[Closed] Bitcoin Mining - And other Cryptocurrencies

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]

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.

I don't understand this sort of take. If someone is happy to take a risk on something like this, go for it. Opportunities these days are few and far between.

As long as you know you might lose your cash. I didn't see the use of the fud.

The chap may have doubled his money now. Why spend time convincing him it was a bad idea?

Could this be a trigger for a burst bubble?

No it won't and it hasn't.

That was a couple of days ago and was a relatively small pool mining set-up.

Pay outs would've been fairly regular up until the wallet got robbed.

Our fiat system doesn't go pop when a bank is robbed does it?

So many people want this to fail. It's not even started yet and has a long way to go and evolve.

I take it you all think our current banking system is here to stay?

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.

In the absence of any other rational explanation I'm calling it a speculative bubble. It's behaving just like all previous speculative bubbles as are those caught up in the bubble.

NB The main thrust of my argument is that Bitcoin has no intrinsic value (other than if you need to launder money / trade illegally).

If someone is happy to take a risk on something like this, go for it.

If people really thought they would lose it all, they wouldn't invest in it (other than a trivial amount which wouldn't warrant the effort). A lot of people are going to be genuinely pissed off when they get burnt.

NB The main thrust of my argument is that Bitcoin has no intrinsic value

Why does that matter? it's worth what somebody is willing to pay for it, same as anything else.

Why does that matter? it's worth what somebody is willing to pay for it, same as anything else.

Because when things with no (or very low) intrinsic value start rising rapidly in price for no reason, it's called a speculative bubble. These normally don't end well. If they get big enough they can crash stock markets, cause recessions etc.

There are plenty of examples to look at to see what happens. Tech crash 2000, Tulip mania etc, Silver bubble of 1980 (smaller scale). It's not the first nor the last time you'll see this sort of bubble.

Because when things with no (or very low) intrinsic value start rising rapidly in price for no reason, it's called a speculative bubble. These normally don't end well. If they get big enough they can crash stock markets, cause recessions etc.

There are plenty of examples to look at to see what happens. Tech crash 2000, Tulip mania etc, Silver bubble of 1980 (smaller scale). It's not the first nor the last time you'll see this sort of bubble.

But then we get back to my earlier comment of gold and gemstones. Where is the intrinsic value in these? Their value is purely based on a social construct which has lasted millennia. Gold and gems are also bubbles, but ones which didn't burst. Who's to say that the perception of value won't be endowed upon a cryptocurrency in much the same way (especially set against the background of the modern worship of technology), perpetuating its value?

By owning these bitcoin thingy majigys just mean it’s nowadays unobtanium for the average saver.
Those that created it are surely just coining it in on giving a false impression that they’re worth more as the days go on.
Like a pyramid scheme.

Oh and can someone explain exactly how it has a detrimental impact on the planet.
I’m guessing you’ve guessed I’m not I.T. Smart and that I use an ipad 😆

Don’t even need a face mask or gun if you want to steal some.

It’s a bloody crime wave !

Same thing happened two hours ago 😉

@tdog - it’s detrimental to the environment because of the shear computing power being used to mine the Bitcoins, which uses electricity. Some of which does come from renewable sources, but the majority of which (I’m guessing), doesn’t.

Oh aye so it did Neal, I blame Brexit.

The chap may have doubled his money now. Why spend time convincing him it was a bad idea?

I'm not. I'm pointing out some of the issues that he may not have considered, as well as winding him up a bit as he's a cocky little sod 🙂

I take it you all think our current banking system is here to stay?

Being an armchair anarchist, I quite like the idea of a distributed financial system which bypasses the banks. Hence my question about whether warnings from bankers were genuine. Having read a bit about it though, I do think it is all a bit of an idealistic wet dream. Maybe it'll turn into something that genuinely threatens the status quo, but I doubt it. More likely it'll be absorbed by the banks and turned to their own advantage to make more money.

As long as you know you [s]might [/s]probably will lose your cash.

guy on the radio today has lost £40k because he was scammed by a website pretending to hedge bitcoin. He was so sure of the growth in bitcoin (his words), what he of course meant was "I'm so sure I'm going to make an easy buck" that he'd already found another on line dealer (again anonymous, as they all are) and "invested" more of his money.

A fool and his money...etc etc

Sure thing justinbeiber, that's what I had thought.
Sounds like it's getting outta control

The main thrust of my argument is that Bitcoin has no intrinsic value (other than if you need to launder money / trade illegally).

So what. The whole definition of "value" has challenged the greatest of minds. It doesnt matter. Value can exist without corresponding "widgets!

Also it may crash tomorrow and lots of people may lose money but if I invest £1000 and it becomes £1m then crashes to zero. I may appear to lose £1m but its not a gain until I take it. I have really lost £1000.

@tdog - it’s detrimental to the environment because of the shear computing power being used to mine the Bitcoins, which uses electricity. Some of which does come from renewable sources, but the majority of which (I’m guessing), doesn’t.

but have you actually stopped to consider the energy cost of other currency's or even the energy cost of the internet, which you are using?

A quick google shows that the internet uses [url= https://www.forbes.com/sites/christopherhelman/2016/06/28/how-much-electricity-does-it-take-to-run-the-internet/#6ad31af41fff ]70 Billion KWH[/url] a year!

[url= https://arstechnica.com/tech-policy/2017/12/bitcoins-insane-energy-consumption-explained/ ]This site[/url] claims 32TWH which i think is the same as 32 billion KWH.

So bitcoin, whilst indeed consumes a lot of energy, it is less than the internet, which has it mission critical uses, also host a lot of cat pictures and porn.

How much energy does it take to extract gold, refine it and transport it? Printing paper money is i doubt energy neutral and a lot of it gets destroyed or replaced every year.

It is easy to hear headline comments such as bitcoin uses as much energy as denmark each year, and assume that it is bad.

Interesting that it take 250kWh to process a transaction. That's about £25 at retail electricity prices - makes the banks look cheap. You could say it's not a real cost, because the person making the transaction doesn't pay it, it comes of the mines, but in that case it's a pyramid scheme. Although, 2140 is far enough away that something else will happen before the last bitcoin is mined.

Re: power usage, I read the headlines this last week and thought the numbers quoted seemed very high, but got distracted before I could try to work out the maths myself.

[url= https://www.reddit.com/r/btc/comments/7inby4/bitcoin_consumes_more_energy_than_insert_country/ ]This guy[/url] has made an attempt and reckons it's <21TWh/annum, or about a third less than the papers were saying. Still a huge number and I'm not defending it, but it's a fair bit below Ireland.

Greybeard - Member
Interesting that it take 250kWh to process a transaction. That's about £25 at retail electricity prices

Seems high but assuming they are correct this is addressed by lightning, as transactions can take place off chain