Cryptocoin Mining?

[thilanliyan]

Bad part about Namecoin is that it uses the same SHA256 method that Bitcoin does, so it will not be bitcoin-ACIS immune. Litecoin, however, is at the moment.

Is there any point to mining namecoins though? Anyone think it will get anywhere near bitcoins or litecoins?

 

[Chiropteran]

Most pools mine bitcoin and namecoin simultaneously. I have mined 508 namecoins while mining bitcoins on BTCGUILD. Don't really have a use for them, but I have them

In other news, i'm just amazed at the recent value of BTC. Yes, it's explainable, a lot of crap going on in the world which may be pushing people over to a safe currency, but it's still amazing to me.

Just think: even if you picked the worst possible time to invest in bitcoins, $31.90 just before the June 2011 crash, as long as you held on to the coins you would have more than double your original investment today.

I am starting to think that bitcoins has so much momentum now it can't fail. The big fear that the us government will crack down on them is gone thanks to the FinCEN announcement. The fear of a bug or flaw destroying value is gone after the hard fork barely dented the price. That said, I'm trying to manage my expectations, and I'm not doing anything stupid like taking out a loan to buy coins. I figure the coins I have now are enough to carry me into a very comfortable life if bitcoin takes off into the mainstream.

 

[HydroSqueegee]

kinda wondering where this all will go once ASICs become mainstream. Will we be where we're at now where people with one or two ASICs wont be able to mine for a profit anymore?

I thought for sure the prices would come down. Clearly i was wrong.

Difficulty has become too high for me to mine coins in a timely fashion with my meager setup, so i'm pretty much out of the mining game.

 

[Chiropteran]

kinda wondering where this all will go once ASICs become mainstream. Will we be where we're at now where people with one or two ASICs wont be able to mine for a profit anymore?

I thought for sure the prices would come down. Clearly i was wrong.

Difficulty has become too high for me to mine coins in a timely fashion with my meager setup, so i'm pretty much out of the mining game.

As I said back before the reward halving, I think there is "soft" link between BTC value and mining. If value climbs too much beyond the expected returns of mining, it will encourage more people to mine, in turn difficulty will increase until there is some equilibrium again.

This goes both ways. BTC value goes up absurdly high? Well, it makes more sense to buy a $500 mining rig with an expected return of 1 bitcoin per month and operate it for a year than it does to buy 6 bitcoin outright. The other extreme, if mining rig costs $500 and will produce only 1 bitcoin per year it makes much more sense to buy bitcoin outright even if they cost $200 a piece.

Personally I feel right now value is too high for the difficulty, but I think it's a special situation: people don't want to ramp up GPU mining because ASICs make it obsolete, but ASIC are just not readily available yet.

Now, this is all fine and good when everyone is mining with a GPU, but ASIC devices will be on their own scale entirely. When they become generally available, they will kill GPU profit (except parent's basements 0 electricity cost type setups, but I think those are the minority).

After ASIC's become common, I don't think it automatically means all profit will evaporate instantly. While there is a link between value and expected profit, it's not instantaneous and the transition is going to be rocky- difficulty will skyrocket at first, but may fall back down a little as the big GPU miners quit for good. I suspect ASIC will remain highly profitable for a year or so, and after that will still make a small profit but only after mining for a year or so. If you have a situation where the hardware pays for itself in the first week of operation you know that isn't sustainable, but it seems to me that the 1 year mark is where people stop considering it a guaranteed safe investment.

I wish I had some solid information on BFL. At this point I feel like they could be a scam or could just be incredibly slow/inept, but I can't tell which. If I knew they were going to deliver I'd probably order 3-4 more Single SC, I'm fairly confident they would pay for themselves 2X over in the first 6 months of use.

 

[Mir96TA]

I thought I couldn't break 1 Gig from my Partimer 6970 and 7970
But today............. they working like Asic (sorta )

 

[fleshconsumed]

Difficulty: 4847647
I want to Quit BitCoing
But Buying Rate is $70
Now I Can't seems to able to quit

Pretty much the same. I have 7950 and 7970 mining. I get 0.1 coins every 23 hours, or about 3 coins every month. At the current selling price that's $210 profit a month minus electricity costs. I'll keep GPU mining until it becomes unprofitable. Part of me wishes that moment would come sooner rather than later so that I can finally sell the 7950, but then again, ~$100/month I'm getting from 7950 is nothing to sneeze at. The other part of me wishes I've gotten on the ASIC preorders, however at the time I was still kind of new to bitcoin, I wasn't sure if it was worth the hassle and I wasn't really willing to fork out >$1K to someone who could run away with my money... Looking back, it sure would have been nice to be an early owner of one of those ASICs. Oh well...

 

[Subyman]

I bet the people that paid for their ACIS in bitcoin are kicking themselves now that bitcoins are worth 4-6x more than when they used them lol.

I'm wondering if a few wealthy people are doing a pump and dump on bitcoins right now.

 

[philipma1957]

yeah I am mining 12 gpus for 6Gh about .6 coins a day or just about 40usd a day. I spend about 9 in power profit of 31 usd a day. or 900 a month plus heat bill dropped 100 so 1000 a month while it lasts.

I wrote a long post at below link, as to a real problem with bitcoins (restriction of asics)

https://forums.butterflylabs.com/pr...these-machines-yourselves-making-bitcoin.html

the danger of unavailable asics could kill bitcoins.

I can buy 10x 7970 today from amazon get them in a day. I can not buy an asic and get it in a day.

The preorder concept for asics is very bad for bitcoins. It creates a lot of bad mojo. Kind of like a pile of gold in the mine and You can't buy a mining pick. You hand over 100 bucks for the pick ax and wait for the wagon to bring it. Every gold/silver mining boom has had a big bust.

The restriction of mining gear has driven the price up and the $60 plus prices are based on a false perception of mining difficulty.

Well heck as long as it lasts I am making money.

 

[Chiropteran]

the danger of unavailable asics could kill bitcoins.

I can buy 10x 7970 today from amazon get them in a day. I can not buy an asic and get it in a day.

I'm guessing you weren't mining back in May/June (pre-crash) of 2011. There was a time where it was virtually impossible to buy a good mining card at a decent price. Sure, they were available, but when you knew a 5830 *should* cost $150 you didn't want to buy them for $250, so you waited. It was actually a big deal when some cards came in stock at reasonable prices, and they often sold out instantly.

You literally couldn't buy 10X of the current best mining cards on amazon and get them in a day, unless you paid the absurd premiums some of the 3rd part sellers charged, at regular price there was usually zero or only a couple units available if you were lucky.

This was partially because the 6 series wasn't as good at mining as the 5 series cards were, and most retailers were focusing on keeping the 6 series cards in stock, but regardless of reasons it was the situation at the time.


All said, shady behavior of some ASIC produces won't kill bitcoins. It will just kill their own business.

 

[philipma1957]

I'm guessing you weren't mining back in May/June (pre-crash) of 2011. There was a time where it was virtually impossible to buy a good mining card at a decent price. Sure, they were available, but when you knew a 5830 *should* cost $150 you didn't want to buy them for $250, so you waited. It was actually a big deal when some cards came in stock at reasonable prices, and they often sold out instantly.

You literally couldn't buy 10X of the current best mining cards on amazon and get them in a day, unless you paid the absurd premiums some of the 3rd part sellers charged, at regular price there was usually zero or only a couple units available if you were lucky.

This was partially because the 6 series wasn't as good at mining as the 5 series cards were, and most retailers were focusing on keeping the 6 series cards in stock, but regardless of reasons it was the situation at the time.


All said, shady behavior of some ASIC produces won't kill bitcoins. It will just kill their own business.

I got into this in AUG 2012. It has been fun and now it has turned a profit which makes it even more fun. I do see a real issue with the asic management I have an accounting background along with a bit of computer experience.

The asic sales are not good as a preorder system. The temptation to hold them back and mine has become too great. 1 avalon at 60gh can mine tenfold my 6gh in gpus. I mine .6 coins a day. an avalon should mine 6 coins a day at 20 or even 30 usd it is nice but at 65 usd I am sure avalon is really tempted to hold them and mine for one or two weeks for each unit.

The network numbers bear this out as a possibility. Asicminer had more then 7Th reported hash to their share holders. what check or balance is there for them to hide another 2 or 3Th in the unknown section of the pool? AS for BFL the first set of 6000 chips arrived then they said we are going to do a destructive test on 1000 of the chips to speed things up. 1000 chips could hash at 4 to 9 Th. Since 32 Th is unknown on the bitcoin charts and about 26Th is accounted for. How hard is it for asic builders to hide 5 10 or 15Th in the unknown section?

The answer is it should be possible to do. 15Th would earn about 520 blocks in one week. that is 13000 coins or 845000 usd. Well I can't do anything but type out ideas that show a real possibility of pump and dump tactics. An avalon sold for 50k on ebay. I would love to post the link to show the insanity but anandtech says no ebay links.

If you go to ebay and search avalon asics look at the crazy prices. This is very bad for bit coin. my gut feeling is bit coin is going to be Bernied soon (Bernied as in Bernie Madoff)

Too bad as it had a good idea.

 

[OVerLoRDI]

The current price makes me sick. When I first found out about bitcoin back in February of 2011 and started building a mining swarm (I had 31 GPUs total at one point, I think close to 10 GHash/s at its peak).

I didn't save a lot of coins because when I first saw this, it seemed way way way too good to be true. I generated 30,000 coins over the course of my mining adventure. Every time I see the price as it is now, it makes me so mad. I could have had $2.2 mil at this price level...

 

[birthdaymonkey]

If you go to ebay and search avalon asics look at the crazy prices. This is very bad for bit coin. my gut feeling is bit coin is going to be Bernied soon (Bernied as in Bernie Madoff)

Too bad as it had a good idea.

It definitely feels like something fishy is going on. Your theory has strong explanatory power for what has been happening over the past few weeks in terms of hash rate and price increase.

BTC is just increasing at an unsustainable rate. Any currency that is so unstable is not much good for actual use as a currency. The bubble is being inflated by rampant speculation and is almost certain to burst.

 

[blastingcap]

It definitely feels like something fishy is going on. Your theory has strong explanatory power for what has been happening over the past few weeks in terms of hash rate and price increase.

BTC is just increasing at an unsustainable rate. Any currency that is so unstable is not much good for actual use as a currency. The bubble is being inflated by rampant speculation and is almost certain to burst.

Yup. I wonder how many people here play in the equity and bond and FOREX markets and have seen booms and busts like this. I know I have. I know it's unpopular to say it's a bubble, but.. it's a bubble. The only people who deny that it's a bubble are those who haven't seen these types of things happen as often. Things like the run-up in BTC price in 2011 and the current run-up happen all the time in other markets, and it's foolish to think that this won't end like every other bubble. That said, I think the bubble has some life left in it, but when it crashes it'll go pretty far down. I'm preparing a BTC transfer for sale now.

The current price makes me sick. When I first found out about bitcoin back in February of 2011 and started building a mining swarm (I had 31 GPUs total at one point, I think close to 10 GHash/s at its peak).

I didn't save a lot of coins because when I first saw this, it seemed way way way too good to be true. I generated 30,000 coins over the course of my mining adventure. Every time I see the price as it is now, it makes me so mad. I could have had $2.2 mil at this price level...

You obviously had money in the first place, if you were able to buy 31 GPUs. At that point with all the headache of mining you might have been better off simply buying BTC. If you got in at $3, and today it's $66, that's a 22x return.

 

[thilanliyan]

I generated 30,000 coins over the course of my mining adventure.

Wow 30,000!!!!

Might have been taxed on it though hahaha

 

[Chiropteran]

I know it's unpopular to say it's a bubble, but.. it's a bubble. The only people who deny that it's a bubble are those who haven't seen these types of things happen as often. Things like the run-up in BTC price in 2011 and the current run-up happen all the time in other markets, and it's foolish to think that this won't end like every other bubble. That said, I think the bubble has some life left in it, but when it crashes it'll go pretty far down. I'm preparing a BTC transfer for sale now.

http://bitcoincharts.com/charts/mtgoxUSD#tgTzm1g10zm2g25zvzl

I dunno. In 2011, bitcoin went from .04 to $31.90 before crashing. An increase of nearly 800X. More importantly, even after the crash value settled around $4 for the most part (there were brief dips below that to $2-3 but they are anomaly). So $32 might have been a bubble, but value STILL increased 100X overall, even after the massive crash.

What we have now started around $15-20. If it follows the same pattern as the last "bubble", and increase 800 fold before crashing, we are talking about $12000 bitcoins.

The current value inflation is not even remotely close to being the bubble we had back in '11.

One thing I see from bitcoin discussions constantly is bemoaning about how people wish they could have been around for the days of $.01 bitcoins, and how they would be so rich. The thing is, the idea back then that bitcoins would go from $.01 to even just $5 was pure fantasy and sounded absurd. In 5 years, you are going to look back at this day and wish you could still buy BTC for less than $100 each, because value is going to be measured in 5 digits by then.

 

[blastingcap]

http://bitcoincharts.com/charts/mtgoxUSD#tgTzm1g10zm2g25zvzl

I dunno. In 2011, bitcoin went from .04 to $31.90 before crashing. An increase of nearly 800X. More importantly, even after the crash value settled around $4 for the most part (there were brief dips below that to $2-3 but they are anomaly). So $32 might have been a bubble, but value STILL increased 100X overall, even after the massive crash.

What we have now started around $15-20. If it follows the same pattern as the last "bubble", and increase 800 fold before crashing, we are talking about $12000 bitcoins.

The current value inflation is not even remotely close to being the bubble we had back in '11.

One thing I see from bitcoin discussions constantly is bemoaning about how people wish they could have been around for the days of $.01 bitcoins, and how they would be so rich. The thing is, the idea back then that bitcoins would go from $.01 to even just $5 was pure fantasy and sounded absurd. In 5 years, you are going to look back at this day and wish you could still buy BTC for less than $100 each, because value is going to be measured in 5 digits by then.

I am not saying that the bubble will burst right this second, and in fact I said that I think that this bubble still has some legs. But it's foolish to attempt to time the peak; peaks are almost impossible to time correctly which is why smart people will try to hedge their bets and take some profits now and leave some for later. Yes, if you time it perfectly you would make even more money, but it's just so hard to time correctly.

I've been through my fair share of bubbles in stocks and bonds and FOREX. It's absurd to think that bitcoin won't go through the same thing. In fact it already has (2011). And you are saying the naive and often-repeated phrase many people in financial markets have said for eons: "this time it's different." If you look at actual transactions and such I don't know if it's that different from 2011. You have stronger exchanges and such, but the risk of govt involvement is worse than ever with MtGox tied up not only with Dwolla but now having agreements with Silicon Valley Bank, which is US-regulated. And BTC is a crappy protocol for commerce in that it takes an average of 10 minutes for a single confirmation. You can build layers on top of that, but that is not free which erodes one advantage BTC has going for it vs credit cards and other alternatives. But Dwolla is pretty cheap too. Just not anonymous-ish... Anyway, BTC is a crappy protocol for commerce and Litecoin has the right idea but there is room for even faster-confirming protocols. The world is littered with "firsts" that are shells of their former selves, if they even exist, such as Friendster and Myspace. BTC was first. It won't be the last.

I'm not saying BTC will crater to zero, just that there will be a harsh correction coming. The nature of bubbles is that it's very difficult to spot the peak, and many people will tell themselves all sorts of stories to make believe that they aren't in a bubble... until it bursts on them.

After the correction may be a good time to buy back into BTC depending on how deep the correction is.

 

[OVerLoRDI]

You obviously had money in the first place, if you were able to buy 31 GPUs. At that point with all the headache of mining you might have been better off simply buying BTC. If you got in at $3, and today it's $66, that's a 22x return.

Not a lot actually. I had maybe a $1000 to spare as a college student? I started with one 6970, saw the money I was making and bought more and more and more hardware as it was paying for it self. Once I ran out of power circuits and space, I just harvested and maintained.

 

[Binky]

Anybody who doesn't see a bubble is crazy, or they don't understand bubbles.

 

[philipma1957]

Anybody who doesn't see a bubble is crazy, or they don't understand bubbles.

i am hoping for a few more weeks of this bubble before it pops.

 

[Chiropteran]

Anybody who doesn't see a bubble is crazy, or they don't understand bubbles.

Maybe it is a bubble. Even if it is, who cares? It's not really important if you are in it for the long haul.

2011 was a bubble in your opinion, no? Lets say you invested at the worst possible moment, and bought $10,000 worth of bitcoins for $31.90 each. you could sell those coins today at this moment for $22382. More than 120% return on investment after 21 months, is that the penalty for buying into this horrible bubble? I'll take those sort of returns any day. If that is the price you pay for participating in this bubble, I'll happily pay it 10X over.

Also, recall the last "bubble" started at $.04 If you called it as the bubble it was and sold out your earnings at 7X that, you'd have sold for a cool $.28 per bitcoin. Unlike those poor folks who stuck around for the entire bubble who only got to sell for $10 or $7 per bitcoin after the initial crash. Even if it is a bubble, selling at the start of the bubble is the wrong move! And $70 value, over a normal of $10, is a mere 7X increase, which is probably just the tip of the iceberg if it's a real bubble.

I have no special knowledge. I don't know what the value will be tomorrow or the next day.

I just find that out of all possibilities, selling now is least likely to give me the best returns.

1- It is a bubble, like in 2011, and like 2011 value will shoot much much higher before crashing. Selling now is a bad idea.

2- It is not a bubble, steady growth at current rate will continue for some time before leveling off. Selling now is a bad idea.

3- It is a bubble, and somehow out of all possible values the bubble is at it's peak RIGHT NOW. Selling now makes sense! The only problem is that the odds of correctly guessing the peak value are effectively zero, so rationally I have to assume this is not actually the case.

 

[philipma1957]

Maybe it is a bubble. Even if it is, who cares? It's not really important if you are in it for the long haul.

2011 was a bubble in your opinion, no? Lets say you invested at the worst possible moment, and bought $10,000 worth of bitcoins for $31.90 each. you could sell those coins today at this moment for $22382. More than 120% return on investment after 21 months, is that the penalty for buying into this horrible bubble? I'll take those sort of returns any day. If that is the price you pay for participating in this bubble, I'll happily pay it 10X over.

Also, recall the last "bubble" started at $.04 If you called it as the bubble it was and sold out your earnings at 7X that, you'd have sold for a cool $.28 per bitcoin. Unlike those poor folks who stuck around for the entire bubble who only got to sell for $10 or $7 per bitcoin after the initial crash. Even if it is a bubble, selling at the start of the bubble is the wrong move! And $70 value, over a normal of $10, is a mere 7X increase, which is probably just the tip of the iceberg if it's a real bubble.

I have no special knowledge. I don't know what the value will be tomorrow or the next day.

I just find that out of all possibilities, selling now is least likely to give me the best returns.

1- It is a bubble, like in 2011, and like 2011 value will shoot much much higher before crashing. Selling now is a bad idea.

2- It is not a bubble, steady growth at current rate will continue for some time before leveling off. Selling now is a bad idea.

3- It is a bubble, and somehow out of all possible values the bubble is at it's peak RIGHT NOW. Selling now makes sense! The only problem is that the odds of correctly guessing the peak value are effectively zero, so rationally I have to assume this is not actually the case.

Its all about how you get coins. I "get" .6 coins a day via mining. Or a cost of roughly 7 dollars a day in the winter and 9 dollars a coin in the summer. This means I buy coins today at about 35 dollars for 3 coins.

5 days of power = 35 dollars 5 days of mining = 3 coins.
I sell 2 coins when I reach 3 coins. The only exception to this is I don't sell coins if they cost more to mine then my selling price. This was true for 3 or 4 days since aug 2012.

This allows an averaging of risk. Traders come and go> Not for me. Now if you are trading the methods are different. Buy and hold may work.

 

[blastingcap]

Maybe it is a bubble. Even if it is, who cares? It's not really important if you are in it for the long haul.

2011 was a bubble in your opinion, no? Lets say you invested at the worst possible moment, and bought $10,000 worth of bitcoins for $31.90 each. you could sell those coins today at this moment for $22382. More than 120% return on investment after 21 months, is that the penalty for buying into this horrible bubble? I'll take those sort of returns any day. If that is the price you pay for participating in this bubble, I'll happily pay it 10X over.

Also, recall the last "bubble" started at $.04 If you called it as the bubble it was and sold out your earnings at 7X that, you'd have sold for a cool $.28 per bitcoin. Unlike those poor folks who stuck around for the entire bubble who only got to sell for $10 or $7 per bitcoin after the initial crash. Even if it is a bubble, selling at the start of the bubble is the wrong move! And $70 value, over a normal of $10, is a mere 7X increase, which is probably just the tip of the iceberg if it's a real bubble.

I have no special knowledge. I don't know what the value will be tomorrow or the next day.

I just find that out of all possibilities, selling now is least likely to give me the best returns.

1- It is a bubble, like in 2011, and like 2011 value will shoot much much higher before crashing. Selling now is a bad idea.

2- It is not a bubble, steady growth at current rate will continue for some time before leveling off. Selling now is a bad idea.

3- It is a bubble, and somehow out of all possible values the bubble is at it's peak RIGHT NOW. Selling now makes sense! The only problem is that the odds of correctly guessing the peak value are effectively zero, so rationally I have to assume this is not actually the case.

You really have no imagination if you think those are the only possibilities. You left out a large number of other scenarios including negative growth after the crash for a long time (btc transactions have not increased enough to justify current prices, meaning speculation is what's driving prices), a large drop and long plateau of prices, like what happened to silver prices after the failed cornering of the market by the Hunt brothers. Then there's the worrisome influence of govt.. at least back in 2011 we had viable alternatives to MtGox and Dwolla, but now they are basically monopolies and subject to increased US scrutiny due to the link to Silicon Valley Bank, etc. Plus it's already been proven that btc's aren't as anonymous as once thought, and if even more cracking of that barrier goes on, that hurts too. And as I already stated, BTC isn't great for commerce as it's got too slow an average confirmation speed, and if you add a layer on top like an escrow service, that just adds to transaction costs making BTC less appealing. There are endless scenarios and it is utterly incomplete to think that only 3 things can happen from here on out.

And comparing penny-BTC days to 2012-3 is really not apt; it's like talking about the startup valuation of Apple vs today. The astronomical growth phase of Apple stock has already taken place, so good luck thinking that BTC will go to five digits. Even assuming the bare minimum for that--10,000 USD/BTC--do you even know what that implies? That's over $120 BILLION dollars.And realistically since btc's keep getting mined, it's actually even more than $120B, more like $150B if we're talking in a few years' time. Where, praytell, is that money going to come from? Hedge funds and such might risk a little money but $150B? You're dreaming. The only way that happens is if BTC gets legitimized and I doubt govts are willing to share their fiat money powers with something like BTC.

Using your own example btw it would make sense for someone who thought that June 2011 was a bubble to cash out as it was going up. Say they got in at $1 and got out at $20, that would leave them with $19 profit per BTC and after the crash they could have bought their way back in. Same as now. It's ~$70 now. Say someone sells out now, but the actual peak is $83 after which it goes down to $10. Then they buy back in at $10-15. There are good reasons why one might want to take at least SOME profit now because of the risk of a crash, and buy back in later if appropriate.

 

[WhoBeDaPlaya]

You literally couldn't buy 10X of the current best mining cards on amazon and get them in a day, unless you paid the absurd premiums some of the 3rd part sellers charged, at regular price there was usually zero or only a couple units available if you were lucky.

This. I had to source my twelve 5830s from SE Asia, where they hadn't yet heard about Bitcoin

 

[Chiropteran]

You really have no imagination if you think those are the only possibilities. You left out a large number of other scenarios including negative growth after the crash for a long time (btc transactions have not increased enough to justify current prices, meaning speculation is what's driving prices), a large drop and long plateau of prices, like what happened to silver prices after the failed cornering of the market by the Hunt brothers.

That still falls under either my 1st or 3rd example. Unless you are phenomenally lucky, or can predict the future, the end result doesn't really matter- you can not predict the top of the bubble. Whether bitcoins slowly wither away and die into nothing after the crash or if they start going back up, either way it would be useful and nice to sell at the peak, but you can't know when the peak actually occurs.

Then there's the worrisome influence of govt.. at least back in 2011 we had viable alternatives to MtGox and Dwolla, but now they are basically monopolies and subject to increased US scrutiny due to the link to Silicon Valley Bank, etc.

Same thing, unless you can predict exactly when this will happen and exactly what the results are, you are just guessing randomly at when the value is going to turn around. The reason is not important, the end result still matches either my 1st, 2nd, or 3rd example.

And comparing penny-BTC days to 2012-3 is really not apt; it's like talking about the startup valuation of Apple vs today. The astronomical growth phase of Apple stock has already taken place, so good luck thinking that BTC will go to five digits. Even assuming the bare minimum for that--10,000 USD/BTC--do you even know what that implies? That's over $120 BILLION dollars.And realistically since btc's keep getting mined, it's actually even more than $120B, more like $150B if we're talking in a few years' time. Where, praytell, is that money going to come from? Hedge funds and such might risk a little money but $150B? You're dreaming. The only way that happens is if BTC gets legitimized and I doubt govts are willing to share their fiat money powers with something like BTC.

The thing is, that is exactly how I thought when I first got involved in bitcoins. 1 BTC was worth $6-7 and mining was seemingly a slow process (though it was tremendously easier than it is now). I figured the lucky bastards who bought thousands of BTC at pennies were the lucky ones and I'd never have a chance to make any serious money.

And then I watched BTC crash, fall to under $2, and then climb back up slowly at first and then faster recently all the way up to $70. That wass a huge amount of potential money. Yeah, maybe I missed out on the .01 to $7 700 fold increase in value, but there was a 35 fold increase right under my nose and I let it go because of negative thinking like you are spreading in this thread right now.

Luckily, while I didn't buy any cheap coin when I should have, I did keep my mined coin, so I am a bit ahead of where I would otherwise be.

Nothing is guaranteed, things could happen, but I believe it's more likely than not that bitcoins will continue to appreciate over time. I've come to realize that for every bit of negative news and drop in value, there are investors willing to buy up the coins as they drop from the recent high and push them back up. I personally think it's inevitable that bitcoins will continue to go up in value over time, it's just a question of how long it takes.

Using your own example btw it would make sense for someone who thought that June 2011 was a bubble to cash out as it was going up. Say they got in at $1 and got out at $20, that would leave them with $19 profit per BTC and after the crash they could have bought their way back in. Same as now. It's ~$70 now. Say someone sells out now, but the actual peak is $83 after which it goes down to $10. Then they buy back in at $10-15. There are good reasons why one might want to take at least SOME profit now because of the risk of a crash, and buy back in later if appropriate.

Oh, I agree completely. I have cashed out some, and will continue to cash out a few BTC at a time as prices rise, and re-buy when prices fall. I just wanted to respond to the whole "sky is falling, bubble!" post because I personally didn't think it was accurate. Of course, if you could know exactly when and how much price will drop, it would make perfect sense to sell all your BTC at that moment and re-buy at the lowest possible point before value starts to increase again... but nobody can do this. IMO the safe way to do it is to just selll/rebuy a small fraction of your total bitcoins at each price level, but I'm not going to try to stop you from using your strategy.


I've mined a grand total of about 350 coins. I've foolishly cashed out the majority of them at much lower than current prices. I've seen the forums, I've seen the charts. Value has gone up in the months before I started, it's gone up in the months after I started, and even after the great crash of June 2011 value has gone up above that point.

So far, every single time I have sold coins, it has been a mistake. Value has gone up. Not a single time was selling bitcoins a smart decision, I'd simply be better off today if I kept every single coin. But you seem so sure that this time, selling is the smart move, even though it's been the wrong move every other time in the past? Maybe you are a right, but I think if you are it's just random luck. I think value could easily increase to $99 before crashing. Or $137. Or $497. Or it might "crash" from $70 down to $61, and then bounce right back up and surpass $80 in a day. It's not a predictable market.

In my case it comes down to a simple truth. If I am wrong, and value crashes before I cash out anymore, I'd be sad but ultimately I'd walk away fine, down a few hundred dollars in electricity at worst. But if I am right in my theory about value increasing, and I cash out before that happens, I'll just want to die, knowing I could have had hundreds of thousands of dollars if I only waited a few years, when instead I threw it away to get some money to buy some toys. The risk IMO is far greater in cashing out, so I am holding the majority of my coin.

 

[blastingcap]

So far, every single time I have sold coins, it has been a mistake.

OK, I think I see where you are coming from. I don't see BTC going to five digits though. The problem is scale: you can't get those spectacular returns unless you were there near the beginning for most things in life, whether dot-com IPOs or BTCs. At some point one should cash in the chips and take that money and invest it in something else, such as a BTC derivative that acts much quicker (say, average 30 second transaction confirmations instead of 10 minutes). BTC is great and all but that 10 minute wait period for one stinking confirmation is frustrating and ultimately I think it's either got to change (if possible to recode), or people will leave for faster currency. There is an opportunity cost associated with holding onto any currency, so sticking with BTC indefinitely may or may not be the best use of resources... as I was explaining to my parents a long time ago, they could either cling to their MSFT stock in the hopes that it would go back up to its former peaks or higher, or they could cash out and invest that money elsewhere, such as AAPL. Did they listen? Nooooo. Even if MSFT had crawled back up, they would've done so much better with AAPL stock instead. Big opportunity missed. Opportunity cost is a real cost.

I also think miners have more of an attachment to their BTCs than people who buy and sell BTC all the time, and that probably hurts miners because sentimental attachment gets in the way of cold blooded trades. But the coulda-woulda-shoulda hindsight affects all investors, so I wouldn't agonize too much about missed opportunities. I sold off most of my coins for $10 on average, but really, if we had rock solid faith in BTC we would have bought BTC by the barrelfuls when it was under $3, rather than mine. Hindsight is 20/20.