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Open Source Radeon Gallium3D OpenCL Stack Adds Bitcoin Mining
hypnosec writes "The open-source Radeon Gallium3D OpenCL stack has been modified to support Bitcoin mining through the use of mining application 'bfgminer.' To mine Bitcoins using the open source GPU driver, one must use Tom Stellard's non-stock branches of Mesa, LLVM and libclc OpenCL library. Further, bfgminer must be patched as well. Once the patches are applied and modified code of the stack is used, users will be able to mine Bitcoins using the Radeon HD 5000 and Radeon HD 6000 graphics cards; however the cards have to be pre-HD6900 Cayman in case of the HD 6000 series."
Bitcoins in a rational market would cost only as much as they cost to make with perhaps a small premium.
Competition for commodities drives the market price down to near cost in a rational market. I wonder if increased competition will do that to this market as more and more way to mine get distributed. I doubt it though, but time will pop the bubble anyway.
http://venturebeat.com/2013/04/10/bitcoin-prices-crash-over-100/
Bye!
The mining biz is going to FPGA or ASICs
That's where the power consumption trade-off is best.
Bitcoins in a rational market would cost only as much as they cost to make with perhaps a small premium.
The supply is limited, so you can't just produce more.
doubt it though, but time will pop the bubble anyway.
What bubble? Plenty of people perform transactions using bitcoin to pay for goods and services every day and go away happy. How is that a bubble?
SJW n. One who posts facts.
That's Cayman as in Cayman Islands, right?
Sorry, I forgot there are ads on the Web; I use Lynx.
No, but time will.
The market is irrational because non-financial people are heavily invested in a currency market. They don't know it's not ok to do a sell order with a $250 trigger and a $150 minimum. It causes the market to crash if it hits $250 when you own 250,000BTC...
as easy as all that, wow. Say I didn't watch to apply patchs and modify some code, how easily can I start mining bitcoins?
does this mean that my $50 Radeon HD 5450 1GB 64-bit DDR3 PCI Express 2.1 x16 can mine bitcoins and blocks and stuff? it will probably take weeks or months to find a block though. lol
So they are all mined out?
Then what are the big miners doing with all those ASICs?
You can still mine Bitcoins, so they should not ever cost more than it costs to mine another one.
The bubble is the absurdly high price vs the cost to mine/create one.
I didn't look, don't know if they addressed it. I setup a miner a while back (should have kept it going...damn). What really took the most time setting it up, was that I didn't know it couldn't be done without a desktop running!
If I build a compute node, the last thing I want on it is a desktop. I don't want to have to login and start up the program....I want it to run on a headless box, and start from init.d or whatever the kids are using after I chase them off my lawn.
"I opened my eyes, and everything went dark again"
The supply is limited, so you can't just produce more.
The system has a limit built in, yes, but production is not meant to completly cease for quite some time still. It will simply get exponentially harder, which will increase the bitcoin actual, objective worth (which is currently far, far below its going price).
What bubble? Plenty of people perform transactions using bitcoin to pay for goods and services every day and go away happy.
Plenty of people perform illegal transactions. Extremely few, from an economic standpoint, legitimate goods are being traded for bitcoins.
How is that a bubble?
This is a bubble, because Bitcoins have NOT gained sufficient traction to be a serious currency; they are a mere commodity. Since a commodity is being traded for far,far more than its objective worth (the work involved in producing it, i.e. the hashing) it is a bubble and a rationnal market will drive the price down.
Bitcoin is not immune to basic economics, no matter how rose-colored your glases are.
#!/bin/bash
for submission in ${submissions[@]}; do
if [ ! -z `echo $submission | grep -i "Bitcoin"` ]; then
post $submission;
fi
done
while [ 1 ]; do echo -n -e "\xe2\x95\xb$((($RANDOM&1)+1))"; done
As each bitcoin is "mined", it becomes more work (and more expensive) to "mine" the next one. As long as this difficulty increases faster than the decrease in compute cost then the cost of mining another one will increase over time.
> What bubble?
"Those who fail to learn the lessons of the past are condemned to repeat them."
http://www.activemanagersresource.com/images/TI/anatomy-of-a-bubble.png
--
"EVERY civilization eventually collapses."
What bubble? Plenty of people perform transactions using bitcoin to pay for drugs and "services" every day and go away "happy."
You had a typo and forgot some punctuation.
With two 5830's in XFire I can hash at 520 MH/s, will this increase that?
Hmm, let's test your thesis the really simple way
Dollars/Euros/Rand in a rational market would cost only as much as they cost to make with perhaps a small premium.
Lesson: A medium of exchange (aka currency) is NOT necessarily a commodity.
Scarcity of the commodity vs. demand for the commodity drives the market price up or down in a rational market. I wonder if increased competition will do that to this market as more and more way to mine get distributed. I doubt it though, but time will pop the bubble anyway.
Lesson: I produce very few boogers, so they are scarce, BUT, importantly, there is to my knowledge zero demand for my boogers, so they have no value whatsoever. The number of bitcoins that will ever exist is finite (21,000,000), if the demand for them goes up, so will their price (or "value" if you wish to call it that).
No those are currencies, not commodities.
You cannot right now produce legal USD or Euro. You can produce bitcoins though. Once all the bitcoins are mined then you will be right, but for now there is no scarcity at all.
Bitcoins in a rational market would cost only as much as they cost to make with perhaps a small premium.
They are probably mined as much as is economical to do. The main sign that this is happening is that mining without the latest generation of GPU is uneconomical. Any short term speculation that drives the price higher just makes it a better deal to mine more.
At the other end it's easy to imagine a situation where bitcoins aren't useful enough to be worth mining and the price drops below the cost to make them. As long as they're convenient for illegal transactions this won't happen.
What bubble? Plenty of people performed transactions for houses in 2006 and went away happy. How was that a bubble?
What bubble? Plenty of people performed transactions of dot-com stocks up through early 2010 and went away happy. How was that a bubble?
So they are all mined out?
Won't happen: the supply rate decreases over time and approaches but does not reach zero.
The bubble is the absurdly high price vs the cost to mine/create one.
How much is the cost? It's gone up a lot. You have to buy either a stack of cards (expensive) and a lot of electricity, an FPGA (hugely expensive) and a moderate amount of electricity or an ASIC (if you can even find one) and a small amount of electricity.
If I wanted to purchase something in bitcoins, the easiest thing to do, also factoring in the value of my time is to buy some on MtGOX and then use them.
SJW n. One who posts facts.
Hey, people love tulip bulbs. They will never not love tulip bulbs.
Now that Bitcoin's crashed horribly this is a great time for Slashdot to start posting fawning, uncritical articles about this massively pointless 'currency' to pump the value back up with hype.
What bubble? Plenty of people perform transactions using bitcoin to pay for goods and services every day and go away happy. How is that a bubble?
People bought and sold houses during the housing bubble, and used dot-com companies every day in the dot-com bubble. Use has little to do whith being a bubble or not. The notion of a "bubble" is where the price of a commodity far exceeds its actual value. Yes, this can even apply to foreign currency like bitcoins. People are buying bitcoins more as an investment than for actual trade, so the price climbs higher, making everybody happy.
Then something happens. A few more big thefts, or a flaw in the protocol is discovered, or an economic externality makes people sell off just a few coins at less-than-market price, so they're sure to sell quickly. Other investors see the price fall, and they worry about the bubble starting to burst, so they sell quick, too... and that makes the price drop more, and the cycle repeats, sending the price crashing back to a price on par with its actual value.
The problem is that Bitcoins have very little intrinsic value. The value of national currencies is based on the stability ogf the government backing it, ultimately reflecting the currency's use for paying taxes and other government charges. Bitcoin isn't backed by a government, though, and even the prices for day-to-day trade are effectively just national currencies with an exchange rate and transaction fees applied. When the bubble finally bursts, Bitcoins' value will hover around the cost of the electricity & equipment to mine them, so investors can write off the purchase as a slight loss or slight profit.
Like all bubbles, there are some get-rich-quick millionaires who made a fortune getting in early, but their money will effectively come at the expense of those who come in later, buying the bitcoins they're selling off. Someone's always left holding the bag.
You do not have a moral or legal right to do absolutely anything you want.
It will simply get exponentially harder, which will increase the bitcoin actual, objective worth
Does that not sound like a pyramid scheme to you?
The people on the ground floor get rich, everybody else does a lot of work for practically zero return.
Then there's the manipulability of the 'price' of bitcoins. All it takes is a story on the web to crash the price (see story earlier today), then another story will bring them right back up again - there's no regulation so insider trading carries no penalty! Does that sound like somebody, somewhere might be ripping people off? It sure sounds like it to me.
The more time passes, the more I suspect bitcoin is just a clever con game deigned to make the creators very rich.
No sig today...
Since it's not mentioned, it probably is...
Bitcoin clients are not doing work as you say. Even SETI is at least doing something logical, albeit looking for a needle that may not exist or communicate in any way like we do in an infinite haystack.
Bitcoin uses up technology that would be better used on important distributed computing projects like big data for the people or gene sequencing. It merely creates another fiat currency, or the equivalent of one, only its not even viable as an alternative currency.
Such a shame..
That's not exactly right. You aren't producing the bitcoins, the chain is. You're simply awarded bitcoins for doing work. Not once in this transaction do you ever actually create the coins. Besides, bitcoins are being made a a far slower rate than the USD or Euro.
So far that's been the case, but that does not mean that it has to be. Most of the things which have caused previous civilizations to collapse have been dealt with, the only thing that's possibly going to cause it would be asteroid hit or stupidity of the masses.
Semantics. The coins do not exist in the market until the mining is done.
There are far more people who want USD or Euros, nor does anyone do fractional reserve banking with bitcoins.
Someone suggested Bitcoins should be called Dunning-Krugerands given the sort of people who think "investing" in this scam is a great idea.
How much is the cost? It's gone up a lot. You have to buy either a stack of cards (expensive) and a lot of electricity, an FPGA (hugely expensive) and a moderate amount of electricity or an ASIC (if you can even find one) and a small amount of electricity.
You can also build a particle collider and turn lead into gold, but that doesn't raise the price of gold to a few billion dollars per ounce. The cost that matters is the cost of people's effort to get a Bitcoin. If people are actively hoarding Bitcoins, the price rises until a cheaper long-run investment is to buy the mining equipment. If people are selling off Bitcoins, then the cost that matters is what they're selling them for.
You do not have a moral or legal right to do absolutely anything you want.
I wonder how many megatons of CO2 will be put into the atmostphere due to people mining bitcoins by the time it's no longer profitable.
I just checked a comparison of mining hardware and a mining profitability calculator. In essence, with the current prices ($120 last checked), GPUs are no longer profitable but a dedicated ASIC will pay itself back in less than a year even at $3/bitcoin.
Incidentally, I just realized how space based solar power could transfer the energy down to Earth. Just mine bitcoins in space, transfer them down and buy the electricity here.
Someone suggested Bitcoins should be called Dunning-Krugerands given the sort of people who think "investing" in this scam is a great idea.
So you're a professional economist then? Most people I've heard mention the Dunning-Kruger effect are other amateurs who read about it on Wikipedia and now consider themselves experts on the subject.
GPUs are nice and all, but 90% of the bitcoin mining market is now done by custom ASICs.
Heh, compare.
Now let's see where it goes next.
Bitcoin? Really? I thought news is information that someone cares about. 10 years from now people will chuckle or roll their eyes at the thought of Bitcoin. In 20 years, people will go "huh?" --JSt
When the bubble finally bursts, Bitcoins' value will hover around the cost of the electricity & equipment to mine them, so investors can write off the purchase as a slight loss or slight profit.
You have it backwards. The price cannot be much higher than cost of mining. That's ludicrous. It can be lower though.
What keeps this bubble growing is that the mining cost increases at an exponential rate. However, there will be some point it becomes obvious that the value will be permanently lower than the cost of mining. The mining will effectively stop then and then you'll see the real burst.
Having the price follow mining cost would be an extremely desirable property, though. You'd get that e.g. with an infinite supply of mineable coins. The problem is that you can't make cash quick with such a system :)
"The problem is that Bitcoins have very little intrinsic value."
You could say this about many currencies - the US Dollar is made of paper, which has little intrinsic value. But if by intrinsic you mean backed by a philosophy and institution with coherent standards and ethics and a means of enforcing them - ie a gov't, then by that measure bitcoin arguably has more intrinsic value than the dollar, hence the rush to own them.
Bitcoin's value emerges from the philosophical and technical grounds on which it is constructed. Like any currency, it is an abstraction of wealth, but unlike others it is decentralized, and difficult if not impossible to forge or spoof. It has the backing of "The Internet", in other words the new global information order, which is quite a powerful institution indeed. I would say Bitcoin has quite a lot of intrinsic value in this sense.
They need to make a minecraft add in that allows you to mine bitcoins in game, so you can actually have a job mining bitcoins...
I wonder what the OSHA rules on Creepers would be....???
but for now there is no scarcity at all.
Then why don't you just drum up a few hundred thousand bitcoins and sell them? You'll be bloody rich, AND you will have the pleasure of crashing BitCoin market and show everyone how right you are and how wrong they were.
From here:
Currently, 25 bitcoins are generated every 10 minutes. This will be halved to 12.5 BTC within the year 2017 and halved continuously every 4 years after until a hard-limit of 21 million bitcoins is reached within the year 2140.
To compensate for increasing hardware speed and varying interest in running nodes over time, the proof-of-work difficulty is determined by a moving average targeting an average number of blocks per hour. If they're generated too fast, the difficulty increases.
So the supply is rather fixed globally. If the demand is higher than the supply, there will be scarcity, and prices will rise. They might bounce up and down while the market adjusts, but as long as the demand is higher the average price will rise, until it's high enough that the demand is at the same level as the supply.
It's The Golden Rule: "He who has the gold makes the rules."
When the bubble finally bursts, Bitcoins' value will hover around the cost of the electricity & equipment to mine them, so investors can write off the purchase as a slight loss or slight profit.
- disclosure (if you need it), from my point of view gold is the real money, not US dollars, not Bitcoins, not Euros, not any fiat.
however
I disagree with your premise that Bitcoins have no intrinsic value (just like I disagree with the notion that gold doesn't have intrinsic value, it obviously does or that the US dollar has intrinsic value, it obviously does not)
Bitcoins do have intrinsic value, which is tied to the value of the Internet or generally networking and being able to pass information around computer networks.
What is the value of Bitcoins? Ability to transfer purchasing power almost instantaneously from one part of the world to any other without suffering any government and banking regulations, delays, banking uncertainty in general.
The ability to transfer money around without it being subjected to various government controls is the intrinsic value. Now, can it be taken away? I suppose it can be reduced by governments of the world uniting to crash Bitcoins by attacking the exchanges.
So exchanges will have to operate in the black market rather than in the open, but exchanges cannot be destroyed or controlled, some will, but there will be many of those that will satisfy the market need to transfer purchasing power around.
Notice that there are stores that sell in Bitcoins but they also often cite the current exchange rate to whatever currency and they take a little commission to cover the fluctuation or maybe there is some cost of doing business via an exchange for a merchant.
What do you think they do? They have an account on an exchange, the moment they get a Bitcoin as part of a transaction they transfer it to an exchange and get some of their preferred currency deposited into their account with the exchange instead of the Bitcoins. But that means Bitcoins are like VISA only it's without debt and it's better from POV of transaction costs and regulations obviously.
Bitcoins do have value and it's different from what you propose.
You can't handle the truth.
Please define "Plenty"; because I don't think it means what you think it means.
Someone's always left holding the bag.
Maybe, but if the bag is small enough then it doesn't matter.
Imagine that there was only a single Zimbabwe dollar bill. The way people trade is to move that single dollar bill round very very very fast. $1e9 trades have been made but when it suddenly loses all its value, the person at the end was holding a $1 bag, and they've lost a tiny bit.
My point is what matters is how much bitcoin is used for trading versus how much is used for investment (i.e. hoarding).
If bitcoin the amount of money that has circulated around the bitcoin network is substantially larger than the amount of money instantaneously stored then basically there is not much of a bag to be left holding. I.e. the amount of money lost will be vastly smaller than the amount of successful transactions performed.
Of course, the relative sizes count a lot.
But yes, there is significantl volatility which means some people will make money and some will lose, especially "investors". The people just involved in circulating them round and round will still happily buy stuff.
SJW n. One who posts facts.
No, it doesn't sound like a pyramid scheme at all.
Newcomers aren't paying anything to existing members, there's no downline or referral type scheme, and there's no recruitment requirements.
It's more like someone who bought into a tech stock early. They had the foresight/luck to be an early adopter and are now being rewarded for it.
"Energy is the currency of the future." --CEO Nwabudike Morgan, "The Centauri Monopoly"
A currency based on something solid, pretty much impossible to fake, and hard to get confused about. Compare that to national currencies base on different people's varying fuzzy perceptions of the stability of the issuing government. Sounds pretty good, actually.
I think you're right (it'll stabilize at that price) but others think it'll deflate. This'll be interesting to watch. And damn useful to have a pocket change, for those usenet server subscriptions which don't take paypal anymore.
Bitcoins in a rational market would cost only as much as they cost to make with perhaps a small premium.
You mean like US $20 bills, which cost 7.5 cents each to print? Or more like pennies (worth 2.5 cents of copper) or nickels (worth 7 cents of copper)?
Though ironically enough, as an unregulated market, Bitcoins do have a value near their production cost, as measured in electricity. As the difficulty goes up, people switch to more energy efficient mining techniques (from CPU to GPU to ASIC) or quit mining altogether as it becomes unprofitable.
The price can easily go far higher than the cost to mine. Consider gold. It costs well under $1000 for a large-scale mine to produce an ounce of gold, but because people are willing to pay a high price (hovering around $1500/oz) to get it now, the price is higher. It's the same with Bitcoins. People want them now, so the price risees. What keeps the bubble going is hype, making people want to get coins as quickly as possible, before the price rises even further.
You do not have a moral or legal right to do absolutely anything you want.
So you talk to a lot of professional economists on the internet? Do tell!
As an aside to this, I noticed when I was researching Bitcoins, that there will at some point be a transition from being rewarded for creating money to being rewarded for computing transactions. At that point, the people with the massive computing power are going to have incentive to throw at least some of these Bitcoins into the market just to generate more trade volume.
I mean value that won't diminish over time. As long as the US government accepts taxes at a certain rate with the dollar, the dollar will have some use. There's a reason to keep some dollars on hand. This is the intrinsic worth of any currency: The promise that if you accept it, you'll be able to spend it again later for something equitable. All currency is just an intermediate step in bartering. I sell my skilled labor today for my dinner next week, but in the middle I get a paycheck.
Bitcoins, though, have nothing that uses them naturally. Stores accepting them now use them as just a surrogate for other curriencies, so there's no reason to keep them on hand. Just convert what you need at the time of purchase, and never worry about a bubble bursting and losing the value of everything you've saved. Of course, if you have no reason to keep Bitcoins on hand, neither does anybody else, so why even accept them in the first place?
And that boils down to the only intrinsic wealth that Bitcoin has: its anonymity. Supposedly it's untraceable, which makes it valuable for those who care about having untraceable commerce, but that means the aforementioned promise of future use is limited to a small number of people. For most people, they're inherently worthless, being currently only an investment vehicle ridign a bubble.
You do not have a moral or legal right to do absolutely anything you want.
Same thing happened with gold and diamonds. Imagine that.
You don't have to be a professional economist to recognize that a "currency" that collapses and loses half its value in the space of minutes is a bad investment.
1. Lower performance than proprietary drivers? No miner in their right mind will use this OpenCL mod.
2. FPGA and ASICs are quickly relegating GPU mining to the scrapheap.
3. Fuck bitcoin.
4. That is all.
Bitcoin's exchange rate against the USD has no bearing on its utility as a token of exchange.
With fast enough exchanges and sufficient enough liquidity ("enough" being the key word) the total amount of Bitcoins in circulation doesn't even have a large impact on trade volume. Bitcoins don't get consumed in the process of trading.
Therefore I don't see how those with massive computing power (for generating income through transaction processing) benefit by selling previously-hoarded coins. If anything they benefit by not selling their coins, maintain artificial scarcity and thus high exchange prices since they get paid in coin.
- disclosure (if you need it), from my point of view gold is the real money, not US dollars, not Bitcoins, not Euros, not any fiat.
Bitcoins do have intrinsic value, which is tied to the value of the Internet or generally networking and being able to pass information around computer networks.
What is the value of Bitcoins? Ability to transfer purchasing power almost instantaneously from one part of the world to any other without suffering any government and banking regulations, delays, banking uncertainty in general.
How's the weather there on Mt. Stupid?
Thinking gold is a viable currency is an indication that you don't understand economics. You should avoid commenting on economic matters until you at least understand why I would say that.
Intrinsic value means value other than as a trade good. Your claim that Bitcoin's value as a "unregulated currency" even if accurate does not mean it has intrinsic value. That you would use the jargon this incorrectly further indicates that you probably don't understand what you're talking about. This is in addition to your unstated assumption that governments can't regulate bit coin which is completely unsubstantiated (especially since bitcoin relies on their existing a digital paper trail for the history of every bitcoin from it's creation through it's current owner.)
In short, STFU before someone less informed thinks you know what you're talking about and forms an assenting opinion thereby propagating you idiocy.
If you're only investing based on risk with no regard for return, then every investment is worse than guaranteed fixed-rate funds. High-risk investments like this are part of a balanced portfolio, and for everyone who didn't just greedily pile on the latest bubble it's still a profit anyways. Did you expect after FinCEN recognized digital currencies, the price would simply raise to the correct number but no higher - with no correction?
Scare quotes around "currency" is fair, though - I'd agree at the moment it's behaving more like a commodity.
I'm not the layman accusing an entire market of the Dunning-Kruger effect.
Sorry, but the risk of bitcoin is right up there with "pyramid scheme" or "ponzi". Unless you were somebody who had bitcoins before the hype and chose the precise moment to exit, you are not going to see any return. That is because there is nothing to "invest" in.
Until someone decides to sell, then the bubble pops.
Go try and make your own $20 bills.
Bitcoins now consume $100+ of electricity to make?
That only makes me think worse of them.
“Two things are infinite: the universe and human stupidity; and I'm not sure about the universe.” - Albert Einstein
There is an article on the USA Today site regarding Bitcoin, what it is, and today's crash. USA Today is about as mainstream of coverage as you're going to get, so I would expect other mainstream newsources' articles and reports to be similar.
I read its tone as implying a $10 per bitcoin value (or less) as the norm with the recent spike attributed to horders and speculators that are purchasing coins. That article also mentions a boom/bust in 2011. However it also makes the case that the increasing difficulty at producing new bitcoins and the ultimately fixed number of bitcoins will continue to encourage hoarding rather than using bitcoins. As bitcoin reaches the conciousness of more people I would expect volitility to continue with many booms and busts.
I feel that as a product it is grossly overvalued at $120, but don't see any rationality on the horizon. I have little doubt that the price will climb again as new speculators get in line to buy en mas and crash as the old speculators cash out en mas.
"The Adobe Updater must update itself before it can check for updates. Would you like to update the Adobe Updater now?"
Someone suggested Bitcoins should be called Dunning-Krugerands
ROFL. Sorry for a flag-post, but that is just wonderful!
Sorry, but the risk of bitcoin is right up there with "pyramid scheme" or "ponzi".
IF you were so positive about your analysis, why were you not in short? Doubling your "investment" in a mater of minutes sounds pretty good to me.
According to your view of the world Picasso's paintings should all cost, oh, about $500 bucks. All 1983 Bordeauxs should cost about $7. All circa 2006 mansions in las vegas built for $1MM (now selling for $500k), should always sell for $1MM. You need to take econ 101. Actually, just about everything in your post is incorrect.
>> The problem is that Bitcoins have very little intrinsic value. The value of national currencies is based on the stability ogf the government backing it, ultimately reflecting the currency's use for paying taxes and other government charges.
There is no intrinsic value to any fiat currency (except maybe as a fuel to burn). The value of national currencies is NOT based on the stability of the government, it is based on supply and demand for the unit of currency. People want dollars because they are rare, simple as that. Gov't reputation can screw with the stability of the currency by not being dependable on the supply side of the currency, but that is different.
Bitcoins won't fail due to a bubble. Maybe not even a hack. They will fail for basically the same reason any fledgling currency of any new country fails: instability. And you're seeing it now -- a pizza that cost once 10k bitcoins now costs 1/15th of one. These are MASSIVE stability swings. There is no stability. The buying power of a bitcoin is, and as far as I can tell, will always be, subject to huge swings. Why? Because there is no mechanism by which supply can ever be calibrated to demand. There are a max of 21MM coins -- that's it, can't expand, ever. Bitcoins will always be a type of speculation / bet -- which is interesting, to be sure, but fails the test for a good digital currency because a fundamental tenant of a good currency, a desirable currency, is it has relatively stable buying power.
But it is fascinating to watch. Bitcoin 1.0 just fundamentally lacks any design considration for price stability, that coupled with an artificially set 21MM total bitcoins, and it is like instability is actually baked into the design.
Bitcoin 2.0 should have a mechanism to improve price stability -- this is no trivial task, however, and if there are any econ folks out there I'd love to hear any ideas on this point. Would require approx equaling supply and demand, but evening knowing when you've done this is tricky.
Newcomers aren't paying anything to existing members
Computing power and electricity? Aren't half the people here trying to argue there is some intrinsic cost in the production of bit coins that add to their value?
Is anyone letting you short bitcoins? Would anyone in their do so with a currency that is supposed to have deflation built in to it?
-Wait, you are arguing that bitcoins have an intrinsic value because they are useful and/or convenient for a particular type of transaction. By your own logic then, the US dollar has intrinsic value too, because it can be used for certain other transactions. E.g. I can go to the market down the street and instantly get food without having to wait for it to come in the mail or let some one else pick out my fruit for me. I can use it to buy baked good from my neighbor who has no interest in such computer related things. The "intrinsic value"* of the US dollar is its purchasing power at many locations and with many people.
*(Disregarding your use of term "intrinsic value" is incorrect...)
Plenty of people perform transactions using bitcoin to pay for goods and services every day and go away happy. How is that a bubble?
The value of bitcoins has ranged between $25 and $250 within the last month. How is that not a bubble?
It will simply get exponentially harder, which will increase the bitcoin actual, objective worth
Does that not sound like a pyramid scheme to you?
No, actually that sounds like the *opposite* of a pyramid scheme. Pyramid schemes get exponentially harder to find new buyers for because the good they sell, membership of the scheme, becomes exponentially easier to acquire as the scheme grows, causing a crash of value of the memberships over time. Bitcoin becomes exponentially harder to acquire new coins over time, which should cause an increase in value. Or to put it another way: the problem with pyramid schemes is that they have no limit to their growth so eventually they grow faster than the demand for them. Bitcoin has a hard-and-fast limit to growth.
You don't have to be a professional economist to recognize that a "currency" that collapses and loses half its value in the space of minutes is a bad investment.
Shrug. I said a few weeks ago that the value of bitcoin seemed to be approximately correct at about $70-$80. If it's been higher in the interim, that's just because some speculators made bad purchase decisions. Chart... looks to me like the current value is about right and the recent highs were a bubble. I'd wait a little to see if the price drops further before making a buy decision, but now doesn't look like a good time to sell. Bubbles happen, but don't affect the validity of the underlying instrument.
Semantics. The coins do not exist in the market until the mining is done.
Not semantics. You can't produce bitcoins because there is nothing you or I can do that will change the number of bitcoins that exist in the long term. Sure, we could acquire a huge number of ASICs and start mining, and we'd likely accumulate a huge pile of them. But all this will do is move them out of the hands of others who would have acquired them, the total number of bitcoins generated will remain the same as if we had taken no action at all. Therefore we didn't produce anything, we just moved stuff around.
Bitcoins now consume $100+ of electricity to make?
No, the energy cost is about 20c. But the investment in hardware required to get them at that price is about $2500 and would need to be ammortized into your calculations of costs over a reasonably short period (as the viable lifespan of that hardware can probably be measured in months at this point of time).
Also:
Go try and make your own $20 bills.
Go try and make your own bitcoins. You can't: the network makes them at a predictable and (over the long term) fixed rate, and gives them as a reward to users who provide a particular service to the network. You can do all the mining you want, but it won't cause a bitcoin to be created that would not otherwise have been created anyway.
So if all mining stopped right now, new bitcoins will still be made? Who gets them if no one is mining?
The hype started on March 20th when FinCEN announced how they would handle virtual currencies. By "the precise moment" for a return do you mean at any time since, even at this moment during a major crash?
If you don't think an unblockable fraud-proof international money transfer system is something to invest in, I can't help you. Thank you for your feedback.
Absolutely. You can do it right now, and people do so because the deflation from actual growth is currently dwarfed by instability.
Bitcoin will not succeed until it's pegged to OPEC oil.
https://en.wikipedia.org/wiki/Nixon_Shock
Casteism
So if all mining stopped right now, new bitcoins will still be made? Who gets them if no one is mining?
"Mining" a block just means taking the previous block's hash, adding a few fields to it and signing it with a new hash low enough to qualify at the required difficulty level.
It sounds somewhat misleading to say that the network will still "make" blocks in the absence of mining - More accurately, the network uses the difficulty parameter to target ten minutes as the average block creation time. Until someone mines the next block, it doesn't really exist.
So, in the absence of miners, the difficulty would drop over time (though only once the blockchain reached the next difficulty adjustment, every 2016 blocks) to the point that a solo modern CPU miner could sustain the network (at the lowest difficulty of 1, it takes 7MH/s to average one block per ten minutes).