Bitcoin?

[Captain...]

So all this processing power and high power computers being used to mine bitcoins, is just a waste of time and energy in return for money? (A bit like my job BA-DUM-TISH).

 

Surely all that power and energy could be used to actually power and or create something.

 

The distribution of bitcoins all seems very arbitrary, and will only serve in making those with the money to build the best computers (the rich) richer, which seems a bit perverse. 

[Merging Cultures]

So all this processing power and high power computers being used to mine bitcoins, is just a waste of time and energy in return for money? (A bit like my job BA-DUM-TISH).

 

Surely all that power and energy could be used to actually power and or create something.

 

The distribution of bitcoins all seems very arbitrary, and will only serve in making those with the money to build the best computers (the rich) richer, which seems a bit perverse. 

 

I agree wholeheartedly (but necessarily about your job!). It's the rich (and entrepreneurs, first movers etc) that have invested in racks of computers processing the algorithm. But as Lee said if it was easy everyone would do it and then the currency would have no value. You have to restrict supply to make it worth something. Gold is not very easy to get and which is why it is a better store of value than shells for instance.

 

As I am risk averse I will not become one of the rich overlords, but good luck to those who have taken the leap. It could still collapse and then they just have a bunch of high-end computers!

Edited 9 January 2014 by BaltimoreBlue

[cityfanlee23]

So all this processing power and high power computers being used to mine bitcoins, is just a waste of time and energy in return for money? (A bit like my job BA-DUM-TISH).

 

Surely all that power and energy could be used to actually power and or create something.

 

The distribution of bitcoins all seems very arbitrary, and will only serve in making those with the money to build the best computers (the rich) richer, which seems a bit perverse. 

 

Yes, you are correct it is a waste, However. The idea is that to keep the process prolonged and not mined quickly, the system will keep producing these "blocks" that need to be "Mined" until all 21,000,000 coins are in circulation, but every 220,000 blocks mined.. the value of the blocks drops... The last value was 50 coins per block, However after 220,000 blocks were mined at 50 coins per block, the reward dropped to 25, so they become even harder to obtain, thus pushing the price up even more.

 

 

And yes those with the most expensive computers will make the most.

However this was only the case recently..

 

When it first started, people were able to mine hundreds and thousands of coins easily due with their low performance computers, as the value was pittance, and the formulas were easy...

As more blocks are solved, they get harder, and as the value grows, more people jump on the band wagon, and more which makes them more  desirable, and more valuable, its a massive graph..

 

the more they are mined, the higher the value, the higher the value, the more people want them, the more people want them, the more they invest... The more is invested, the smaller the return... The smaller the return, the less people mining have (But want more)

 

Problem is, If you are looking to get "Mining" unfortunately you are probably 5 years too late!

 

 

the only problem is, If john lewis accepted it for example, and sold a TV for 1 bitcoin, if the price of bitcoin dropped, they could lose money...

 

So there are a million pros and cons in the idea, and it will eventually be the future currencies, However with regard to making money from the idea? 

 

Like I said, probably 5 years too late unless you have a spare room that you fancy spending £10k + on making a mining rig  capeable  of very powerful number crunching.. 

There was a report that companies are spending in some cases upto $250,000 just on the computers.... 

 

http://bitcoinexaminer.org/20-insane-bitcoin-mining-rigs/

 

Check them out, you can do some research into the rigs and work out prices....

 

 

 

What I will say, is that there are plenty of alternatives that could have the same growth.. "Litecoins" as an example

Edited 9 January 2014 by cityfanlee23

[cityfanlee23]

I agree wholeheartedly (but necessarily about your job!). It's the rich (and entrepreneurs, first movers etc) that have invested in racks of computers processing the algorithm. But as Lee said if it was easy everyone would do it and then the currency would have no value. You have to restrict supply to make it worth something. Gold is not very easy to get and which is why it is a better store of value than shells for instance.

 

As I am risk averse I will not become one of the rich overlords, but good luck to those who have taken the leap. It could still collapse and then they just have a bunch of high-end computers!

 

I spoke to a man a few months ago, that tested the theory of spending big to make big...

 

He invested £18,000 in a top mining rig, and after 12 months, had made back £7,000... so it could be a nice earner in a few years, however since he made the rig, within 12 months he could build the same rig he built for £10,000 as the technology had been so fast..

 

The electricity rates went up, and he was making profits not worth bothering with.

the bitcoin dropped in value from $750 to $500 in 3 days and all of a sudden he was losing a fortune... he couldnt afford to keep trying, although now he would of made alot of money. it used to be something anyone could do, but now as time has moved on and the art of mining has evolved, it's the big boys getting involved that are drowning the small time out....

 

 

A bit like the premier league/championship gap... 

[Captain...]

I guess in some way it mimics the 19th century gold rush, I mean nobody was producing anything, and were essentially wasting their time and energy to find gold, and as more people got involved the harder it was to find, and the more money needed to be invested in better equipment to get a return. 

 

Maybe it is a satire on modern life and currency.

[Merging Cultures]

I spoke to a man a few months ago, that tested the theory of spending big to make big...

 

He invested £18,000 in a top mining rig, and after 12 months, had made back £7,000... so it could be a nice earner in a few years, however since he made the rig, within 12 months he could build the same rig he built for £10,000 as the technology had been so fast..

 

The electricity rates went up, and he was making profits not worth bothering with.

the bitcoin dropped in value from $750 to $500 in 3 days and all of a sudden he was losing a fortune... he couldnt afford to keep trying, although now he would of made alot of money. it used to be something anyone could do, but now as time has moved on and the art of mining has evolved, it's the big boys getting involved that are drowning the small time out....

 

 

A bit like the premier league/championship gap... 

 

I heard similar: one guy invested similar sums in a rig, only for it to turn up one month late at which point it was worth less as a new processor came out and he had missed out on several thousands of dollars in mining! Ouch.

[ADK]

It's an interesting one, but is global currency a positive development for ordinary people?

[cityfanlee23]

I heard similar: one guy invested similar sums in a rig, only for it to turn up one month late at which point it was worth less as a new processor came out and he had missed out on several thousands of dollars in mining! Ouch.

I read a few months back that there is a rig that has been created that is so powerful, yet so low on energy, the waiting list is years... over 100,000 ordered before they had even finished building the rig!

 

Or might have been 10,000? cannot remember but definitely had a few 0's in it!

 

I guess in some way it mimics the 19th century gold rush, I mean nobody was producing anything, and were essentially wasting their time and energy to find gold, and as more people got involved the harder it was to find, and the more money needed to be invested in better equipment to get a return. 

 

Maybe it is a satire on modern life and currency.

 

This is exactly it CPF 

A very clever concept, that not only makes the creator a billionaire in 2 years.

 

It also has the potential to grow into the future of world currency!

 

It's big, Very big,

but too big to get involved with now alone...

 

 

Another note:

 

You spend say £10,000 building a rig, and in a year, 

You earn 8x bitcoins (Bitcoins can be spent down to 0.00000001 BTC (about 0.00001031 USD))

(You do not earn 1 whole bitcoin at a time, you earn "0.03 of a coin for example" it's based on how much your computer contributed to mining the "Block" in your pool) so you may earn 0.07 or even 0.12 from the block.. it changes accordingly.. 

 

After 1 year, you have 8x bitcoins... Brilliant! the price is say £1000 per bitcoin, so you've made £8000 and almost paid off your initial outlay.. but unfortunately you cannot pay the electricity bills with bitcoins... 

so you have had to foot the electricity bill for the last year with your intensive rig racking up the costs.. 

And until you actually sell the coins, or use them.. you are losing money all the time... if the price crashes.. goodbye investment..

 

Shall we create a Foxestalk Mining pool? haha 

Edited 9 January 2014 by cityfanlee23

[cityfanlee23]

It's an interesting one, but is global currency a positive development for ordinary people?

 

When the cypriot crash happened, they had a massive surge in bitcoin being mined from that area, people not trusting banks!

[MrSpaM]

Currency is pretty much a complete joke anyway. All bank notes are, are pre written IOU's promising to remove money from one persons 'bank account' to another persons, and when you spend the notes you are given in a shop, you are simply passing on the IOU to them, Nobody actually ever see's any real money, apart from that figure on your bank statement. Bank notes are pretty much the same as bitcoin, just you have a piece of paper rather than a digital coin to trade.

Edited 9 January 2014 by MrSpaM

[Merging Cultures]

It's an interesting one, but is global currency a positive development for ordinary people?

 

Potentially. In developing countries transaction costs are relatively high and therefore a global currency could be very helpful.

 

In Lesotho, men go to work in South Africa to work in mines (coincidentally!) and are supposed to send money home to their families. They can use western union or similar, but the small sums sent mean the transaction costs can be a high proportion of the funds being sent. Banks charge just to keep accounts open and have relatively high minimum deposit requirements. Purchasing goods outside Lesotho means having to change currency, requiring more transaction costs. 

 

Imagine currencies being free of international barriers. They should try it in Europe...

[Merging Cultures]

Currency is pretty much a complete joke anyway. All bank notes are, are pre written IOU's promising to remove money from one persons 'bank account' to another persons, and when you spend the notes you are given in a shop, you are simply passing on the IOU to them, Nobody actually ever see's any real money, apart from that figure on your bank statement. Real bank notes are pretty much the same as bitcoin, just you have a piece of paper rather than a digital coin to trade.

 

Exactly what a fiat currency is.

 

Money used to be backed by gold, now it isn't. It is just backed by the general consensus to exchange goods and services.

[ADK]

It could be a good thing then as it would restrict the power of the big financial institutions. Of course if you get over the unfairness of it making college dropouts into millionaires.

[Steven]

The Government cannot "squash" it, Lee....

 

Currencies that aren't issued by a central bank and which don't have a value that is set by Governments (or their central banks) are the future.  Currencies like bitcoin are the future.

 

However, I didn't invest in Bitcoin when I first heard about it because I believed then, as I believe now, that such currencies are (at the moment) subject to too many risks (e.g "mining", fraud, a massive drop in value etc.)

 

Essentially, Bitcoin is a bubble. It is a hugely volatile bubble. All bubbles burst. Stay away for now.

 

I still believe that, eventually, we will see an end to a World dominated by fiat currencies like Sterling and Dollar and will instead have more currencies whose value are set by the market (like bitcoin).

 

It's just a matter of when.

 

Quite. Put your money for the long run in gold.

[Haydos]

The biggest problem right now is that it has limited uses. 

 

What's the point in having millions of dollars in bitcoins if I can't spend it on 'real world' products and services?

 

Governments can squash the cash in/out points (traders) and therefore decrease the usage of the currency to transactions with a few vendors.

 

It is still very early on in it's lifespan though. In 5/10 years time who knows what it will be used for. There was a real estate agent in the (online) news a few weeks back because he was accepting bitcoin payments on his $5m property.

 

 

I was under the impression that they weren't worth mining at this point from an economical standpoint. In terms of investment it also seems like a pretty big gamble unless you play it safe. Massive rises and falls and people getting greedy. I think the biggest winners are those who got in early and were given/earned a few when they were worth next to nothing.

Edited 9 January 2014 by Haydos

[Merging Cultures]

The biggest problem right now is that it has limited uses.

What's the point in having millions of dollars in bitcoins if I can't spend it on 'real world' products and services?

Governments can squash the cash in/out points (traders) and therefore decrease the usage of the currency to transactions with a few vendors.

It is still very early on in it's lifespan though. In 5/10 years time who knows what it will be used for. There was a real estate agent in the (online) news a few weeks back because he was accepting bitcoin payments on his $5m property.

I was under the impression that they weren't worth mining at this point from an economical standpoint. In terms of investment it also seems like a pretty big gamble unless you play it safe. Massive rises and falls and people getting greedy. I think the biggest winners are those who got in early and were given/earned a few when they were worth next to nothing.

Agreed. Hence... The biggest problem RIGHT NOW.

[Guest MattP]

My mate lost his, would have been worth about £5,000 now

 

On an old hard drive he gave to someone, wonder if they know they even have it.

[cityfanlee23]

My mate lost his, would have been worth about £5,000 now

 

On an old hard drive he gave to someone, wonder if they know they even have it.

 

 http://www.bbc.co.uk/news/uk-wales-south-east-wales-25134289

[Captain...]

It is weird to think that a new age digital currency has to be physically stored on a hard drive.

[Guest MattP]

 http://www.bbc.co.uk/news/uk-wales-south-east-wales-25134289

 

lol Brilliant!

[Captain...]

Is there a regeneration rate? I understand there is a finite amount, but if people can actually lose them, then it could feasibly get to a point where there just aren't enough left to go round without suddenly creating a new batch, or devaluing the current bit coin, or would it increase in value due to scarcity? 

 

The royal mint accounts for notes being lost and destroyed and prints extra to compensate for that, I would assume this would want to do the same.

[ADK]

I'm guessing they aren't worth as much as is claimed. You would have to find a seller willing to give you money for them which I'd imagine would be quite difficult at the moment.

[Bobby Hundreds]

I've just seen Donald Trump buying a top of the range desktop computer in Curry's.

[cityfanlee23]

I've just seen Donald Trump buying a top of the range desktop computer in Curry's.

 

does that mean he is going to buy leicester?

[lavrentis]

Always used to watch Max Keiser Report on RT a while back when all he would say was invest invest invest in Bitcoin, wish I did now