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Bitcoin Miners Bail, While Cryptocurrency Capitalization Drops 83% Since January (coindesk.com)
"Bitcoin miners hit hard by the cryptocurrency's crash may be throwing in the towel," reports Bloomberg:
The Bitcoin network's hash rate, one way of gauging the computing power dedicated to mining the digital currency, dropped about 24 percent from an all-time high at the end of August through Nov. 24, according to Blockchain.com. While the decline may have partially resulted from miners switching to other cryptocurrencies, JPMorgan Chase & Co. says some in the industry are losing money after Bitcoin's price tumbled. "This suggests that prices have declined to a point where mining is becoming uneconomical for some," JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in a Nov. 23 report, in reference to the falling hash rate...
The break-even cost to mine a single Bitcoin using Bitmain's Antminer S9 rig was estimated at $7,000 in a Nov. 16 report by Fundstrat Global Advisors, though the level is probably lower for some miners with access to cheap electricity and equipment... A big miner shakeout could be bad news for chipmakers including Taiwan Semiconductor Manufacturing Co. and Nvidia Corp. who supply the industry, along with mining-rig designers like Bitmain Technologies Ltd. that are pursuing initial public offerings.
The price of bitcoin dropped 37.4% just in the month of November -- its worst monthly decline in seven years, since August 2011 when it fell from roughly $8 to $4.80. And the decline in bitcoin also dragged down 24 of the top 25 largest cryptocurrencies, reports CoinDesk. "What's more, the average performance of the top 10 cryptocurrencies by market capitalization was -30 percent, while the average performance of all 25 was -37 percent..."
"The total capitalization of the cryptocurrency market has now lost over $690 billion and 83 percent of its value since reaching its all time high north of $820 billion this past January, according to CoinMarketCap."
The break-even cost to mine a single Bitcoin using Bitmain's Antminer S9 rig was estimated at $7,000 in a Nov. 16 report by Fundstrat Global Advisors, though the level is probably lower for some miners with access to cheap electricity and equipment... A big miner shakeout could be bad news for chipmakers including Taiwan Semiconductor Manufacturing Co. and Nvidia Corp. who supply the industry, along with mining-rig designers like Bitmain Technologies Ltd. that are pursuing initial public offerings.
The price of bitcoin dropped 37.4% just in the month of November -- its worst monthly decline in seven years, since August 2011 when it fell from roughly $8 to $4.80. And the decline in bitcoin also dragged down 24 of the top 25 largest cryptocurrencies, reports CoinDesk. "What's more, the average performance of the top 10 cryptocurrencies by market capitalization was -30 percent, while the average performance of all 25 was -37 percent..."
"The total capitalization of the cryptocurrency market has now lost over $690 billion and 83 percent of its value since reaching its all time high north of $820 billion this past January, according to CoinMarketCap."
Ha ha
It will bounce back. Guaranteed. The same thing happened with Flooz in the 1990s.
Most crypto projects can't be mined with Bitcoin ASICs, since they only handle one hash algorithm. It's not like people mine Bitcoin with GPUs.
Some of these mining operations are consuming tremendous amounts of power. When they suddenly go backrupt overnight the second it becomes unprofitable to mine then the power companies are left holding the bag. That will leave a really bad taste in their mouth the next time a mining operation starts up. It'll probably turn to a cash up from for the power which will mean even fewer large scale mining operations will be possible.
Not all Cryptocurrencies are doomed, but All cryptocurrencies based on "proof of work" are doomed. Here's the analysis.
The sole purpose of proof of work is to make a double-spend impossible in a distributed (no centralized authority) system. In a distributed system, multiple ledgers might exist so the rule is the longest blockchain ledger trumps any other. With this rule the only way a cheater can spend a coin, get the benefit of the transaction, then after the fact erase the expenditure from the transaction is if they can using their own CPU power extend the pre-spend ledger faster than the post-spend ledger is being chained by the collective cpu power of the community. This is often dubbed the 51% attack. In real life it take more than 51% or a dose of good luck to make it work, but 51% is a good name for it.
No DISTRIBUTED cryptocurrency can exist if it does not solve the double spend problem. Many use proof of work.
How does proof of work do this? Well it doesn't work if the cost of getting 51% of the collective CPU power is less than the profit you can make by re-writing the ledger successfully.
Proof-of-work therefore has to adaptively adjust the cost of doing that so that the amount of money being transacted is always less than the cost someone wold incur for confidently performing a 51% attack.
You can imagine a lot of ways of doing that adaptation, bit coin has an approximate one built into it's growth rate and hash rate.
How good the approximation is, is less important than the bottom line: No cryptocurrency can survive long term if it is vulnerable to a 51% attack, and so the proof of work cost must grow with the transaction volume.
This means the costs of operating any system based on that principle is doomed to collapse in heat death as it grows beyond practical size.
If you want to have a viable cryptocurrency, then you need to come up with some clever system that impairs the double spend problem without proof of work. Alternatively you need to rig things so that the 51% attack does not scale lineary with the number of CPUs you have. (this might be rule based such as voting cheaters off the island, but that particular solutions isn't it because it just moves the problem somewhere else not solving it)
Some drink at the fountain of knowledge. Others just gargle.
In all seriousness, you should probably seek some help.
No matter how far the price drops, remember that the price can never drop bellow the implicit value of a bitcoin. Oh wait, never mind!
wat?
Imaginary Property / Imaginary Currency. Just like video games - use a lot of electricity and processing power to accomplish exactly nothing. At least the video game entertains someone though.
try googling: COIN site:mil or COIN counterintelligence or COIN counterinsurgency... You can read about it, but "knowledge" is not that important as far as lulzboats go. It's not what you know or who you know. It's about exploiting what you don't know.
try looking at google images "bit" + "horse". read about it https://en.wikipedia.org/wiki/Bit_%28horse%29
nt
Something that appears to me to be unintelligible gibberish obviously is insightful and important.
I have to go back to work as reviewer and editor for the Journal of Gender Studies for Misanthropic Lesbian Identified Women.
I'm currently reviewing a paper that marvelously analyses the relationship between male nano-agressions, women's assertiveness and the horsepower of pickup trucks. It's showing a .99 correlation between all three. This is be profound!
...and just like the gold rush of 1849....
Make 'murika Greedy Again
You know, it wouldn't surprise me if someone developed a "tinfoil hat conspiracy" AI bot to troll slashdot. After all, there isn't much depth or complexity to those nutters, and extra random syntactic noise just enhances the effect.
Between cat grooming session, Ernst Stavro Blofeld arranges to take delivery of all the diamonds in the DeBeers vaults after paying in bitcoin. As his trucks drive off with the purchased diamonds, an unexplained nationwide power failure ripples across china. It only lasts ten minutes. And then power is restored. It is traced to a faulty decision at a load balancing station that drove the grid to instability and causing every power plant to take itself off line to protect itself. While the power is down, 99% of all the bitcoin miners are offline. It's impractical to use UPSs for bitcoin mining since they are so power intensive. Worse, most miners outside china were getting their blockchain publications to and from nodes in china so they are effectively shut out of the chain extension process too. Meanwhile Blofeld contracted with AWS for a relatively modest amount of surge CPU power to re-write the ledger are 0.01% of the cost. And somehow Debeers never received payment at all.
Blofeld can then both crash the economies of nations, buy islands for missile launching, destabilize the value of diamonds leading to the destruction of marriage, and dress his cat in a diamond Liberace outfit.
Some drink at the fountain of knowledge. Others just gargle.
Very strangely, the parent's mod score has been going up and down rapidly. It's clearly a well reasoned and isightful post worthy of being supported or refuted in the comments. Yet instead of comments it's being modded down.
Must be all those bitcoin cartels.
So..... is this a good time to roll-over my Beenie Baby investment into Bitcoin?
Meanwhile, the money I have in Bank Of America and Chase are still worth pretty much exactly what they were worth yesterday.
Just cruising through this digital world at 33 1/3 rpm...
I wonder if anybody has been raided because the cops thought they were going weed only to find out they were bitcoin mining?
You know, it wouldn't surprise me if someone developed a "tinfoil hat conspiracy" AI bot to troll slashdot. After all, there isn't much depth or complexity to those nutters, and extra random syntactic noise just enhances the effect.
No. You can't troll the troll. Slashdot itself is military deception operation of the rainbow fairies from the crypts of tar budgets of brexit empire of red, white and blue axis of Dr Evil. You know kumbaya and community etc is a cover serving for operation of so called intelligence fusion center. It doesn't mean that automatically everyone involved with slashdot is an adversary as anything in CIA lemon party gestapo can be used as bait for targeting purposes. You know targets tries to join "us" looking for something that is not there: you're with us or with the terrorists. You know in this regard soot souls of projecting colored in rainbow men with tanned hats have unquestionable information superiority where they can be all you can be in the army of one and be better at that. Think about borat movie..
None of this means a whole lot in the many places around the world where they've started actually using bitcoin as a currency, you know, for real. And that userbase is growing. What you are seeing here is nothing more than growing pains induced by speculators with deep pockets.
Just like an open source project, bitcoin won't go anywhere. The ACTUAL core base will continue using it, once those speculators have bailed stability will return and when bitcoin is still around and has maintained stability for a few years a small amount of speculation will return and it will grow steadily for a few more. Then once again there will be an investment bubble but one that will be a little less extreme. Rinse and repeat, with everything growing more stable and consistent with each round.
With all the BTC, BCH and related forks, there's an infinite number of bitcoin-type stuff even if the original specification is capped at ~21 million or so. All that's needed is to create a new algorithm, and get enough people to sign on to it.
Someone creates a magical algorithm that allows transferring other people's bitcoins at will, while other cryptocurrencies are unaffected? Bitcoin gets killed, but at least everyone else can create their own currency system.
So you're claiming to be a science-background, but you don't have any science background AND you can't spell "realize"? Maybe there's too much plastic in your inert brain, you're confused.
You're no science-anything. You're just another Republican faggot lying on the internet to try to pretend trash everywhere is a good thing. You will hang soon enough.
First part of the last sentence is the one part you got right. Let's hope that you eventually realise that green dogma is anti-science sooner rather than later.
Of course, judging by the way you use language, your mental age is young enough that you can be forgiven for being an ignorant and opinionated twat. Just don't get old while retaining that kind of behaviour. What is forgivable at 20 is met with very harsh reaction at 40.
You know that you are the the one being perceived as the idiot here on /., right? And that does take some effort. Well done.
Go on, eat your plastic GOP. Doctor Luckyo says it's fine, and that's just SCIENCE.
Sudden Cryptocurrency Asset Management
This is what a financial bubble looks like after it pops. Should be no surprise to anyone who has studied the phenomenon. We had the dotcom bubble around 2000, and the housing bubble in 2007, and many more before that.
What a waste of electricity and the consequential effects on global warming.
The CPU arms race for bitcoin will be remembered as a spectacular late stage pump-and-dump. Blockchain is an okay idea without the egregious carbon footprint and there are alternatives. It's just an okay idea, however, and without the ability to rip off newbs and cheerlead in a jargon frenzy on Medium, the WSJ or where ever else suckers congregate we'll stop hearing about it soon.
Make no mistake HODLers:
When Bitcoin die, all cryptocurrencies will die!!!
Because they all created (& became popular) thanx to the hype for Bitcoin!
All the hype for them, comes from the hype for Bitcoin!
So, when finally no hype left to sustain the mother's life, all its offspring will die with it!!!
& the hype for Bitcoin is gone & will never come back!!!
So, HODLers:
Bitcoin/cryptocurrency shills would never honestly tell you how bad the situation really is!
When finally it becomes clear to everyone, Bitcoin will die for certain, its price would slam to $0 extremely fast!
(Meaning most people from public will never get any chance o sell for any price & end up w/ $0 at hand!!!)
So, sell ASAP!!!
Money laundering isn't a reliable source of revenue. Oh wait,...
Reading the comments its staggering to read how confused people are about what drives the crypto market and where a particular currency fits into the picture.
...realise that anti-science part of green movement is quite awful, and maybe even learn enough basic human courtesy to apologise for being an asshole in addition to being wrong on basic facts.
Until then, I fully expect you to spout your inane anti-science dogma as AC. Break a leg.
I'm a leading critic of this effect myself, but since we have only just started to identify microplastics in the human body the science isn't in yet on what effect it might be having in there. Is it dissolving? What might it be releasing? We can't assume it's harmless.
It's just like energy or climate: let science characterize the problem, and then stand aside and let engineers fix it.
Not all Cryptocurrencies are doomed, but All cryptocurrencies based on "proof of work" are doomed.
Cryptocurrencies are based on software, they can be changed. They can migrate from proof of work to other methods, Etherium has planned on doing so all along. Bitcoin and other coins could do so if necessary.
now the price of video cards should return to normal and the supply will be able to fill the demand
Politics is Treachery, Religion is Brainwashing
He went a step further and said "because it's inert there are NO POSSIBLE health effects" = Luckyo is not a science-anything, just a lying faggot. Nuff said.
Its not as if wall street types on CNBC didn't acknowledge previous massive drops in bitcoins history and conceded a drop to $4-5K was a real possibility .. oh wait. Many knew/know it is a "greater fool" game, they just don't expect to be the greater fool themselves.
I would really like to know what are the total profits and losses of the whole bitcoin thing.
Take any person or company who invested in bitcoin by buying or by mining, take how many dollars they got by selling bitcoin, take the value of their bitcoins today, subtract their total cost of mining, fees, buying bitcoin. If they are ahead, count them under "profits". If they lost money, count them under "losses". So the guy who mortgaged his house to buy 10 bitcoins for $19,000 worth $4,000 today adds $150,000 to "losses".
But there must be people sitting on tons of bitcoins harvested when it was easy. I wonder if they have any chance ever to turn this into real money.
kryptokurrency. like keystone kops.
Headline should read, "Ponzi scheme runs out of patsies." Unfortunately, this ponzi scheme also contributed significantly to climate change from its massive demands on electricity. I hope it dies a complete death soon. Good riddance.
That concludes my first pedantic post on /. ever.
So, 0.0195% less than yesterday
/me thinks it's because way too people remember the tobacco industry and thalidomide scandals
TBH, follow the money. The greens are trying to get elected, just like the other fellows. Irony: Palm oil scandal because Indonesians burning down forests to plant palm trees, and thus doing way more pollution than all the cars in the USA. I guess Nancy wasn't so smart, afterall. XD
You're no science-anything. You're just another Republican faggot lying on the internet to try to pretend trash everywhere is a good thing. You will hang soon enough.
Look out, we've got a self-proclaimed genius over here!
A bunch of investors who don't know how cryptocurrencies work pulled their money because the BCH hard fork scares them. They're idiots. BTC loses money on electricity at this cost so it WILL go up within a fairly short amount of time. If you wanted a good time to buy into a high yield investment, this is it, people.
I didn't say we know the effect to be harmless. I said that as far as we know right now, they're harmless. Which if you understand the scientific method, is literally the best that can be said about anything. We can never prove something to the fullest extent, we can merely state that as far as the best effort attempts to find out found out, it appears to be harmless. The original study that found the microplastics in human bodies stated that they were observed to be chemically inert and mechanically too small to interact with cellular structures, though which they appear to pass uninhibited.
The AC stalker edgy boy here is trying to continue with the PR narrative that much of journalist class grabbed on to to sell clicks that plastic garbage in the oceans is the same thing as microplastics, even though those are two completely separate issues, with separate causes and separate effects.
When it becomes so mainstream as to be ads in train, then I am thinking of people trying to fleece the public, and regulation will follow not far away (this is the EU not the US where consumer protection are somewhat weaker).
C. Sagan : A demon haunted world:
http://www.amazon.com/gp/product/0345409469/
visit randi.org
Crypto currencies are just like "carbon offsets" and are the very wort sort of ponzi scheme.
Unlike most ponzi schemes, these two leave the last group of suckers AKA "investors" with absolutely nothing, becase both are based on absolutely nothing. The thing being traded is an idea rather than a physical asset, and the scarcity is completely artificial. One does not "invest" in such things, one "gambles" on them. You make money on them only by being an early entrant onto the scam and then getting out by selling to a later generation of suckers who are conned into "investing" by reports of fabulous profits for the first wave of investors and forecasts of even bigger future profits.
Al Gore made fabulous piles of money on carbon trading - and his markets only go up and attract more investors as long as people remain alarmed about global warming, err, climate change. Same for places like California, which has implemented carbon trading and whose Senator Kamala Harris has threatened (when she was Atty Gen) to jail people who disagree with AGW.
You make a good point, but I can see a potential future space for genuinely useful proof of work based crypto.
An example would be protein folding which was done for free like the SETI analysis, similar scientific tasks could have been wrapped up as useful proof of work. They were not, they were done for free. The work done on protein folding has value to society. Similar productives proof of work tasks could be rewarded by the value tied up in the work. The a share of the revenues from the application of the work could be paid as dividends just like conventional stocks.
The exchanges could exist to trade a full range of these like conventional stocks.
Wasted energy crypto is doomed, this is why bitcoin has always been a huge pyramid scheme, there is no fundamental value in it.
"cryptocurrency" isn't just a bubble... see http://www.philippecloutier.co...
I agree. Indeed I've thought about protein folding as a great proof of work if it could be harnessed. Are you working on that?
Some drink at the fountain of knowledge. Others just gargle.
> has now lost over $690 billion and 83 percent of its value
Bitcoin has no actual value, it only has cost. you cannot plug it back into the system and recover the electricity that was used to create it.
Any apparent 'value' is only what the next sucker will pay you for it.
AC coward