Cryptocoin Mining?

[birthdaymonkey]

Broke past $20 pretty damn fast, selling at $21.25 currently.

Noooo... I sold at $19 because I figured at $20 lots of people would be looking to sell, driving prices back down.

I guess such is life in the high stakes world of BTC speculation.

 

[Chiropteran]

Remember a few months back when I said the price may double after the difficulty rewards halving?

I remember.

edit: taltamir caught my error, thanks

 

[taltamir]

Remember a few months back when I said the price may double after the difficulty halving?

I remember.

don't you mean the difficulty doubling due to the awards halving?

 

[Chiropteran]

No, I mean the cash value of btc doubling.

 

[thilanliyan]

Noooo... I sold at $19 because I figured at $20 lots of people would be looking to sell, driving prices back down.

I guess such is life in the high stakes world of BTC speculation.

Lol that's exactly what I was thinking and I sold at $18!! Haha such is life...but still happy with my earnings.

 

[blastingcap]

Price increase is mostly demand related, NOT supply related. Wordpress was a big plus, as it gave BTC more legitimacy. Online gambling in BTC is way up, as are more esoteric things like BTCs being used for online piracy sites. Then there is the good ol' BTC for drugs and stuff like on Silk Road. A surge in demand is driving this, not the halving. 3600 BTC/day is the impact of the halving, versus a mined supply of over ten MILLION BTCs. 3600 per day vs 10 million in stock makes it pretty clear that supply is barely moving but demand has gone up.

ASICs are here, though so mining on GPUs is pretty much doomed. Even mining on ASICs isn't necessarily so great once the difficult goes up by a factor of 20 or whatever. If you are so sure of BTC's rise in value then you are probably better off directly purchasing BTC rather than trying to buy more GPUs or FPGAs or ASICs.

 

[HydroSqueegee]

i said screw it and cashed out my little horde.

money in the bank.

going to be said if it just keeps going up.

 

[taltamir]

No, I mean the cash value of btc doubling.

You misunderstood me, I was correcting the second half of your statement not the first half.
Let me clarify.

the price may double after the difficulty halving

I believe you should have said

the price may double after the difficulty doubles due to the awards halving

I was not addressing the issue of price AT ALL (although I don't agree with you on it).
I was pointing out that bitcoing difficulty never goes down, it just gets more difficult, specifically it does so in doubling of difficulty at various break point (untill all possible bitcoins are mined at which point no new bitcoins can be made).

 

[Chiropteran]

Price increase is mostly demand related, NOT supply related. Wordpress was a big plus, as it gave BTC more legitimacy. Online gambling in BTC is way up, as are more esoteric things like BTCs being used for online piracy sites. Then there is the good ol' BTC for drugs and stuff like on Silk Road. A surge in demand is driving this, not the halving.

Yep, I remember your argument back then, don't need to repeat it. Yet it seems to be happening, as I thought it might.

I still believe the pressure of potential mining was holding back value. Bitcoin is still a niche enough the the majority of users are at least somewhat aware of mining and many are actually mining.

When mining is offering x profit, it's a temping way to obtain BTC, but when that expect profit is cut in half overnight it loses a lot of it's appeal, forcing those potential miners to buy BTC. I never suggested the halving itself would directly create demand, I was suggesting the prior to the halving the lucrative rewards of mining were hurting demand.

Average miner had to ask himself, do I want to spend $100 cash for 10 bitcoins, or spend $45 in electricity for 10 bitcoins?

Obviously a huge oversimplification a not even accurate, but the point is that overnight it changed from mining being the clearly better deal to mining being being barely even or even a net loss. Many miners quit mining, there are posts on this forum and the bitcointalk describing this phenomenon. If any of those miners wanted to continue to invest in BTC, or make purchases in BTC, they had to buy coins directly.

 

[Silver Prime]

lol I thought this was about real mine-ing.

 

[Chiropteran]

edit: blah nevermind, I stand corrected. I see what I did, thanks for the catch.

(Difficulty can go down though, when the number of miners drops. It happened after the big crash for a few months.)

 

[gorobei]

the price jump has nothing to do with mining cost or difficulty. the number of bids vs asks on mtgox is heavily weighted on the bid side. more people want bitcoins(for whatever reason) and are putting real dollars on the exchanges to get them.

as blasting cap said, it may be the wordpress acceptance or silkroad. at pure speculation, i would guess its the all the potential assault weapons ban legislation induced buying spree making btc a required part of buying grey market arms. silkroad is known for being able to get you automatic or modified ARs and AKs. the upswing in btc could easily be from paranoid militia types grabbing all the hicap mags and black market rifles.

 

[Chiropteran]

the price jump has nothing to do with mining cost or difficulty. the number of bids vs asks on mtgox is heavily weighted on the bid side.

Yeah, obviously. And if it's raining out it's obviously caused by the rain falling from the sky. The real answer answers the question "why are people bidding more for BTC?" I'm not sure why you think more people bidding on mtgo is remotely important, that much is obvious. I attempted to predict the future results of a big change, and thus far I seem to be mostly correct (value is a few dollars short of being double what it was prior to the reward halving). You didn't predict anything correctly. It's easy to come in after the fact and claim it happened because of reason X.

more people want bitcoins(for whatever reason) and are putting real dollars on the exchanges to get them.

If any of those miners wanted to continue to invest in BTC, or make purchases in BTC, they had to buy coins directly.

See? I already said what you seemed to think was the "obvious" reason, because it's directly related (and part of) the halving.

as blasting cap said, it may be the wordpress acceptance or silkroad. at pure speculation, i would guess its the all the potential assault weapons ban legislation induced buying spree making btc a required part of buying grey market arms. silkroad is known for being able to get you automatic or modified ARs and AKs. the upswing in btc could easily be from paranoid militia types grabbing all the hicap mags and black market rifles.

It might be, but prior to the halving any of those cases the savvy buyer could look at the price of a bitcoin and look at the expected returns of mining and decide that buying isn't as good of a value as mining would be. There was no reason for those users to buy bitcoins when they could be mined so easily. Now that the mining rewards are cut in half, buying is a much better choice, although as the price continues to creep upwards it gets closer and closer to the equilibrium value where potential mining holds back the value.

Here is another analogy. You are a chef and you need 40 lbs of deer meat for the main course of a banquet. You could buy the meat directly from a hunter and have it cut up and prepared at a minor inconvenience of your staff, or you could buy it at a butcher all perfectly cut and ready, saving your staff some time and trouble.

Prior to the halving, buying venison directly from a hunter costs $240 and buying it from the butcher costs you $500. The difference is huge, so you buy from the hunter and your staff prepares the venison, costs you some dollars in wages but all in all it's a much better deal than spending $500.

After the halving, the hunter is now charging you $480! If you were to buy it from the hunter, you would still have to further prepare the meat, and pay your staff for their time, and it would actually end up costing more than $500. So you go to the butcher, where you find the value of deer meat has actually gone up a bit, so you need to pay $520. Still, it's the best way to go, so you simply pay for the meat and go on your way.

The venison is BTC. The hunter is mining the coin yourself- less overall cost, but lots of inconvenience and work added into the equation. The chef is someone who wants to use BTC on silkroad, or wordpress, or to simply save and invest, it doesn't really matter at all. It makes sense to mine if you are getting a great "deal", but when the expected returns of mining are cut in half that deal is gone.

 

[philipma1957]

Well that looks professionally made.

He got it running.
http://garzikrants.blogspot.com/2013/01/avalon-its-alive.html

Right now he is claiming 66gHash and 620 watts .

I can do 1.65gHash with a 3x hd7970 and 480watts this is an underclocked setup that will max my watt to hash ratios.

So his avalon is 40x the hash for 1.3 the power or 30x to 1.

So if the bfl is better watch out. Oh the total hash is now down to 22,000 gHash it did peak at 30,000 for a while.


The transition has started. I am thinking 100,000 gHash by May or June.


I did some quick math.

I push 9gHash this means I will need to get to 50gHash by summer and 100 gHash by Dec.

I sold 2 used 7970s for 600.

I put in an order for a pair of Jalapenos at 300. so I gave up 1 gHash to buy 9 gHash spent 300 and pocketed 300.

I have 14 to sell. When do the hd80xx hit? may or june.

 

[Binky]

Right now he is claiming 66gHash and 620 watts .

It's earning ~18 BTC per day. Wow. $360/day @ $20/btc at 620 watts seems pretty great, so great that the power costs are trivial and irrelevant.

 

[philipma1957]

It's earning ~18 BTC per day. Wow. $360/day @ $20/btc at 620 watts seems pretty great, so great that the power costs are trivial and irrelevant.

yeah but 18 btc is a hot streak. I push 1/10 or 1/9 of his hash.

7300 he is 66000


at 7300 i get 1.1 btc a day on average.


so at 66000 he should do 10 a day.

so 18 is being very lucky still 10 a day is 190 usd. his 620 watts is about 15 k watts a day about 2 dollars for some 3 for others.

 

[thilanliyan]

How much did he pay for the Avalon? Or how much is the Avalon supposed to cost?

 

[philipma1957]

How much did he pay for the Avalon? Or how much is the Avalon supposed to cost?

maybe 1500. but he helped with the code development and is the first to get one. basically he will get his money

back in less then 2 weeks.

of course as these become common the network hash goes up and earning of btc go down.

 

[MrK6]

How about that $20.50?

Although I'm kicking myself for selling four coins at ~$13.25 a month ago.

 

[Zargon]

same

 

[thujone]

i'm starting to wonder if as the prices rise, there will be more attention from the government(s)

 

[RussianSensation]

i'm starting to wonder if as the prices rise, there will be more attention from the government(s)

http://www.bloomberg.com/news/2013-...l-central-bank-concerns-chart-of-the-day.html

 

[thujone]

yeah... i didn't figure prices could skyrocket this quickly and not garner some attention

 

[Chiropteran]

I sold 8 bitcoins, now I have $173 in my mtgox account. Not trying to cash out, I just suspect that the value may continue to fluctuate both directions, so I plan to re-buy my coins next time value drops below $19. My luck, that won't ever happen, but since I only sold a small fraction of my coins I'd be perfectly happy if price stays consistently high or continues to increase.

 

[HydroSqueegee]

i kept some cash in mtgox just in case things crash back to the ground.