[Closed] Bitcoin Mining - And other Cryptocurrencies

Bitcoin prices seem to have gone ballistic over the last 24hrs - imminent crash, or just a blip? I guess that's the question.

I find this quite disturbing

Bitcoin prices seem to have gone ballistic over the last 24hrs - imminent crash, or just a blip? I guess that's the question.

While there's demand it will just keep increasing.

A correction could be overdue but who knows.

https://www.theguardian.com/technology/2017/dec/07/bitcoin-64m-cryptocurrency-stolen-hack-attack-marketplace-nicehash-passwords

It's the exchanges & wallets, not bitcoin that I don't trust...

@Stevet1 I don't think anyone knows. I lumped some speculative money in 5 weeks ago, and have made a 75% return. Bitcoin and Litecoin were tracking to same patterns, but the frenzy in Bitcoin specifically is obvious this week. Up 30% today!

The growth curve is exponential, so it could just be starting, or it might go pop in a minute.

How do you make money from this. its all well and good having numbers in accounts but with out a way to spend it whats the point?

30% today.......
If i'd had the guts to invest my new bike fund a few months back when they were ~£1k and cashed out today i'd now be mortgage free with new bike fund still intact.

Oh well........

tagnut69 - Member
How do you make money from this. its all well and good having numbers in accounts but with out a way to spend it whats the point?

You can't spend shares in Apple or whatever either. You sell them for GBP, or if you're using coinbase, EUR.

You can't spend shares in Apple or whatever either. You sell them for GBP, or if you're using coinbase, EUR.

Don't kid yourself the two are equivalent.

Apple shares are a lot more liquid and stable, they're also not regularly stolen from exchanges with no way to recover them. The market place, they trade in, is also highly regulated, basically very low risk compared to bitcoin.

footflaps - Member
Don't kid yourself the two are equivalent.

Apple shares are a lot more liquid and stable, they're also not regularly stolen from exchanges with no way to recover them...

POSTED 55 SECONDS AGO # REPORT-POST

I didn't say or (mean to) imply that they were.

All it will take is for someone whose holding a significant number of BTC to dump them &.....

I'd be tempted to if I were in that position.

As a market goes this is red hot!

I'd stay away now quite frankly, this kind of growth is unsustainable & a little suspicious IMHO. If something looks too good to be true.......

As a market goes this is red hot!

It went well beyond that some time ago....

Millions of [url= https://en.wikipedia.org/wiki/Greater_fool_theory ]greater fools[/url] jumping on the bandwagon hoping to make their fortune.

You'd think bitcoin was some sort of spring-blooming perennial herbaceous bulbiferous geophytes.

Never been interested in this bitcoin stuff [url= https://www.theguardian.com/business/2017/dec/07/rbs-sir-howard-davies-bitcoin-dantes-inferno-digital-currency ]but now it's got my attention[/url]. What's going on then? Are they really concerned about a modern version of tulipmania, or are they more bothered about the fact they don't control it and it's a potential threat to established state-run currencies?

I'd stay away now quite frankly, this kind of growth is unsustainable & a little suspicious IMHO. If something looks too good to be true.......

This has been said for a long time.

It's worth the ride if you can afford to lose your capital.

Biggest issue is trying to sell when it's risen so much. System becomes chaotic.

I have sold to cash pounds notes a few times though.

are they more bothered about the fact they don't control it and it's a potential threat to established state-run currencies?

This is part of it, and part of its appeal.

All it will take is for someone whose holding a significant number of BTC to dump them &.....

And currently they will get bought up.

Can I ask what is probably a dumb question please? 😀

Is the reason mining is so hardware intensive simply because if mining were "easy" then by implication the market would be flooded with bitcoins and devaluing them entirely?

A bit like if massive, massive gold reserves were suddenly found the price of gold would tumble?

Am I being too literal in my interpretation?

I'm just curious as to why the masses of processing power is needed and that's the only reason I can think of?

Thanks guys!

Prices have gone mental today. Started off at under £11k (which is still a significant rise from the £7800 I bought at 6 days ago), an hour ago they went through £14,500, back down to £11,500 now.

Madness!

Is the reason mining is so hardware intensive simply because if mining were "easy" then by implication the market would be flooded with bitcoins and devaluing them entirely?

Yes, it's to regulate the supply with the further twist that it gets progressively even harder as more and more coins are mined.

It is madness.

Btw if you want to invest in bitcoin or ethereum without the hassle, open a stocks and shares account and invest in xbt trackers. I opened my account with £100, stuck it on xbt.btc and it's now worth 160 (woo!). I intend to leave it there for 20 years as a marker for what happened to btc.

As a market goes this is red hot!

What's going on then? Are they really concerned about a modern version of tulipmania, or are they more bothered about the fact they don't control it and it's a potential threat to established state-run currencies?

Speculative bubbles aren't a good thing, so stopping them would be a start.

Also, the main attraction of Bitcoin and others, is the lack of control i.e. ideal for laundering money / selling drugs / guns / people etc.

Eventually it will end up being regulated unless it completely collapses first.

Although the best bit is when people use some dubious exchange and watch their money vanish. Either because the owners are crooks or because they were too cool to harden their systems.

It's an inherent flaw in the system though. With no central regulation, all you have to do is hack someone / an exchange and you can take their money and there's nothing anyone can do about it. Anyone can be hacked, just a matter of how hard it is to do so.

Reminds me of the Tech bubble / crash of 2001. I was working for a tiny loss making start up which was burning through cash like it was going out of fashion and we were valued (and trading on NASDAQ) at over $4bn. Totally insane. Company folded in the crash and all the share holders were wiped out. Although it was was chicken feed compared on Enron etc.

This has been said for a long time.

A 30% rise in value in one day is not what I call sustainable & more to the point, the hallmark of a bubble.

And currently they will get bought up.

The definition of a greater fool right there.

It's a commodity with no intrinsic value other than that fact that people want some. Apart from a very few outlets BTC is not a handy currency to hold.

At least daffodils look nice plus they come back every year!

You can't say that much about BTC.

Blockchain, however, is far more interesting. It's uses could have a far greater benefit if they could be implemented into everyday finance for example.

To add: I was chatting to a friend whose the global asset manager for a major bank & we were talking about BTC.

He said he couldn't find anyone who was willing to short BTC, which I thought was rather telling.

Still, there will be those who'll make money & those who lose money on BTC. Though I doubt BTC itself will be game changer some predict it to be.

When it crashes, & im pretty sure it will, what happens next will be interesting..

Blockchain, however, is far more interesting. It's uses could have a far greater benefit if they could be implemented into everyday finance for example.

Need to figure out a way for it not to be incredibly slow and power hungry.

Need to figure out a way for it not to be incredibly slow and power hungry.

elliptic - Member
Is the reason mining is so hardware intensive simply because if mining were "easy" then by implication the market would be flooded with bitcoins and devaluing them entirely?
Yes, it's to regulate the supply with the further twist that it gets progressively even harder as more and more coins are mined.

Really quite fiendish really, clever.

Just seems a waste of computing power though to create the bottleneck?

Still, interesting stuff!

The Bitcoin Network's groaning a bit this evening...anything above 10,000 unconfirmed transactions tends to slow things down, even with higher network transaction fees:

[url= http://blockchain.info/unconfirmed-transactions ]Blockchain Info[/url]

Regardless of whether it would add anything in a particular scenario.

Cf. “Private blockchain”

Oh, you mean a glorified database? Sure, we’ll spend thousands on oracle, why not spread the love...

^^^^^^^
Difference is you can delete rows from an Oracle table whereas blockchain is an immutable ledger. Some case studies in finance already out [url= https://www.ibm.com/blockchain/infographic/finance.html ]there[/url]

So how do you sell safely to GBP? Always seems very vague...

So how do you sell safely to GBP? Always seems very vague

I've said this quite a lot.

You can sell in blockchain to gbp. I've done it several times.

However blockchain is turning into a pain to buy. None of my cards work with it for some reason.

[url= https://en.m.wikipedia.org/wiki/Tulip_mania?wprov=sfla1 ]Tulip Mania [/url]

People keep relating and linking to Tulip Mania and Greater Fool Theory (housing market) and whilst there is always those ideas at play, it doesn't actually explain it away just to say everyone is a bit dumb and is clearly a bubble.

The whole situation is without precident and quite clearly has its own set of rules.

And also these things have been said time and time again. Sure it will crash and correct over it's natural life cycle but it's not going away.

It is unsecured and unregulated, it's not an investment its a punt, if you're happy with that cool.

Since when has anything being secured or regulated made for a safer investment?

Sure it's not 'backed' by anything we are familiar with as a measure of value but as we have seen in the past, security and regulation is only as good as the people and system behind it, who happen to have shown themselves to be a corrupt self serving bunch.

Not invested myself but it seems a lot are more angry that they have not made a quick buck than the fact they actually think it's a 'scam' of sorts - FOMO as the 'millenials' call it.

From what I see, I think bitcoin won't be the future of currency, It may also 'crash' in the future but blockchain technology will last and is going to play a huge role going forward, that's obvious - bitcoin will just bring the worlds attention to it.

Difference is you can delete rows from an Oracle table whereas blockchain is an immutable ledger.

Its messy but it depends on how many people are involved in mining the blockchain.

It is unsecured and unregulated, it's not an investment its a punt, if you're happy with that cool.

I am. I think the returns you get certainly on the high street aren't worth spit.

And I've lost plenty on investments of the years. Regulation and all.

It's a gamble with the odds a bit in your favour.

Like anything new it's going to have to go through its own evolution. And anything that pisses Jamie Dimon off works for me.

There is nothing that makes people take greater financial risks than the fear of other people making $$$ when they're not.

I'm cool with missing out on bitcoin. I think...! Might get some exposure to gold for the inevitable rebound though.

People keep relating and linking to Tulip Mania and Greater Fool Theory (housing market) and whilst there is always those ideas at play, it doesn't actually explain it away just to say everyone is a bit dumb and is clearly a bubble.

It's called greed. The ONLY reason people are buying is they keep seeing the price go up and think 'I can get rich on this'.

That explains it 100%.

All the techies, who believe blockchain is the new messiah, were in it years ago when it was worth less than a tulip bulb.

All the recent people who have just converted to the blockchain religion in the last year or so, don't understand what blockchain is and never will. They just think they can make a fast buck. They'd buy dog shit if it was having the same price rises.

Even if banks start using BlockChain, it won't be Bitcoin and it won't increase bitcoins value. Bitcoin can't scale (already struggling with transaction volume), so it has no long term wide scale future. The underlying technology probably has a future, but that doesn't add any intrinsic value to Bitcoin (which has an intrinsic value of nothing).

Some of us have seen these tech bubbles before...

[img] [/img]

anything above 10,000 unconfirmed transactions tends to slow things down

Currently showing 226,000 unconfirmed transactions.

Seems to have dropped from £12,500 to £11,500 this morning.

Is this the beginning of the crash? Or "Blow off phase" on Footflaps' diagram.

Even if banks start using BlockChain, it won't be Bitcoin and it won't increase bitcoins value. Bitcoin can't scale (already struggling with transaction volume), so it has no long term wide scale future. The underlying technology probably has a future, but that doesn't add any intrinsic value to Bitcoin (which has an intrinsic value of nothing).

Some of us have seen these tech bubbles before...

You are making some fairly bold assertions on this thread. What makes you think it can't scale? It is under constant development. Segwit and the Lightning network for example.

NewRetroTom - Member
anything above 10,000 unconfirmed transactions tends to slow things down
Currently showing 226,000 unconfirmed transactions.

Seems to have dropped from £12,500 to £11,500 this morning.

Is this the beginning of the crash? Or "Blow off phase" on Footflaps' diagram.

Or the take off? 8)

What makes you think it can't scale?

For it to gain widespread adoption it will need to be regulated, which will mean speculative bubbles will be prevented from happening.

If the current Bitcoin incarnation does manage to grow, it will also be regulated or outlawed as having a wildly unstable unregulated money laundering scheme is in no one's long term interests.

Either way, at some point Bitcoin is going to come crashing down and it won't go back up....

It's take off was in 2013 really when it went over $1000 dollars then returned to around $200. It only really got going again the Spring of this year; I'e been following it all through this as a mate got in big-time in 2014 and was curious to see how it would work out. He could now retire but has no plans to sell.

Is this the beginning of the crash? Or "Blow off phase" on Footflaps' diagram.

We're in the Greed / Delusion phase ie. wide spread media attention, every man and his dog want to get in on it, people claiming it's the 'future' not knowing what 'it' even is or having the faintest clue about economics / monetary policy.

The unknown is how long it will stay there and how high it will get.

There's even a IFA at my gym recommending people buy it...

it will also be regulated or outlawed

how

how

Trivial.

At some point a transaction takes place between real money, eg GBP, and speculative bubble money eg Bitcoin. Those companies use real banks which are already regulated, so you just regulate the ability to exchange real money into Bitcoin.

Could easily prevent anyone in the UK buying / selling.

It's no different to regulating gambling or share dealing, most of the regulation / tax takes place at the transaction point.

Yes a very small number of geeks might use the onion router to connect to a Chinese bitcoin exchange and buy/sell, but how do they get their money back to the UK to spend? They'd be in the same situation as drug dealers trying to launder money, only harder as it's not cash....

Just need Europe and US to start regulating and the bubble would burst overnight.

All this Robin Hood BS, "taking over from the banks", 'giving back control' is just a teenage wet dream.

But I can already buy and sell bitcoin using sites in various countries around the world in yen, gbp, usd, rubles or whatever. In fact I already do use EUR because it saves fees. The process is trivial.

I don't see how that can be regulated given that anybody around the world can pop up a new site at any time to perform the exchange of fiat for crypto.

[quote=retro83 ]But I can already buy and sell bitcoin using sites in various countries around the world in yen, gbp, usd, rubles or whatever. In fact I already do use EUR because it saves fees. The process is trivial.
I don't see how that can be regulated given that anybody around the world can pop up a new site at any time to perform the exchange of fiat for crypto.

The world has done a fairly good job of killing off file sharing. OK you can still do it but most people don't bother anymore. Surely this is no different? Country policy to block access to servers etc.

mrjmt - Member

The world has done a fairly good job of killing off file sharing. OK you can still do it but most people don't bother anymore. Surely this is no different? Country policy to block access to servers etc.

What killed file sharing was netflix and spotify, not regulation. Besides piracy is still alive and kicking in the form of live streaming.

But I can already buy and sell bitcoin using sites in various countries around the world in yen, gbp, usd, rubles or whatever. In fact I already do use EUR because it saves fees. The process is trivial.

But can you get the money back to a UK account without using a Regulated banking system.

The answer is not without extreme difficulty.

If the UK banned banks from doing transactions with bitcoin exchanges, you'd be cut off.

What killed file sharing was netflix and spotify, not regulation.

I agree.

The difference is Bitcoin doesn't offer a service or product 99.99% people want / need, it's just a method to get rich quick (for the time being). So, once the bubble bursts, 99.99% of users will walk away and never look back. If you're selling drugs / guns / slaves on the black market, then it has a real value.

[quote=retro83 ]mrjmt - Member
The world has done a fairly good job of killing off file sharing. OK you can still do it but most people don't bother anymore. Surely this is no different? Country policy to block access to servers etc.
What killed file sharing was netflix and spotify, not regulation. Besides piracy is still alive and kicking in the form of live streaming.

Aren't netflix and spotify the 'regulated' equivalents though?

[quote=footflaps ]But I can already buy and sell bitcoin using sites in various countries around the world in yen, gbp, usd, rubles or whatever. In fact I already do use EUR because it saves fees. The process is trivial.
But can you get the money back to a UK account without using a Regulated banking system.
The answer is not without extreme difficulty.
If the UK banned banks from doing transactions with bitcoin exchanges, you'd be cut off.

Again, kill the transaction point (torrent tracker servers), kill the system.

He could now retire but has no plans to sell.

It's not because they're regulated it's because they got the service to a point where it was cheap and easy enough not to bother with piracy.

That is subtlety different to what I think footflaps is saying which if I'm understanding him correctly is that it can be made difficult enough to put off 99% of people with fairly simple regulation.

I.e. one is a carrot, one a stick approach. Same fundamental idea though in that people generally will take the path of least resistance.

My point is Piracy / netflix gave people access to a tangible product they wanted.

Bitcoin isn't the same. Imagine it was a stable currency with no bubble like behaviour. Who on earth would use it? Fees are higher than paypal, I can't swipe a debit card in the coop to buy my lunch. It can't cope with 500 billion+ transactions (that's just credit cards by the way).

It's only appeal is the get rich quick / greed as a result of the bubble / not understanding what it really is.

Take away the bubble (with regulation or let it pop of its own accord) and what are you really left with? A method for selling illegal goods in the dark net and a ****fest for a small number of geeks who 'hate the man'.

Netflix / Spotify offer a tangible product of tangible worth which people pay for using real money...

Without the bubble, there's bugger all value in Bitcoin (which is not saying no one will ever use Blockchain again).

The whole situation is without precident and quite clearly has its own set of rules.

Said everyone involved in a speculative bubble, ever

Said everyone involved in a speculative bubble, ever

+1

No more boom and bust.

It's a new Paradigm.

Emperor's new clothes.

etc etc..

It's just human nature and the same things repeats endlessly. You see it all the time in industry (on a smaller scale).

He could now retire but has no plans to sell.

he should ! if not all then half his holding, remember Rothchild's answer to how did you get so rich? "I always sold too soon"

yep, going back to 99/2000 and the tech boom. My company was worth something like $4bn and we all had very generous share options.

Each day we'd all come into work and do nothing but watch NASDAQ hit yet another peak, making us all 'even richer'.

A few older staff sold up and cashed in and all bought Porsches. Us youngsters all thought this was a new paradigm and the old rules didn't apply. Plus if we sold now, we'd miss out on tomorrow's 10% rise.

Eventually it all came crashing down and my £0.5m in share options rapidly became worth about 23pence, never to recover!

I had sold a mere £20k IIRC and bought a new fence and double glazing for the house. All paid for by a 'greater fool' who'd bought my shares from me in a company which made no money and had no sales, yet was valued at $4bn as we were 'the next big thing' apparently.

Either way, at some point Bitcoin is going to come crashing down and it won't go back up....

That may not be for a while.

Is this the beginning of the crash? Or "Blow off phase" on Footflaps' diagram.

It's not either.

Every time it's corrected it's reverted back to trend.

It would have to come out of its bull trend first.

Dropping 10% after gaining 90% in a few days is nothing.

I'm having a very similar discussion with one of the young turks at work on slack who has a 'substantial investment' in BC. Been plagiarising footflaps points (hope you don't mind). Think I've got him worried.

Loads of people lost £1000s in the tech crash. Lots of investment trust things popped up showing huge growth, so every man and his dog jumped in. Mostly they invested in each other, so it was a circular loop where you actually owned bugger all real tech companies and just loads of other tech trusts. Not that owning tech companies would have helped as most of the really hot ones folded eg Enron, Worldcom etc.

A friend lost £7k when it crashed, which was the max investment in a PIP or SIP or whatever they were called back then.

Been plagiarising footflaps points (hope you don't mind).

Be my guest.

footflaps - Member
Who on earth would use it? Fees are higher than paypal, I can't swipe a debit card in the coop to buy my lunch. It can't cope with 500 billion+ transactions (that's just credit cards by the way).

This again.

I've already said, this is already on the way to being solved, short term.

Lightning network.

Long term it will of course require continual development. But could VISA deal with 500 billion + transactions when they were 5 years old?

As for being able to spend it, it would only take somebody like Coinbase to be available through Apple/Android pay.

I've already said, this is already on the way to being solved, short term.

Even if it technically could cope, it won't be able to replace the regulated financial systems as it's a chaotic mess. The only countries with inflation anything like Bitcoin are banana republics. A currency with an inflation over 10% is completely useless.

Lets say a new system comes along that solves all the problems and is widely adopted. It won't be Bitcoin and it will massively devalue Bitcoin as Bitcoin will become completely obsolete.

So, either way, Bitcoin will be devalued....

Blockchain will end up being adopted in the financial world somewhere, but it won't benefit Bitcoin in the slightest. Just as Porsche bringing out out a new 911 doesn't make a 10 year old Ford Fiesta worth any more...

As for being able to spend it, it would only take somebody like Coinbase to be available through Apple/Android pay.

Can't see Apple backing it. When it crashes through the floor and becomes worthless, they'll not want to be anywhere near it.

What are the equations the GPUs "mine" for?

What are the equations the GPUs "mine" for?

https://www.bitcoinmining.com/what-is-proof-of-work/

footflapps, bitcoin is suffering deflation, not inflation, a bitcoin is worth more tomorrow than today, so why spend. Inflation would mean its worth less so spend it now before it's worthless.

What are the equations the GPUs "mine" for?

footflapps, bitcoin is suffering deflation, not inflation, a bitcoin is worth more tomorrow than today, so why spend. Inflation would mean its worth less so spend it now before it's worthless.

Fair point!

Still completely useless as a major currency though...

Making money by doing nothing* is not a scaleable scenario.

*crunching proof of works is not real work as it adds no intrinsic value to anything.

completely agree footflaps. but it's interesting watching it happen..

[i]*crunching proof of works is not real work as it adds no intrinsic value to anything.
[/i]

it makes for an interesting method for guaranteeing unique digital assets but the cost of electricity to maintain this means a variation of bitcoin will end up getting used instead.
[img] [/img]

Should be outlawed just on environmental grounds!

So I read through it and they mine the actual BitCoins themselves. The Bitcoins are points on an elliptical curve. These points make up the actual block of the currency and are what you trade and are unique due to the Hash or whatever the word was.

Did I get it or am I lost in the wilderness?

Regarding the value of bitcoin and proof of work, the lack of practical application of the solved equations is my biggest concern. It's not like they aid in making fusion power feasible, or are laying the groundwork for interstellar travel, etc etc.

But then again, gold through the ages has had very little practical value beyond asthetics / decoration (barring recent industrial / electronic uses), and yet has kept its value almost entirely based on perception. Same applies to gemstone diamonds.

I read through it all once and have long since forgotten.

But then again, gold through the ages has had very little practical value beyond asthetics / decoration (barring recent industrial / electronic uses), and yet has kept its value almost entirely based on perception. Same applies to gemstone diamonds.

and goes through the odd bubble eg Silver in 1980 IIRC.

[url= https://www.financemagnates.com/cryptocurrency/innovation/interoperability-proven-btc-lightning-network-closer-release-ever/ ]wrt Scalability and fees, this article just published, doesn't really say much but Lighning is coming[/url]

Should be outlawed just on environmental grounds!

And want do you think the social/environment impact of fiat currencies has been, not to mention gold?

You're on a one-way negative trip and that's fine but you're using the hindsight of the tech bubble as the main thrust of your argument.

It's clear bitcoin won't be around for ever but then what is, it's hardly a prediction. If you call when I would be more impressed.

Could this be a trigger for a burst bubble?

[url= http://www.bbc.co.uk/news/technology-42275523 ]Bitcoin heist bbc[/url]