Bitcoin is Worth Less Than the Cost To Mine It (bloomberg.com)

The production-weighted cash cost to create one Bitcoin averaged around $4,060 globally in the fourth quarter, according to analysts with JPMorgan Chase & Co. With Bitcoin itself currently trading below $3,600, that doesn't look like such a good deal. However, there's a big spread around the average, meaning that there are clear winners and losers. From a report: Low-cost Chinese miners are able to pay much less -- the estimate is around $2,400 per Bitcoin -- by leveraging direct power purchasing agreements with electricity generators such as aluminum smelters looking to sell excess power generation, JPMorgan analysts led by Natasha Kaneva said in a wide-ranging Jan. 24 report about cryptocurrencies spearheaded by Joyce Chang. Electricity tends to be the biggest cost for miners, needed to run the high-powered computer rigs used to process data blocks to earn Bitcoin.

"The drop in Bitcoin prices from around $6,500 throughout much of October to below $4,000 now has increasingly pushed margins further and further negative for just about every region except low-cost Chinese miners," the analysts said, offering the caveat that their cost estimates may be skewed to the high side due to spotty data and conservative efficiency assumptions. The cost figures exclude equipment.

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[onyxruby]

Bitcoin costs less than it costs to mine it - but only if your paying for the electricity. Own someone else's computer and you can happily mine without worrying about pesky things like electric bills. Hell, some websites will run a miner on your computer while your browsing their web page.

https://99bitcoins.com/webmini...
https://www.forbes.com/sites/l...

The biggest problem with bitcoin is that there is no consideration as to the cost to the environment. Those that are dishonest can better exploit bitcoin than those that are honest.

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[drinkypoo]

So... bitcoin takes less power than internet porn and internet games...both unessential things.

Take those away and see how quick you get riots.

Bitcoin is shit because there are better ways to handle that problem which don't consume nearly so much electricity, therefore that energy is purely wasted. You can't have porn and games without spending power on them, but you can have cryptocurrency while spending much less power, or by spending that power to do genuinely useful work.

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[viperidaenz]

which automatically adjusts itself to maintain the long term mining rate at one block per 10 minutes.

Which is just one reason why btc will never replace traditional payment networks.
No one is going to wait 10 to 20 minutes for a transaction to be verified when they're at a checkout.
Nor are they going to effectively bid to have their transactions accepted by miners in what is a global limitation of less than 10 transactions per second.

Visa can process a peak or 56,000 transactions per second and regularly does 4,000 per second.
Apparently Mastercard does even more than that.
There's AMEX too, and many others. All of which operate simultaneously, as they're all methods of transferring fiat currency, not specific Visa Dollars or Mastercard Money. The customer's bank also deals with currency conversion automatically. I don't care that the thing I'm selling to a guy in Japan is paid for in Yen, I get my dollars in exchange, in less than a second. At most it costs me 2.5% in fees. Usually less.

BTC fees can be upwards of $40.

As a consumer, if someone steals my credit card number, there's a limit to how much can be taken, and most likely I'll get the fraudulent transactions reversed. Nothing lost.
If someone steals my BTC wallet, I'm fucked. Every coin in that wallet is gone forever.
If I lost it, I'm fucked, every coin in that wallet is lost from the network forever. In a network of finite coins. There are 5 wallets with more than 100,000 BTC in them. I'm will to bet someone just lost their private keys
This guy: 1FeexV6bAHb8ybZjqQMjJrcCrHGW9sb6uF put 80 BTC in there back in 2011, and some minor deposits have trickled in over the years, but never a single withdrawal. Maybe it's a "please donate" address on some website somewhere and the owner has since died.

So far ~10% of the total supply has been lost forever. An estimated 2 million btc are gone, mostly from the first few years.

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[Cmdln Daco]

Similar to how the people who made the real money in the 1849 California gold rush were the people who sold food and equipment to the miners.

That's cool - I can keep ignoring it.

[RyanFenton]

Listen - I understand all the ideals of cryptocurrencies - from distributed power, to limited supply, to anonymity.

They're a worthwhile idea to explore - but every virtue they hold has a vice - and for the same reason I find biofuels competing with food crops to be a bad tradeoff - I find expending fuel into the environment to be a similar bad tradeoff.

That's hardly the only concern - but it's enough for me to consider it an idea that really needs to go back to the drawing board as a currency.

That said, it's still a resource that will be speculated on - so good luck to those that care about that aspect, I suppose.

Ryan Fenton

The ultimate dupe

[sootman]

"The drop in Bitcoin prices from around $6,500 throughout much of October to below $4,000 now has increasingly pushed margins further and further negative for just about every region except low-cost Chinese miners," the analysts said, offering the caveat that their cost estimates may be skewed to the high side due to spotty data and conservative efficiency assumptions. The cost figures exclude equipment. "The drop in Bitcoin prices from around $6,500 throughout much of October to below $4,000 now has increasingly pushed margins further and further negative for just about every region except low-cost Chinese miners," the analysts said, offering the caveat that their cost estimates may be skewed to the high side due to spotty data and conservative efficiency assumptions. The cost figures exclude equipment.

New Slashdot feature: rather than making readers wait a couple days for a dupe, dupes are now included in the initial entry.

Rather than making readers wait a couple days for a dupe, dupes are now included in the initial entry.