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A good description of why that won't happen comes from a comment made on HN a week ago by Construct. "Meanwhile, hardware enthusiasts all over the internet are

by corin_ 16y ago

A good description of why that won't happen comes from a comment made on HN a week ago by Construct. "Meanwhile, hardware enthusiasts all over the internet are rushing to buy GPUs to dedicate to mining. They don't seem to realize that the bitcoin system automatically adjusts to keep the bitcoin generation rate constant at 50 BTC per 10 minutes. As the mining market becomes flooded with new 'miners' the difficulty will climb rapidly, until it becomes unprofitable to run a GPU if you have to pay for electricity." http://news.ycombinator.com/item?id=2501154 http://news.ycombinator.com/item?id=2501154

contactdick 16y ago
Sounds like it's already happening - to quote construct "Some quick research shows a handful of big players in the mining market who have invested heavily in high-end GPUs for dedicated bitcoin mining, some with over 50 GPUs running 24/7 for months now. These guys are bound to have huge quantities of bitcoin they are eager to unload when the price is right. Meanwhile, news coverage is driving exploding popularity, which appears to be pulling the exchange rate sky high. On paper, many of these guys have become overnight millionaires just by running a bunch of computers 24/7."
- corin_ 16y ago
  I believe the idea is that mining was a solution for launching BitCoin, and that as BitCoin has become more popular, the value of mining has gone down, meaning that at some point (I don't know if it's already happened or not), mining won't be worth the returns.
  - dfox 16y ago
    mining has to be worth the returns, because without mining the network will not work. It is not about generating BTC, but about estabilishing verifiable historical record of performed transactions. It is expected, that when value of one block will go down, miners will make profit from transaction fees.
  - lutorm 16y ago
    This is one thing that does seem to make sense: If mining isn't worth the return, then people will stop, and the returns will go up. It should adjust itself to whatever return people think is necessary to bother.

by corin_ 16y ago

contactdick 16y ago

Sounds like it's already happening - to quote construct "Some quick research shows a handful of big players in the mining market who have invested heavily in high-end GPUs for dedicated bitcoin mining, some with over 50 GPUs running 24/7 for months now. These guys are bound to have huge quantities of bitcoin they are eager to unload when the price is right. Meanwhile, news coverage is driving exploding popularity, which appears to be pulling the exchange rate sky high. On paper, many of these guys have become overnight millionaires just by running a bunch of computers 24/7."

corin_ 16y ago
I believe the idea is that mining was a solution for launching BitCoin, and that as BitCoin has become more popular, the value of mining has gone down, meaning that at some point (I don't know if it's already happened or not), mining won't be worth the returns.
- dfox 16y ago
  mining has to be worth the returns, because without mining the network will not work. It is not about generating BTC, but about estabilishing verifiable historical record of performed transactions. It is expected, that when value of one block will go down, miners will make profit from transaction fees.
- lutorm 16y ago
  This is one thing that does seem to make sense: If mining isn't worth the return, then people will stop, and the returns will go up. It should adjust itself to whatever return people think is necessary to bother.