Bitcoin on the rise

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bottlerocks
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Re: Bitcoin on the rise

Post by bottlerocks » Wed Dec 07, 2016 3:30 pm

Some concise big picture analysis:
https://www.youtube.com/watch?v=WoWY2UzIB_8

workathome
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Re: Bitcoin on the rise

Post by workathome » Wed Dec 07, 2016 4:22 pm

Is mining BTC still feasible for an individual?

I did a little mining a few years ago with a couple graphics cards, but it looks like that's not workable anymore.

bottlerocks
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Re: Bitcoin on the rise

Post by bottlerocks » Wed Dec 07, 2016 5:21 pm

Not with GPUs. There have been 7-8 generations of ASIC development that have made each previous generation of mining hardware obsolete. There has been a lot of shady dealings with mining hardware developers in the past (see Butterfly Labs & KNC Miners for good examples) so I've stopped following who the big players are nowadays. I'm sure there's a $500 single piece of hardware out there that will generate 0.1-0.2 BTC per month on generous mining pools. To make real money you'll have to have cheap power and hope BTC rises in the future. Also you'll have to stay up to date with the latest hardware. A single miner nowadays probably has more hashing power than the entire network did 4 years ago.

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Seppia
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Re: Bitcoin on the rise

Post by Seppia » Wed Dec 07, 2016 5:45 pm

bottlerocks wrote:Some concise big picture analysis:
https://www.youtube.com/watch?v=WoWY2UzIB_8

Sorry
I mean no disrespect but, in the first two minutes I heard
- a "big picture" description where he basically just describes the past in a textbook rear view mirror analisys that is worth zero.
- "this has been growing a lot in the short term" so this is good for convincing people? Wait is he shilling or making an argument?
- "but we are able to see the long term" referring to a graph showing data since 2011.

I then closed the video, had enough

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daylen
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Re: Bitcoin on the rise

Post by daylen » Wed Dec 07, 2016 5:54 pm

@Seppia

:lol: THIS is a prime example of the ignorant use of statistics. I can see where Jacob is coming from when he said basic stats shouldn't be taught to high schoolers; it results in people like this giving bigger idiots confidence. The worst part is that his like/dislike ratio is north of 20!

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Re: Bitcoin on the rise

Post by jacob » Wed Dec 07, 2016 6:24 pm

In more poetic terms. And in less poetic terms.

This was more a comment on general principles than anything wrt bitcoin.

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bryan
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Re: Bitcoin on the rise

Post by bryan » Wed Dec 07, 2016 9:34 pm

my own feelings at the moment:
- since 2013, 2014 governance is more questionable (good and bad, depends on your perspective) and clear it will not scale for some use-cases (and those must build layers on top or to the side)
- no other investment like it (other than the other cryptos, of which ethereum has the lead for smart contracts and zcash/monero have the lead for anonymity. The first two have open issues, concerns, at least.) as accessible and simple (great choice in the last few years of current events which are trending in the same direction)
- cyber-techno-anarchy as predicted (digital/physical property, smart contracts, decentralized prediction markets) still in the works but certainly marching in that direction and not clear on ETA. Bitcoin accepted there.
- un-announced competitors can always come out of the shadows to kill BTC (decent nation state crypto-currency or Apple are the ones I am keeping an ear to the ground for)

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daylen
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Re: Bitcoin on the rise

Post by daylen » Wed Dec 07, 2016 9:51 pm

bryan wrote: - un-announced competitors can always come out of the shadows to kill BTC (decent nation state crypto-currency or Apple are the ones I am keeping an ear to the ground for)

The only competitor Bitcoin has is a better crypto-currency algorithm/protocol. Decentralization is the whole point of Bitcoin. I do not know much about this subject, but this is my current understanding.

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Re: Bitcoin on the rise

Post by jacob » Wed Dec 07, 2016 9:54 pm

Since electricity-cost seems to be the Liebig limit on bitcoin(*), I wonder if any of you nerds are able to do a rough back of the envelope calc on the approximate cost in kWh per bitcoin is. I presume it's been pretty constant-ish?

Also would like to know what the total energy cost (kWh again) of the total collection of bitcoins is?

If possible ... can we get within half an order of magnitude or better?

(*) Unless the lowest cost producers all get it for free?!

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BRUTE
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Re: Bitcoin on the rise

Post by BRUTE » Thu Dec 08, 2016 12:50 am

daylen wrote:The only competitor Bitcoin has is a better crypto-currency algorithm/protocol. Decentralization is the whole point of Bitcoin. I do not know much about this subject, but this is my current understanding.
depends on what it's competing for - decentralization only has advantages in a few very specialized use case. that's why humans still mostly use checks, cash, credit cards..

@jacob:

the kWh per btc mined has been going down very dramatically, probably orders of magnitude every few months, since its inception. brute has no idea where they currently are, but like mentioned before, several years into ASICs. brute is sure the efficiency gains have started slowing down a while ago, and will approximate general purpose efficiency gains over time.

https://bitcointalk.org/index.php?topic=520977.0

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daylen
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Re: Bitcoin on the rise

Post by daylen » Thu Dec 08, 2016 1:18 am

Shouldn't decentralized currency be more antifragile? As long as the general population believes that more centralized currencies backed by big governments are prone to failure, then Bitcoin should thrive. Perhaps in the long run everything else will fail, and Bitcoin (or the like) will survive.

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bryan
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Re: Bitcoin on the rise

Post by bryan » Thu Dec 08, 2016 4:45 am

daylen wrote: The only competitor Bitcoin has is a better crypto-currency algorithm/protocol. Decentralization is the whole point of Bitcoin. I do not know much about this subject, but this is my current understanding.
Bitcoin has a lot of competitors for it's various utilizations.

To be fair the "whole point of Bitcoin" is open for (re-)interpretation. "Digital money" has always been the goal and it turns out there were a lot of challenges and show-stoppers along the way, "trusted third parties" being the last bit to remove which is what Bitcoin seemingly added.

@jacob I don't get think the Liebig limit ties in since Bitcoin supply is a feedback system of the miners' capability to solve a puzzle, if you will. There aren't any resource constraints to produce a BTC. The Liebig limit would be Bitcoin supply algorithm itself? Maybe you could say the Liebig limit is simply capital in this case (used for mining HW, energy harvesting, buying energy, R&D, or anything). If we had free electricity, BTC don't care; if we have 10GHz processors, BTC don't care; if you are the last human on earth mining by pen and paper, BTC don't care (well not actually because the feedback loop requires forward progress and the feedback only triggers after 14 BTC days, thus why so many alt-coins die: massive hashing power mines them for a while then all jump ship and all the little CPU miners left can't find the next 10 minutes.) At different stages of Bitcoin's life the % of revenue spent on specific cost inputs has been changing. Not sure where it stands today. https://www.quora.com/How-much-money-do ... iners-make

I didn't do the math but I'm sure there are folks at the bitcoin forums that have done some at various points!

bottlerocks
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Re: Bitcoin on the rise

Post by bottlerocks » Thu Dec 08, 2016 11:05 am

Seppia wrote:
bottlerocks wrote:Some concise big picture analysis:
https://www.youtube.com/watch?v=WoWY2UzIB_8

Sorry
I mean no disrespect but, in the first two minutes I heard
- a "big picture" description where he basically just describes the past in a textbook rear view mirror analisys that is worth zero.
- "this has been growing a lot in the short term" so this is good for convincing people? Wait is he shilling or making an argument?
- "but we are able to see the long term" referring to a graph showing data since 2011.

I then closed the video, had enough
I can't access the video at the moment to verify my first impression but I do not understand your criticisms.
-His big picture is showing you current vs. past user base and transaction numbers...good basis for supply/demand arguments.
-I think he's building up to a point later about the recent halving (aka supply drop in half)...can't remember exactly what was said.
-What else would you like to see for a long term representation? Bitcoin has only existed since 2009 and user adoption was <10,000 people before 2011 if I remember right.

Just curious about your specific points. Of course he's shilling, it's bitcoin lol.

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Re: Bitcoin on the rise

Post by jacob » Thu Dec 08, 2016 11:20 am

What I meant is ... compare to computational science. The depth/difficulty of problems is not limited by human ingenuity as much as what you can reasonably expect to compute on current hardware in a period of 6 months or say 5000 CPU hours/CPU. It's unlikely that you'd get much bigger grants than that and you have to publish. And humans are smart enough to come up with harder problems. Therefore the limit in computational problem solving is hardware speed.

With bitcoin I figured the evaluation would be a combination of market supply/demand BUT supported by the supply of newly mined coins which would be determined by hardware+electricity. Much like the price of gold can't drop too far because miners will bring in machinery, etc. (which costs money). And on the flip-side that if a new gold mine is (or rather was, because that doesn't happen anymore) ... if a new continent is discovered and we steal their gold, then the price of gold falls dramatically.

Hence, I'd expect the bitcoin market to somehow price in the expected evolution in hardware in the current price ... but have the floor set by the cost of electricity?

I guess my next/alternative question would be. Suppose I started from scratch with bitcoin using modern hardware. I pay 5c/kWh. How much would it cost me to personally mined all the bitcoins in current existence?

bottlerocks
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Re: Bitcoin on the rise

Post by bottlerocks » Thu Dec 08, 2016 11:54 am

Jacob there's a wrinkle in all of this which is Difficulty. Basically bitcoins are mined at a constant rate no matter what, it's just that those who "try harder" get more (https://en.wikipedia.org/wiki/Proof-of-work_system). So if you were the only person mining for now until 2140, your cost would be very negligible as you wouldn't even need modern hardware...you could use a CPU. The floor is probably tied to total electricity consumption (I've seen research on this before and will try to dig it up) but that's fundamentally tied to how many people are mining and how hard/efficiently their hardware is pushing.

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daylen
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Re: Bitcoin on the rise

Post by daylen » Thu Dec 08, 2016 12:05 pm

bryan wrote: Bitcoin has a lot of competitors for it's various utilizations.

To be fair the "whole point of Bitcoin" is open for (re-)interpretation. "Digital money" has always been the goal and it turns out there were a lot of challenges and show-stoppers along the way, "trusted third parties" being the last bit to remove which is what Bitcoin seemingly added.
I am speaking of competitors for the main Bitcoin uses, as a black market currency and a hedge against government dysfunction.

Being digital is clearly not unique for currency these days, so whatever the original goal of Bitcoin was, decentralization is what distinguishes it from everything else.

EDIT: I should probably be more clear; I am speaking more about decentralized crypto-currency in general. Bitcoin is just a single protocol, and there is no doubt that it will be replaced with a better protocol in the future (something more akin to ethereum).

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bryan
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Re: Bitcoin on the rise

Post by bryan » Thu Dec 08, 2016 3:05 pm

@jacob, some of what you are saying makes sense (at least given a snapshot of the world-state; bitcoiners, miners talk about it indeed) but the big unknown in the equation is the exchange rate/value. If you start from zero w/ a secret (BTC clone) ERECoin today which produces 1 coin every 10m at 5c/kWh and your mother will buy each coin for a price of $1, you can easily use <1Wh to mine the coin and thus profit ~$1 per coin. Throwing another CPU at it doesn't make sense because the reward is always the same and you are just playing the lottery (where your chance of winning in PoW is essentially $work_you_did/$total_work_done) for it.

@daylen, I'm not sure how to really constructively reply. It's really quite a complex system of incentives out there. "Decentralization" in of itself is not a good or bad thing (just as how centralization in of itself is not good/bad). Bitcoin author sought decentralization as a response to the system-state of the time.

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daylen
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Re: Bitcoin on the rise

Post by daylen » Thu Dec 08, 2016 3:23 pm

@bryan I never said that decentralization was good/bad; I only mentioned that Bitcoin was decentralized and speculated that decentralized currency is antifragile.

I admit that looking back at my comments, I haven't been very clear in what I was trying to say. Just ignore me :P

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Seppia
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Re: Bitcoin on the rise

Post by Seppia » Fri Dec 09, 2016 3:42 am

bottlerocks wrote:
I can't access the video at the moment to verify my first impression but I do not understand your criticisms.
-His big picture is showing you current vs. past user base and transaction numbers...good basis for supply/demand arguments.
-I think he's building up to a point later about the recent halving (aka supply drop in half)...can't remember exactly what was said.
-What else would you like to see for a long term representation? Bitcoin has only existed since 2009 and user adoption was <10,000 people before 2011 if I remember right.

Just curious about your specific points. Of course he's shilling, it's bitcoin lol.
- saying "so here it went up, it became a bubble, it crashed, it stayed flat for about a year and now it's going back up" is not really helpful analysis. He's basically describing the graph which I think most people are capable of doing.

- can't comment, stopped watching after a couple minutes.

- the point is that there is no long term with bitcoin. Ferrari stock (ticker: RACE) has been on the market for about a year. This doesn't make a 1 year analysis "long term"

Hope this clarifies

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BlueNote
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Re: Bitcoin on the rise

Post by BlueNote » Fri Feb 10, 2017 7:28 am

If we're one day able to process brute force encryption cracking algorithms in "quantum computers", or some other unforeseen technology, would that not cause the value of bit coin to crash? Or on the other hand would it simply cause better encrypted bit coins to be developed, but still wipe out the original bit coins? Has anyone ever calculated the odds of this happening in their lifetime?

I've tangentially read about people mining non-bitcoin crypto currencies and making money using fairly cheap hardware. The volatility, liquidity and risk of these alternate currencies seemed higher then bitcoin so there was a good chance that you'd never cross the breakeven point doing this. Of course I'm simply making my observations from the perspective granted by MT. S so YMMV.

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stayhigh
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Re: Bitcoin on the rise

Post by stayhigh » Fri Feb 10, 2017 1:00 pm

BlueNote wrote:If we're one day able to process brute force encryption cracking algorithms in "quantum computers", or some other unforeseen technology, would that not cause the value of bit coin to crash?
It would be easier and more profitable to break into the bank or other places. There is much more money.
https://en.bitcoin.it/wiki/Quantum_comp ... nd_Bitcoin

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bryan
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Re: Bitcoin on the rise

Post by bryan » Fri Mar 10, 2017 6:23 pm

big news as a Bitcoin ETF was not approved today: https://www.sec.gov/rules/sro/batsbzx/2017/34-80206.pdf
First, the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated. Based on the record before it, the Commission believes that the significant markets for bitcoin are unregulated. Therefore, as the Exchange as ot entered into, and would currently be unable to enter into, the type of surveillance-sharing agreement that has been in place with respect to all previously approved commodity-trust ETPs — agreements that help address concerns about the potential for fraudulent or manipulative acts and practices in his market — the Commission does not find the proposed rule change to be consistent with the Exchange Act.
Exchange rate fell from to 1.29 USD/mBTC to 1.07 USD/mBTC. I suspect if the ETF had been approved the rate would have gone to >2 USD/mBTC within the month.

So it seems the only thing holding it back was surveillance-sharing agreements of exchanges? There is some requirement to know who you buy the commodity from (how many transactions back?) etc.

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jennypenny
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Re: Bitcoin on the rise

Post by jennypenny » Sat Mar 11, 2017 10:02 am

Wish I'd jumped in yesterday after the announcement. Price already recovering.

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Re: Bitcoin on the rise

Post by Augustus » Sun Mar 12, 2017 12:13 am

I think you're missing the purpose of Bitcoin, it's less a get rich quick speculation scheme, and more a way to bypass financial regulation. The Chinese for example are some of the most financially regulated people on the planet as far as freedom of moving money goes, and whodathunkit, they own ~50% of all Bitcoin. They use it to bypass restrictions imposed by their government.

I think speculation is silly, but if you need to buy something that needs to not be regulated by things such as tariffs, import restrictions, illegal drugs, etc then you purchase enough Bitcoin to buy it, then immediately send the Bitcoin to the seller to avoid the market fluctuations.

Because there is a demand for this, Bitcoin will remain useful and survive.

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BRUTE
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Re: Bitcoin on the rise

Post by BRUTE » Sun Mar 12, 2017 11:04 am

silly, maybe. enriching? certainly.

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