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Bitcoin mining made easy

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Cheesecan
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Re: Bitcoin mining made easy

Post by Cheesecan » 06 Apr 2013, 22:52

varikonniemi wrote: I know ASICs are coming and will make GPU mining obsolete, i just made a bet that it won't happen before i get ROI.
Alright was just curious about your reasoning in choosing GPU mining at this point. Do you plan to sell this PC in a few months and then reinvest in new hardware?
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Licho
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Re: Bitcoin mining made easy

Post by Licho » 07 Apr 2013, 00:57

Btw there is a transaction fee in bitcoin - it goes to miners.

And I consider it much more fair than other forms of currency. Ok early adopters have advantage- that is always true but they are only creating a finite number of coins then its like gold that cannot be mined further or a premium land.

Its certainly more fair than purely imaginary unlimited currency we currently have. Its easier for holders of ordinary currency to gain more of it or for those that manipulate it like banks.

But I think that bitcoin will be killed by debt, just like real currency where debt can exceed total available many times.

If you borrow bitcoins with interest rate eventually it will be debt clogged so you have to forbid borrowing with interested forever (impossible).
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SpliFF
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Re: Bitcoin mining made easy

Post by SpliFF » 07 Apr 2013, 04:09

Licho I don't really understand what you mean by "debt clogged". You seem to be equating it to the concept of "sovereign debt" but I don't see how that could really be an issue for the currency unless you are concerned about official exchange rates or something. No organisation can ever force bitcoin users to pay back a debt except in the currency they purchased it in nor can they enforce "official" rates or any such nonsense.

The "value" of any given bitcoin will ALWAYS be what the seller of a service and the buyer of the service agree upon, regardless of any investment, trading or IMF malarkey. Tradional currencies fail because we always trust the wrong people (IMF, Federal Reserve, Banks, etc) to manage them and what those organisations want above all else is to steal all the money. Bitcoin does not suffer from this because it can only be partially controlled through laws/taxation and central governance. The first is difficult and the later is impossible. Governments have attempted to control barter for centuries but it's ultimately pretty futile if people want it badly enough.

In Australia for example you are supposed to give the government 10% of any barter exchange but since that involves calculating an AUD rate for the goods in question (generally by comparing to the non-barter cost) this gets complicated very quickly,

ie: when the value of the goods is debatable, say, I make websites and you write songs. Neither has any "official" price, since we can both set our own price. I could charge $1 an hour or $500 depending on a subjective opinion of my skills. Your album could be $1 a track or a $500 limited edition collectable. The only "value" is what we agree upon and the same is true of bitcoins.

Only bitcoin exchanges or people buying coins with other currencies really need to care about the exchange rate of bitcoins. Your intended/typical bitcoin user needs to only care about who will give him the most coins for a given service (or charge the least).
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varikonniemi
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Re: Bitcoin mining made easy

Post by varikonniemi » 07 Apr 2013, 07:49

Licho wrote:Btw there is a transaction fee in bitcoin - it goes to miners.

And I consider it much more fair than other forms of currency. Ok early adopters have advantage- that is always true
Transaction fee is optional and only serves to ensure your transaction is processed ASAP.

Early adopters have a share of Bitcoin because they do real work (expend energy) to make a secure payment network possible. Once this share is used, they have nothing in Bitcoin.

I would not call it an advantage, but payment for work done. Who would expend energy if there was no reward?
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Cheesecan
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Re: Bitcoin mining made easy

Post by Cheesecan » 07 Apr 2013, 11:05

Seems to me like the people selling mining equipment are earning much more than the miners themselves.
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varikonniemi
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Re: Bitcoin mining made easy

Post by varikonniemi » 07 Apr 2013, 11:30

Yes it will be really interesting to see if i will ever get ROI from this round of mining equipment. Mining just the GPU:s back is entirely different than mining the whole PC.
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knorke
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Re: Bitcoin mining made easy

Post by knorke » 07 Apr 2013, 11:51

SpliFF wrote:Only bitcoin exchanges or people buying coins with other currencies really need to care about the exchange rate of bitcoins. Your intended/typical bitcoin user needs to only care about who will give him the most coins for a given service (or charge the least).
But is excactly that not the problem at the moment? It seems many users do not use bitcoins to pay for stuff but instead exchange with other currencies in hope to make some money. Since there is not many places where you can spend bitcoins these speculations influence value too much...

Second problem is the mining, for average person that is it hard to understand and to some it might look computers printing money. That probally does not help acceptance.

varikonniemi, do you already know what to buy with the gained bitcoins?
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Licho
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Re: Bitcoin mining made easy

Post by Licho » 07 Apr 2013, 13:44

Debt thing is really simple..
imagine economy is running on bitcoin.

Imagine that you want to take a loan to buy a house or a quantum levitating skate board or whatever.
You get 100 BTC and you have to repay 150BTC (in the future due to interests).

But there is no BTC growth, number of BTC is limited in the system and the interests will lead to accumulation of debt.

The final stage is where you have rich banks and poor people who owe BTC to the bank but there is simply not enough BTC in the system to repay all debts..


In real world economy it can be mitigated not only by bankrupcies but also by inflating economy and dilluting the debt away. You cannot do that to BTC economy because you cannot make more BTC..
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luckywaldo7
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Re: Bitcoin mining made easy

Post by luckywaldo7 » 07 Apr 2013, 16:49

I'm actually really curious to know how bitcoin loans would work. Because there are no banks, that's the point really. You don't need a central focal point for money transactions when the tender is virtual and transactions are recorded by peers.

You could have loans that get spread out over peers, but what would prevent you from taking a huge loan and never paying it back?
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Hoi
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Re: Bitcoin mining made easy

Post by Hoi » 07 Apr 2013, 17:05

When someone finally invents a financial means which is less problematic than the current money, why do people immediately try to introduce this flawed idea of debt again? Debt only causes problems. Adapt the system so no debt is needed, not the other way around.
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luckywaldo7
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Re: Bitcoin mining made easy

Post by luckywaldo7 » 07 Apr 2013, 17:44

I don't think that debt itself is a bad thing; what's bad is the slippery slope designed by lenders to keep you in debt for as long a possible, and make you pay back far more than you ever should have.

But otherwise the ability to borrow money opens up a lot of possibilies for investment risks, which are also fine when handled sensibly.
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SirMaverick
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Re: Bitcoin mining made easy

Post by SirMaverick » 07 Apr 2013, 19:24

luckywaldo7 wrote:I'm actually really curious to know how bitcoin loans would work. Because there are no banks, that's the point really. You don't need a central focal point for money transactions when the tender is virtual and transactions are recorded by peers.

You could have loans that get spread out over peers, but what would prevent you from taking a huge loan and never paying it back?
Like you do with your bank: Contracts with penalties.
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Neddie
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Re: Bitcoin mining made easy

Post by Neddie » 07 Apr 2013, 21:07

luckywaldo7 wrote:I don't think that debt itself is a bad thing; what's bad is the slippery slope designed by lenders to keep you in debt for as long a possible, and make you pay back far more than you ever should have.

But otherwise the ability to borrow money opens up a lot of possibilies for investment risks, which are also fine when handled sensibly.
Which is a necessity only because the economic model is structured to reward currency volume and the resources for major efforts are beyond the majority under normal conditions. Currency debt is an artifact of arbitrary and universal income inequality, and thus Capitalism.
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Licho
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Re: Bitcoin mining made easy

Post by Licho » 08 Apr 2013, 02:48

Its simple there will always be banks. By banks I mean anyone with excess BTC who can invest into something.
Those will become lenders = "banks". It does not matter whether its multinational institution or some random teenager with too much BTC from early days.

In real world you don't need banks for transactions or lending either and it still happens. It will happen with BTC too sooner or later.

Interests and not enough bankrupcies lead to debt accumulation to creation of obligations to repay debt which can never be systematically repaid across whole economy.

Its also natural that those who invest their excess BTC want some investment return back, so interests wont just go away.

The rich will become richer, the poor will accumulate debt - thats the rule of any economy unless you use redistribution of wealth.
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SpliFF
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Re: Bitcoin mining made easy

Post by SpliFF » 08 Apr 2013, 06:28

If the debts can't be repaid then the only losers will be the lenders - who by your own definition have "excess BTC". If they have a real-world legal contract with the debter then they can probably recover their loses in real currency through the courts. Either way it's really only a problem for people who gamble on money.

OTOH if the only solution to a lack of BTC is to increase the value of the currency (this would have to be done through almost unilateral agreement of every BTC accepting service) then maybe they'll profit but it isn't really plausable that if this happened the exchanges wouldn't immediately adjust their real currency rates accordingly.

You still haven't convinced me that any of this should matter to anybody who isn't speculating on BTC and quiet frankly I'm unsympaphetic to their imaginary problems (if you can't afford to lose then don't play).

Keep in mind that the only "real-world" issue with inflation for a typical person who exchanges cash for services (as opposed to lends/borrows/converts currency) is when you need to hire a truck to carry all the coins to pay for a beer. Currency was invented so you didn't have to lug a menhir down to the local fishmonger so if the currency itself becomes heavier and costlier than the services you have a problem. Being virtual bitcoin suffers none of these issues so if a beer costs 0.000001 BTC or 100000 BTC it makes no difference. Running out of BTC can only happen if people hoard them or lose them and if they become valuable enough then hoarding them would make little sense.

Also, there is nothing ruling out the creation of another virtual currency with the same properties as BTC but starting again from zero. In fact these already exist in fringe domains like Eve credits and WoW gold. If BTC is popular enough that running out of it is a real issue then I'm quite sure it could be supplimented or replaced with something having a larger pool.

Anyway, there can never be a Bitcoin equivalent of Cypress or GFC for the simple reason that there is no way for any central authority to steal peoples coins (unless you're dumb enough to leave your coins in an exchange). Anyone who thinks these economic "fixes" are anything but pure theft by "trusted officials" is kidding themselves.
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Cheesecan
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Re: Bitcoin mining made easy

Post by Cheesecan » 08 Apr 2013, 19:21

SpliFF wrote: Also, there is nothing ruling out the creation of another virtual currency with the same properties as BTC but starting again from zero. In fact these already exist in fringe domains like Eve credits and WoW gold. If BTC is popular enough that running out of it is a real issue then I'm quite sure it could be supplimented or replaced with something having a larger pool.
Those currencies are not the same since they are not decentralized.

ISK (Eve credits) have a fixed exchange rate which is about 1 billion ISK/60 day GTC.
This isn't entirely true though because it's possible to purchase them cheaper by cheating, but that's a bannable offense. CCP has the power to issue and seize ISK among other things, so they might even qualify as a central bank. I haven't played WoW but I'm guessing they did something similar.
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NeonStorm
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Re: Bitcoin mining made easy

Post by NeonStorm » 08 Apr 2013, 23:10

If electricity is used to heat your house/apartment, you save money elsewhere. Real money.

How do you calculate with that in mind?


Giving more money to peoples which already own money just because they own money is wrong...

Personally, I think actions which allow exponential growth for personal properties should be illegal/made-impossible.
* In an ideal world, you could not make personal money without putting some effort (linearly to what you get) in - even if it is more for one and less for another "job".
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SinbadEV
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Re: Bitcoin mining made easy

Post by SinbadEV » 09 Apr 2013, 00:54

NeonStorm wrote:If electricity is used to heat your house/apartment, you save money elsewhere. Real money.

How do you calculate with that in mind?


Giving more money to peoples which already own money just because they own money is wrong...

Personally, I think actions which allow exponential growth for personal properties should be illegal/made-impossible.
* In an ideal world, you could not make personal money without putting some effort (linearly to what you get) in - even if it is more for one and less for another "job".
Communist.

Here's the problem... people work for "advantages"... means of production... ways to multiply the results of their labour... even something as generally accepted as buying better tools or getting an education can improve the "output" you get from your "input"... BitCoins might be the wrong answer to the need for a decentralized currency but that doesn't mean that the act of investing one's excess resources to improve the efficiency with which you acquire further resources is wrong.

If you take an "outside" look at the economy the problem is not a matter of fair reward but of motivation... we need work done so we motivate people to work by offering rewards... with the ultimate carrot being held in front of the masses being the chance of moving into a position where they will no longer need anything and will no longer need to work... it's an impossible fantasy that's being sold to each new generation... the promise of "not having to work anymore if you just work hard enough now". What we need is not a better or fairer system of rewards, we need a way to motivate people to better society without resorting to artificial scarcity and the threat of their family starving.
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NeonStorm
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Re: Bitcoin mining made easy

Post by NeonStorm » 09 Apr 2013, 13:24

I neither agree with:
* "every job gives you same reward"
* "reward should not alter with efficiency at work"
and that is what "classic" communists agree with.

The problem with legality of "huge" rewards is:
* It is only legal, because else peoples would be motivated to take some involved money illegally.
-> That can't happen with some coherent digital logging systems, if not a huge percentage of managing peoples are corrupt.

What we need is:
* every position where the possible personal gain is (much) greater than the legal personal gain has to be managed by enough peoples that the possible personal gain (equal parts) is legal.
-> Computer programs could make the communication, polls and managing easier.

IF Bitcoin (or their users) will ever have to pay taxes to countries.
-> It would be good if Bitcoin logs your expense/gain.
-> BitCoin treats the difference like property of a company and the pay-out to "personal money" like a job merit/earnings, but not if you buy more Processors from that money (treated as company investment).
-> That (or similar) would allow to apply common laws on that difficult topic.
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SinbadEV
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Re: Bitcoin mining made easy

Post by SinbadEV » 09 Apr 2013, 17:56

True. One of the key issues causing the widening socio-economic disparity* is that the laws legitimize the unfairness.

*(learned that phrase from Ratchet & Clank)

Stuff like BitCoin "could" break the system but unfortunately it was conceived in a way that rewards investment... though in a way the companies making these new and better BitMiners ARE contributing to the science of supercomputing... if we ever need to calculate something really really complex humanity will be glad we have way more processing power than we could ever reasonably need for anything practical... you know... or it could be accelerating the rise of SkyNet.
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