Cryptocoin Mining?

[Chiropteran]

yep, pretty nice.

I'm holding out for $1000/coin, that is around where I could simply retire. I have a feeling I will be waiting a long time.

 

[MrK6]

Well it just keeps going: already selling above $16.50. :awe:

 

[Chiropteran]

They are on fire, $17.50 now.

I'm feeling like the value has gone up *too* fast, and will correct downward sometime soon, but I'm no economist. I have a slight urge to unload some of my stockpile and re-buy when value drops, but of course I have the thought "what if the value doesn't drop?".

 

[philipma1957]

I can't complain I hash 8mh about a coin a day. (many 7970's) when the blocks dropped from 50 to 25 i was break even at 10 dollars a coin. (count the gas furnace heat saved) .

so at 17 dollars a coin and 1 coin a day i am doing very well. I will cash 7 coins today. I keep hoping for asic delays. I have not ordered one. I will have to sell off the 7970's soon.

 

[MrTeal]

I can't complain I hash 8mh about a coin a day. (many 7970's) when the blocks dropped from 50 to 25 i was break even at 10 dollars a coin. (count the gas furnace heat saved) .

so at 17 dollars a coin and 1 coin a day i am doing very well. I will cash 7 coins today. I keep hoping for asic delays. I have not ordered one. I will have to sell off the 7970's soon.

Well, apparently the first couple ASICs have shipped out. It doesn't seem like the jump will be too severe quite yet, but there might be a month left of profitable mining for those without ASICs.

 

[IGemini]

They are on fire, $17.50 now.

I'm feeling like the value has gone up *too* fast, and will correct downward sometime soon, but I'm no economist. I have a slight urge to unload some of my stockpile and re-buy when value drops, but of course I have the thought "what if the value doesn't drop?".

I have the same basic thought right now. I'm kinda wanting for a new storage drive, and the egg has a 3TB Seagate going for $130 today. If I cash in, I could get it for ~$15...the reviews are holding me back though.

 

[m.alkhalel]

I've been googling for quite sometime now but still didn't find a clear answer. What exactly does this thing on our computers? And why does it need so much computing power? Are they using us for "cloud" computing? And why would any 1 pay us for this??

 

[MrK6]

I've been googling for quite sometime now but still didn't find a clear answer. What exactly does this thing on our computers? And why does it need so much computing power? Are they using us for "cloud" computing? And why would any 1 pay us for this??

Succinctly, bitcoins are a completely digital currency. You receive payouts, in bitcoins, for your work of verifying the network and ensuring its fidelity (i.e. "mining") by running a mining client (program that links into the network and sends and receives work). Then, you can sell your bitcoins on exchanges, like mtgox, for actual money.

 

[Mir96TA]

$17.50 ehay!

 

[pm]

So yeah, with the difficulty down ~12% in the last month or so, and the price up ~60%, it almost makes up for the payout change back in Nov. When the diff drops below 3E6 for the next round, it might actually make sense for me to fire up the rig again.

I've been googling for quite sometime now but still didn't find a clear answer. What exactly does this thing on our computers? And why does it need so much computing power? Are they using us for "cloud" computing? And why would any 1 pay us for this??

Beyond Mrk6's excellent answer... as far as why someone would pay for it. The whole question of why people pay for bitcoins is confusing, but then so is currency. It tends to lead to questions of why anyone will give you something tangible for a small stack of green paper. Why is Target willing to sell you a bicycle for 10 $20 bills (hypothetically). It's a small stack of useless paper that isn't useful for anything except origami and because people think is has value. Even more, why would a store give you anything physical at all for a bunch of electronic zero's and one's being moved around when you use your credit or debit card. Fundamentally people pay for bitcoins because they think they have value.... although I admit that I find the whole concept a bit confusing and I have a bunch of bitcoins myself.

 

[m.alkhalel]

Thanks for answering some of my questions.
1 thing im dying to know is why does this need so much computing power that ppl are building rigs especially for bitcoining?

 

[thilanliyan]

Thanks for answering some of my questions.
1 thing im dying to know is why does this need so much computing power that ppl are building rigs especially for bitcoining?

They are building because you can make money on them. Heck I would still be with a single 6950 if it wasn't for BTC mining. I went from a single 6950, to dual 6950s, and now to a 7950 and a 6950 all because of BTC mining, which has been profitable for me.

As to "why does it need so much computing power"?...I have no idea lol.

 

[m.alkhalel]

They are building because you can make money on them. Heck I would still be with a single 6950 if it wasn't for BTC mining. I went from a single 6950, to dual 6950s, and now to a 7950 and a 6950 all because of BTC mining, which has been profitable for me.

As to "why does it need so much computing power"?...I have no idea lol.

Ok I found the answer, it basically tried to solve "difficult" mathematical problems that are stored in the blocks and the difficulty is adjusted from time to time. But I still don't get why this need's too much computing power and especially gpu power to solve those problems and to be honest I didn't understand it all, I mean why to pay for this and why to create mathematical problems in the first place and why do they need us to solve it. I don't get the concept :S

 

[philipma1957]

Ok I found the answer, it basically tried to solve "difficult" mathematical problems that are stored in the blocks and the difficulty is adjusted from time to time. But I still don't get why this need's too much computing power and especially gpu power to solve those problems and to be honest I didn't understand it all, I mean why to pay for this and why to create mathematical problems in the first place and why do they need us to solve it. I don't get the concept :S

well it is based on the concept that hard work can make value.

Think of silver mining a hundred years ago. You dig a tunnel into a mountain side to get a few pounds of silver ore a day. The value was that the metal was rare and hard to get. A few hundred years ago the electrical properties were not important. Yeah it looked pretty when you made a coin or jewelry but so did copper, but copper was easier to get in bulk same work more copper. So silver 'cost' more as it was harder to mine.

Same idea here.

If you really want to blow your mind about value do research on diamonds . The value is based on (? )They are not that rare. You can make fake ones with the same properties . They are common enough to be ground into dust for cutting blades.

 

[pm]

Ok I found the answer, it basically tried to solve "difficult" mathematical problems that are stored in the blocks and the difficulty is adjusted from time to time. But I still don't get why this need's too much computing power and especially gpu power to solve those problems and to be honest I didn't understand it all, I mean why to pay for this and why to create mathematical problems in the first place and why do they need us to solve it. I don't get the concept :S

So the thing is, bitcoin mining isn't about solving mathematical problems, it's about doing random work for a reward. So the point isn't to solve a mathematical problem for the good of humanity, it's about finding the hash of a cryptokey... and the reason that you want to solve this is to prove that you did some work to get a bitcoin.

Here's the original bitcoin paper where the author describes the system.
http://bitcoin.org/bitcoin.pdf

See section #4.

I would recommend reading the paper - the beginning sections are mostly in understandable English. The only section which I struggled with was #11.

The part that doesn't entirely make sense is why people pay money for a bitcoin. So it makes sense to me that they are out there, but what makes someone want to pay actual money for them.
1. they are non-trivial to get and theoretically impossible to duplicate.
2. transactions are theoretically anonymous
3. they are not tied to any government and the total circulation is fixed so in theory they should be inflation-independent.

The main reasons for the value seem to be #2 and #3. There are some people who buy them for reason #2 who do not want to be tracked, such as conspiracy theory people, but also criminals and people laundering money. And then there are some people who buy them and hold them for #3 - like gold, they think that this finite resource will be a hedge against inflation.

Here's an article by The Economist which talks about Bitcoins and their value.
http://www.economist.com/node/21563752

 

[m.alkhalel]

So the thing is, bitcoin mining isn't about solving mathematical problems, it's about doing random work for a reward. So the point isn't to solve a mathematical problem for the good of humanity, it's about finding the hash of a cryptokey... and the reason that you want to solve this is to prove that you did some work to get a bitcoin.

Here's the original bitcoin paper where the author describes the system.
http://bitcoin.org/bitcoin.pdf

See section #4.

I would recommend reading the paper - the beginning sections are mostly in understandable English. The only section which I struggled with was #11.

The part that doesn't entirely make sense is why people pay money for a bitcoin. So it makes sense to me that they are out there, but what makes someone want to pay actual money for them.
1. they are non-trivial to get and theoretically impossible to duplicate.
2. transactions are theoretically anonymous
3. they are not tied to any government and the total circulation is fixed so in theory they should be inflation-independent.

The main reasons for the value seem to be #2 and #3. There are some people who buy them for reason #2 who do not want to be tracked, such as conspiracy theory people, but also criminals and people laundering money. And then there are some people who buy them and hold them for #3 - like gold, they think that this finite resource will be a hedge against inflation.

Here's an article by The Economist which talks about Bitcoins and their value.
http://www.economist.com/node/21563752

Thanks for you answer. It explained everything I wanted to know!
*mind blown*
So, sooner or later this is going to be illegal and/or would get modified and legalized....
This thing had my curiosity but now it has my attention!

 

[DominionSeraph]

well it is based on the concept that hard work can make value.

Think of silver mining a hundred years ago. You dig a tunnel into a mountain side to get a few pounds of silver ore a day. The value was that the metal was rare and hard to get. A few hundred years ago the electrical properties were not important. Yeah it looked pretty when you made a coin or jewelry but so did copper, but copper was easier to get in bulk same work more copper. So silver 'cost' more as it was harder to mine.

Same idea here.

No it isn't. The network is simply set up to be inflationary for a time. It has nothing to do with how much computational power is wasted searching for the payout hash. The race to higher hash/s was simply due to people competing for a higher likelihood that they would get the payout block.

If only 2 people were mining, both running one 486 each, they would receive the same payout as if they were each running 100,000,000 7970's. The difficulty scales to the power of the network to maintain the pre-programmed payout level.

 

[pm]

Thanks for you answer. It explained everything I wanted to know!
*mind blown*
So, sooner or later this is going to be illegal and/or would get modified and legalized....
This thing had my curiosity but now it has my attention!

I don't know whether or not that's an inevitable probability, but yeah, there's a good chance of it. If it starts to pick up popularity as a currency of choice for illegal transactions and money laundering, then there's a good chance that attempt will be made to regulate it. It's questionable how successful an actual ban on bitcoins would be given that it's a non centrally controlled peer-to-peer network. Maybe the best way to do it would be to make it very hard to convert bitcoins into US dollars, similar to what has been done with online gambling. On the other hand, it might be argued that one of the best things that could be done to improve the popularity of bitcoins might be to try to ban them.

In a similar respect, but for different reasons, owning large amounts of gold was illegal in the US for decades:
http://en.wikipedia.org/wiki/Executive_Order_6102

 

[Chiropteran]

$18.10

 

[ElvinC.]

OKPAY announced that bitcoin crypto-currency processing fees are lowered to 2.5% for a deposit/payment and 1% for a withdrawal. I think It's the most simple and user-friendly bitcoin processing services. They have the best fees and best Bitcoin functionality offered on the market.

 

[birthdaymonkey]

Wow... nice jump in prices lately. I'm thinking of cashing out my meagre 5 BTC. Can anyone suggest a minimum hassle way of BTC-> dollars in Canada?

 

[MrTeal]

Wow... nice jump in prices lately. I'm thinking of cashing out my meagre 5 BTC. Can anyone suggest a minimum hassle way of BTC-> dollars in Canada?

Probably canadianbitcoins.com, although their rates are terrible. Depending on where you are, you might want to try localbitcoins.

 

[airdata]

Back up to close to $20


Who else has sellers remorse?>

 

[thilanliyan]

Back up to close to $20


Who else has sellers remorse?>

Damn it's down near $17 again.

Please please please hit $20!!!

 

[airdata]

I dumped a good chunk of coins @ ~$4 last year. Shoulda hung on to them for sure.