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What happens to the price when only people with 500Ghash/sec+ can make coins next month? Early adopters are rightfully getting a nice reward now, but how do yo

by ck2 13y ago

What happens to the price when only people with 500Ghash/sec+ can make coins next month? Early adopters are rightfully getting a nice reward now, but how do you get "fresh blood" when the difficulty is off the chart unless you have several thousand dollars in hardware?

3pt14159 13y ago
You tell people they can buy things on the internet with bitcoins that they can't otherwise buy on the internet.
ye 13y ago
> What happens to the price when only people with 500Ghash/sec+ can make coins next month? What do you even mean? That's what pools are for. You can make bitcoins even with a shitty CPU (but will probably spend more on electricity).
- grimgrin 13y ago
  You cannot make bitcoins with a shitty CPU, or a shitty GPU. You can try, but the difficulty is too high, and is always increasing. If this is a new concept to you, imagine: When I first received my BFL Jalapeno (ASIC 5G mining rig) and started mining, to the time I sold it, the difficulty had increased enough that I was seeing a .05 BTC gain in twice the time. So now you can imagine how eventually only people above a certain mining speed will be profitable.
  - ye 13y ago
    > You cannot make bitcoins with a shitty CPU, or a shitty GPU. You can try, but the difficulty is too high, and is always increasing Yes you can. It's called pooled mining. http://mining.bitcoin.cz/ http://mining.bitcoin.cz/
    - Jach 13y ago
      You really can't. http://www.bitcoinx.com/profit/ http://www.bitcoinx.com/profit/ At the next difficulty estimate, an i7 with free electricity mining all the time at 8 MH/s would make about 9 US cents in a month. Since the difficulty will probably go up again in less than two weeks, make that less than 2 US cents per week. Since very few people actually have free electricity it's not worth it. http://eviltechmonkey.com/btc.html http://eviltechmonkey.com/btc.html
    - ye 13y ago
      @Jach: Seriously, you can. Just based on your comment alone: > an i7 with free electricity mining all the time at 8 MH/s would make about 9 US cents in a month This means at the current rate you will make 0.09/470 = 0.000191489362 BTC = 19148.9362 satoshi Oh, and the calculator you linked to is crap, it only gives 3 significant digits of BTC, which is quickly becoming relevant.
      - Jach 13y ago
        Okay, in the hypothetical world where 1 satoshi is worth some huge amount of USD more than it presently is, if you suck up the electricity cost now (which I believe would be less than $1 USD per day for an i7) you can get a few satoshi that may one day make that up-front cost worth it... Whether you can actually get a single satoshi from a pool is another story. If the pool uses PPLNS, you might not ever. I think most would object to you for being misleading. If you want bitcoins, buy them, or get an ASIC miner and don't use a sucky-ass CPU or GPU.
      - ye 13y ago
        @Jach: I specifically addressed electricity costs in my original comment. My point was, you can make BTC even with a shitty CPU. Whether it's worth it is a different question.
        humbledrone 13y ago
        By the calculations above, you would be far, far better off just buying Bitcoins on an exchange than you would be mining them with non-free electricity.
venomsnake 13y ago
You start a new blockchain with few million more of the late adopters.
deleted 13y ago
[deleted]
oleganza 13y ago
Difficulty does not affect the price at all. Bitcoins are produced at a more-or-less stable rate regardless of the amount of mining competition. In fact, before hashrate was that high a lot of investors' money was going into mining, not to exchanges (30% growth every 10 days over the last 6-7 months). As mining becomes more and more competitive, less money will go there and more to BTC holders, thus moving the price drastically. Edit: typos and more clarity.
Jach 13y ago
wat. The important figures for miners are the btc/usd conversion rate, the network difficulty, your hash rate itself, how much you initially paid for your rig ($/Gh) and how much power you're drawing ($/watt). All of these factors are important, but what will dominate over the coming months is power cost. Someone mining a 100 GH/s rig will make 5 times less BTC per day as someone mining a 500 GH/s rig, it's true, but if the 500 GH/s is sucking up proportionally more than 5 times the electricity then it can be better to mine with the lower hash rate. If the conversion rate improves that delays the period where electricity costs outweighs the income. For the difficulty to rise another order of magnitude (which would make BFL 60 GH/s Singles worthless), there needs to be about another 30 PH added to the network -- where's that coming from in only a month? In any case, people dropping their rigs because they're too power hungry may cause the difficulty to go down and make it worthwhile again for some who live in low-electricity-cost areas... There are variables you're not taking into account, hence the wat.
- ck2 13y ago
  That's the thing, the new 500Ghash machines can smoke your 500Mhash machines and they use only a little more power. They are using 28nm ASIC. A farm from a year ago can be completely outpowered by a couple of these machines. And they are coming online in force over the next 30 to 60 days.
  - Jach 13y ago
    Anyone with MH/s-level farms from GPUs have turned them off months ago (or moved to Litecoin). There's some new 28nm ASICs that use less power per hash than the larger nm ASICs, so eventually those will face the same fate as GPUs from power costs (not so much from hash rate -- there are only a few TH machines on the near horizon), but the next 30-60 days isn't enough time to make that happen.
    - ValentineC 13y ago
      Isn't Litecoin's value more or less pegged to BTC? I did a quick calculation with one of the online calculators [1] and it seems that it's a challenge to turn a profit from Litecoin GPU mining too. [1] http://ltc.kattare.com/calc.php http://ltc.kattare.com/calc.php
smokeyj 13y ago
You can buy shares in mining efforts.
polarix 13y ago
It turns out we might have enough miners for a while. No problem, time to beef up the exchanges and merchant systems.
wmf 13y ago
If Bitcoin is only about mining then it deserves to die. If Bitcoin wants to be an actual currency then it should be able to work like any other currency where you can't print money.

by ck2 13y ago

3pt14159 13y ago

You tell people they can buy things on the internet with bitcoins that they can't otherwise buy on the internet.

ye 13y ago

> What happens to the price when only people with 500Ghash/sec+ can make coins next month? What do you even mean? That's what pools are for. You can make bitcoins even with a shitty CPU (but will probably spend more on electricity).

grimgrin 13y ago
You cannot make bitcoins with a shitty CPU, or a shitty GPU. You can try, but the difficulty is too high, and is always increasing. If this is a new concept to you, imagine: When I first received my BFL Jalapeno (ASIC 5G mining rig) and started mining, to the time I sold it, the difficulty had increased enough that I was seeing a .05 BTC gain in twice the time. So now you can imagine how eventually only people above a certain mining speed will be profitable.
- ye 13y ago
  > You cannot make bitcoins with a shitty CPU, or a shitty GPU. You can try, but the difficulty is too high, and is always increasing Yes you can. It's called pooled mining. http://mining.bitcoin.cz/ http://mining.bitcoin.cz/
  - Jach 13y ago
    You really can't. http://www.bitcoinx.com/profit/ http://www.bitcoinx.com/profit/ At the next difficulty estimate, an i7 with free electricity mining all the time at 8 MH/s would make about 9 US cents in a month. Since the difficulty will probably go up again in less than two weeks, make that less than 2 US cents per week. Since very few people actually have free electricity it's not worth it. http://eviltechmonkey.com/btc.html http://eviltechmonkey.com/btc.html
  - ye 13y ago
    @Jach: Seriously, you can. Just based on your comment alone: > an i7 with free electricity mining all the time at 8 MH/s would make about 9 US cents in a month This means at the current rate you will make 0.09/470 = 0.000191489362 BTC = 19148.9362 satoshi Oh, and the calculator you linked to is crap, it only gives 3 significant digits of BTC, which is quickly becoming relevant.
    - Jach 13y ago
      Okay, in the hypothetical world where 1 satoshi is worth some huge amount of USD more than it presently is, if you suck up the electricity cost now (which I believe would be less than $1 USD per day for an i7) you can get a few satoshi that may one day make that up-front cost worth it... Whether you can actually get a single satoshi from a pool is another story. If the pool uses PPLNS, you might not ever. I think most would object to you for being misleading. If you want bitcoins, buy them, or get an ASIC miner and don't use a sucky-ass CPU or GPU.
    - ye 13y ago
      @Jach: I specifically addressed electricity costs in my original comment. My point was, you can make BTC even with a shitty CPU. Whether it's worth it is a different question.
      - humbledrone 13y ago
        By the calculations above, you would be far, far better off just buying Bitcoins on an exchange than you would be mining them with non-free electricity.

venomsnake 13y ago

You start a new blockchain with few million more of the late adopters.

deleted 13y ago

[deleted]

oleganza 13y ago

Difficulty does not affect the price at all. Bitcoins are produced at a more-or-less stable rate regardless of the amount of mining competition. In fact, before hashrate was that high a lot of investors' money was going into mining, not to exchanges (30% growth every 10 days over the last 6-7 months). As mining becomes more and more competitive, less money will go there and more to BTC holders, thus moving the price drastically. Edit: typos and more clarity.

Jach 13y ago

wat. The important figures for miners are the btc/usd conversion rate, the network difficulty, your hash rate itself, how much you initially paid for your rig ($/Gh) and how much power you're drawing ($/watt). All of these factors are important, but what will dominate over the coming months is power cost. Someone mining a 100 GH/s rig will make 5 times less BTC per day as someone mining a 500 GH/s rig, it's true, but if the 500 GH/s is sucking up proportionally more than 5 times the electricity then it can be better to mine with the lower hash rate. If the conversion rate improves that delays the period where electricity costs outweighs the income. For the difficulty to rise another order of magnitude (which would make BFL 60 GH/s Singles worthless), there needs to be about another 30 PH added to the network -- where's that coming from in only a month? In any case, people dropping their rigs because they're too power hungry may cause the difficulty to go down and make it worthwhile again for some who live in low-electricity-cost areas... There are variables you're not taking into account, hence the wat.

ck2 13y ago
That's the thing, the new 500Ghash machines can smoke your 500Mhash machines and they use only a little more power. They are using 28nm ASIC. A farm from a year ago can be completely outpowered by a couple of these machines. And they are coming online in force over the next 30 to 60 days.
- Jach 13y ago
  Anyone with MH/s-level farms from GPUs have turned them off months ago (or moved to Litecoin). There's some new 28nm ASICs that use less power per hash than the larger nm ASICs, so eventually those will face the same fate as GPUs from power costs (not so much from hash rate -- there are only a few TH machines on the near horizon), but the next 30-60 days isn't enough time to make that happen.
  - ValentineC 13y ago
    Isn't Litecoin's value more or less pegged to BTC? I did a quick calculation with one of the online calculators [1] and it seems that it's a challenge to turn a profit from Litecoin GPU mining too. [1] http://ltc.kattare.com/calc.php http://ltc.kattare.com/calc.php

smokeyj 13y ago

You can buy shares in mining efforts.

polarix 13y ago

It turns out we might have enough miners for a while. No problem, time to beef up the exchanges and merchant systems.

wmf 13y ago

If Bitcoin is only about mining then it deserves to die. If Bitcoin wants to be an actual currency then it should be able to work like any other currency where you can't print money.