule of electricity you get one joule of heat.
Heat pumps however can have a COP of 3 or 4, by pumping heat in from outside (yes even if its below freezing outside, do some research on heat pumps) you can get 3 or more joules of heat introduced to your living space for only 1 joule of electricity used.
Electric resistance heaters are being phased out in some countries (e.e sweden, denmark
Re: (Score:2)
This is exactly why I run Folding@Home in the winter months.
And I still could make a small fortune (Score:2)
if only I had bought it when everyone (including me) believed it was a crazy, stupid idea.
I'm not bitter. Anyone could make a killing in numerous investments if they knew beforehand when they would reach their peak and when was the right time to buy and sell. HIndsight is 20/20.
And just to be clear, I still think it's a crazy,stupid idea.
Right (Score:2)
This is how markets work, right? The price settles around the cost to produce.
Wasted energy ... (Score:2)
About the worst possible store of value you could conceive.
Re: (Score:2)