5 ms·

The premise of mining bitcoin is not really about being cost effective today, but taking a long position on its value, and what you perceive the value will be,

The premise of mining bitcoin is not really about being cost effective today, but taking a long position on its value, and what you perceive the value will be, for totally anonymous money at some point in the future. Because the profit earned from mining is pretty close to the definition of untrackable in a crypto.

Retric 9y ago
You need to buy the equipment from some third party and hide your IP address. It's possible to do both while maintaining anonymity, but if you can hide cash transactions then bitcoin get's you zero net benefit while exposing you to new risks.
- Frogolocalypse 9y ago
  > You need to buy the equipment from some third party and hide your IP address. No. You don't. The other stuff is just confusing.
solotronics 9y ago
would it be better to just buy hold and use Bitcoin? mining adds slightly to the decentralized nature but I am curious about comparing buy and hold vs mine.
- ryan-c 9y ago
  Mining anonymously is much easier that buying anonymously.
- mikeash 9y ago
  I think it depends on whether you think the price will go up, or merely remain high. Mining lets you make money even if the price remains stable, as long as it's already sufficiently high. To make money with buy and hold, the price needs to increase.
- ajc-sorin 9y ago
  Because it's super easy to buy and hold Bitcoin, if it becomes more popular the value of mining rigs will increase. Right now, there's probably no material difference between buying the coin itself or buying the rig and mining, but eventually, it may become more pronounced. There are other benefits as well. Buying the mining rig is a sort of hedge in that if bitcoin drops to $0, you at least have some hardware that can be re-purposed/sold.
  - saurik 9y ago
    The more people who mine the less valuable your mining hardware becomes, as the hash rate increase will lead to a difficulty update: it is a lottery that is designed to give payouts at evenly spaced time intervals. You also now have a slightly old, very special purpose computer... it is like owning a three year old graphics card in a world where you decided graphics cards are not that interesting to own... what exactly are you "repurposing" it for? If it is some really awesome ASIC-based mining rig it might only be useful to mine Bitcoin.
  - simias 9y ago
    But the more popular the coin becomes the harder it becomes to mine it. If the increase in mining difficulty (driven by total network hashrate) increases faster than the price of bitcoin then your mining apparatus becomes less and less profitable. As for repurposing hardware, that might work with GPUs (although their value depreciates pretty quickly) but the Antminer is a custom ASIC, so it can't do a lot more than bruteforce SHA-256.

Retric 9y ago

You need to buy the equipment from some third party and hide your IP address. It's possible to do both while maintaining anonymity, but if you can hide cash transactions then bitcoin get's you zero net benefit while exposing you to new risks.

Frogolocalypse 9y ago
> You need to buy the equipment from some third party and hide your IP address. No. You don't. The other stuff is just confusing.

solotronics 9y ago

would it be better to just buy hold and use Bitcoin? mining adds slightly to the decentralized nature but I am curious about comparing buy and hold vs mine.

ryan-c 9y ago
Mining anonymously is much easier that buying anonymously.
mikeash 9y ago
I think it depends on whether you think the price will go up, or merely remain high. Mining lets you make money even if the price remains stable, as long as it's already sufficiently high. To make money with buy and hold, the price needs to increase.
ajc-sorin 9y ago
Because it's super easy to buy and hold Bitcoin, if it becomes more popular the value of mining rigs will increase. Right now, there's probably no material difference between buying the coin itself or buying the rig and mining, but eventually, it may become more pronounced. There are other benefits as well. Buying the mining rig is a sort of hedge in that if bitcoin drops to $0, you at least have some hardware that can be re-purposed/sold.
- saurik 9y ago
  The more people who mine the less valuable your mining hardware becomes, as the hash rate increase will lead to a difficulty update: it is a lottery that is designed to give payouts at evenly spaced time intervals. You also now have a slightly old, very special purpose computer... it is like owning a three year old graphics card in a world where you decided graphics cards are not that interesting to own... what exactly are you "repurposing" it for? If it is some really awesome ASIC-based mining rig it might only be useful to mine Bitcoin.
- simias 9y ago
  But the more popular the coin becomes the harder it becomes to mine it. If the increase in mining difficulty (driven by total network hashrate) increases faster than the price of bitcoin then your mining apparatus becomes less and less profitable. As for repurposing hardware, that might work with GPUs (although their value depreciates pretty quickly) but the Antminer is a custom ASIC, so it can't do a lot more than bruteforce SHA-256.