3 ms·

I think that's the point though right? Its an arms race with a nearly perfectly efficient market that will (in the future) not be a get-rich-quick scheme for mi

by tibbon 13y ago

I think that's the point though right? Its an arms race with a nearly perfectly efficient market that will (in the future) not be a get-rich-quick scheme for miners. If there's profit to be made easily, the some people will react by mining more and then it 'fixes' the market. Assume that some people will act irrationally and mine inefficiently, or with the hope that the market will skyrocket- these people will bring the profit yield down to unprofitable levels by at least a few %. I liked mining with a GPU a while back, because I figured at least I could use the GPU for gaming as well and it just helped to keep me on the newer GPU cards with less guilt (since I want fancy GPUs, but almost never game so rarely use them).

joosters 13y ago
Not really. If you're trying to sell a bitcoin miner, you want at least the chance for the operators to make money. If you can take the specs of the box and calculate that you won't make a profit even if it was running right now, why would you buy it? The company selling them is going to do badly. It's like trying to sell shovels to gold prospectors, but for more money than the price of the gold that they'll dig up.
- tlrobinson 13y ago
  "It's like trying to sell shovels to gold prospectors, but for more money than the price of the gold that they'll dig up." I'm sure that has happened quite a bit in actual gold rushes. People aren't always rational, and no one really knows exactly how fast the mining difficulty will increase.
  - ssharp 13y ago
    I don't know anything about BitCoin mining, but is there a way to get lucky mining BitCoins where you stumble upon some BitCoins using less computing resources than you should have? In other words, is mining a process open to probabilities or is it a process where you churn through a finite and predictable number of calculations before you dig up a coin? I'd have to think one of the things that would lead someone to buy a shovel is that they could get lucky and dig up some gold. If luck isn't a factor in BitCoin mining, then you're not even giving yourself a chance to overcome a negative expected value situation. It's like better a dollar on BlackJack and instead of dealing cards, they just give you back 99 cents. Nobody would play that game.
    - tlrobinson 13y ago
      Yes, mining is probabilistic. The more hashing power you have the more quickly you're likely to mine a block, but it could take more or less time depending on luck. Most miners now participate in pools, which smooths out your returns by working together to mine blocks more regularly, which are then distributed based on the amount of work each miner contributed. If you "solo mine" it might take, say, 1000 days to mine a block, but if you pool mine with 1000 other miners it might only take 1 day, giving you 1/1000 of a block reward each day (minus pool fees), vs 1 whole block reward every 1000 days (on average).
    - wmf 13y ago
      There is luck involved, but it's pretty small. http://bitcoinchain.com/pools http://bitcoinchain.com/pools
- dragonwriter 13y ago
  > It's like trying to sell shovels to gold prospectors, but for more money than the price of the gold that they'll dig up. So, IOW, exactly like selling shovels to gold prospectors during a gold rush. Which is why the people selling shovels, or assaying services, or everything else that supports prospectors always, on average, do far better than prospectors during a gold rush. That changes when the rush starts to end and become more of a rational market.
- miahi 13y ago
  It's actually selling the shovel and the mining grounds, you just have to invest the time to use the shovel. A good question is: if the miner is so good, why don't they just use it and profit? This actually happens, as many bitcoin miner sellers only deliver them after a waiting time.
  - speeder 13y ago
    ASICMiner actually started as a company that would make their own ASIC to mine on their own. What they are doing, is profiting for a market that pay crazy rates on mining machines, by having profits on short term, but I think as soon selling them become less profitable than mining, they will switch back to purely mining.
- jessaustin 13y ago
  ...you want at least the chance for the operators to make money. If one is familiar with the apparatus of neoclassical economic theory, one might expect producers to want to maximize producer surplus at the expense of consumer surplus. That's possible to the extent that demand is fairly inelastic, and there are barriers (could be short-term!) to other producers entering the market.

by tibbon 13y ago

joosters 13y ago

Not really. If you're trying to sell a bitcoin miner, you want at least the chance for the operators to make money. If you can take the specs of the box and calculate that you won't make a profit even if it was running right now, why would you buy it? The company selling them is going to do badly. It's like trying to sell shovels to gold prospectors, but for more money than the price of the gold that they'll dig up.

tlrobinson 13y ago
"It's like trying to sell shovels to gold prospectors, but for more money than the price of the gold that they'll dig up." I'm sure that has happened quite a bit in actual gold rushes. People aren't always rational, and no one really knows exactly how fast the mining difficulty will increase.
- ssharp 13y ago
  I don't know anything about BitCoin mining, but is there a way to get lucky mining BitCoins where you stumble upon some BitCoins using less computing resources than you should have? In other words, is mining a process open to probabilities or is it a process where you churn through a finite and predictable number of calculations before you dig up a coin? I'd have to think one of the things that would lead someone to buy a shovel is that they could get lucky and dig up some gold. If luck isn't a factor in BitCoin mining, then you're not even giving yourself a chance to overcome a negative expected value situation. It's like better a dollar on BlackJack and instead of dealing cards, they just give you back 99 cents. Nobody would play that game.
  - tlrobinson 13y ago
    Yes, mining is probabilistic. The more hashing power you have the more quickly you're likely to mine a block, but it could take more or less time depending on luck. Most miners now participate in pools, which smooths out your returns by working together to mine blocks more regularly, which are then distributed based on the amount of work each miner contributed. If you "solo mine" it might take, say, 1000 days to mine a block, but if you pool mine with 1000 other miners it might only take 1 day, giving you 1/1000 of a block reward each day (minus pool fees), vs 1 whole block reward every 1000 days (on average).
  - wmf 13y ago
    There is luck involved, but it's pretty small. http://bitcoinchain.com/pools http://bitcoinchain.com/pools
dragonwriter 13y ago
> It's like trying to sell shovels to gold prospectors, but for more money than the price of the gold that they'll dig up. So, IOW, exactly like selling shovels to gold prospectors during a gold rush. Which is why the people selling shovels, or assaying services, or everything else that supports prospectors always, on average, do far better than prospectors during a gold rush. That changes when the rush starts to end and become more of a rational market.
miahi 13y ago
It's actually selling the shovel and the mining grounds, you just have to invest the time to use the shovel. A good question is: if the miner is so good, why don't they just use it and profit? This actually happens, as many bitcoin miner sellers only deliver them after a waiting time.
- speeder 13y ago
  ASICMiner actually started as a company that would make their own ASIC to mine on their own. What they are doing, is profiting for a market that pay crazy rates on mining machines, by having profits on short term, but I think as soon selling them become less profitable than mining, they will switch back to purely mining.
jessaustin 13y ago
...you want at least the chance for the operators to make money. If one is familiar with the apparatus of neoclassical economic theory, one might expect producers to want to maximize producer surplus at the expense of consumer surplus. That's possible to the extent that demand is fairly inelastic, and there are barriers (could be short-term!) to other producers entering the market.