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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.
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.
And the article references nvidia as taking a hit in this one, which is equally ignorant, as ethereum ASICs pushed GPU mining out completely a few months ago. It's why nvidia and its board partners are reported to have large warehouses full of unsold GTX 1060s, which were the most economical card to mine ethereum on before ASIC hit the market.
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!
It is similar to the "peak oil" fanatics. They write the diatribes about how "peak oil" is right around the corner and everything is going to collapse (for the last 50 years).
Well, if you are a Misanthrope, you might not like me!
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.
Exactly. It always "just happened" with you nuts. So predictable.
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...
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.
750,000 pounds of gold was found, which probably went directly to the banking cartels through lending to gold rush businesses, etc. A hundred years later, the families of the guys who sold tools are middle class Americans, and the banks have profited immensely off the gold.
Yes, already back in 2011 in Canada. News reports can still be easily found.
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
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.
That concludes my first pedantic post on /. ever.
So, 0.0195% less than yesterday
They write the diatribes about how "peak oil" is right around the corner and everything is going to collapse (for the last 50 years).
Given that there is a finite amount of oil on the planet, and that oil is effectively destroyed as it is used, they will sooner or later be correct.
I don't care if it's 90,000 hectares. That lake was not my doing.
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
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.
They're idiots. BTC loses money on electricity at this cost so it WILL go up within a fairly short amount of time.
"Bitcoin is expensive to make, so it's going to go up in price! Idiots!" Someone took off early from Econ 101, only got through the 'Supply' side of the lecture. Might want to go back and freshen up on the 'Demand' notes the smart people took while you were off spending your virtual millions...
Physics is nothing like religion. If it was, we'd have an easier time trying to raise money!
He was talking about tradesmen and craftsmen who sold to the miners. My point was that it ultimately ended up with the bankers.