My first poll for the NZ public

**SMOKEU** · 30th May 2013, 15:38

Originally Posted by bogan

The mining/exchange rate confuses me, but I've downloaded a wallet or client or some shit, which is syncing with the network or some other shit. Its the sort of ambiguous program with promises of money that would make me tell it to get fucked were it not so well known.

Your wallet is different from the miner. I suggest using GUIMiner to start off with. You need a decent AMD GPU, otherwise you're wasting your time and money as Nvidia GPUs suck balls for mining. Don't even consider using a CPU as they're a complete joke for mining. I also suggest joining a pool unless you have crazy hashing power.

You should overclock the GPU, and underclock the memory to save power. Monitor your temperatures closely, and use flags of -v -w 128 for most AMD cards in GUIMiner. Append -f 60 for desktop usage.

Buying a good ASIC would be the best way to mine if you can afford it and deal with the general availability issues surrounding those.

**mashman** · 30th May 2013, 16:08

Originally Posted by avgas

Depends on your powerbill. The american farms I have seen use about $1000/month in power. But we are talking rigs running in the 10kW range.

But I am going to give it a try with my crapbox tv viewer and see if I can get 1 pie with it.

But you can buy whole rigs to do it for you
http://www.butterflylabs.com/

Fuck that shit... get a real mining rig

**bogan** · 30th May 2013, 16:14

Yeh can't be assed with that shit, missed out on the period for a decent return rate. After doing some more reading, it seems like a very cunningly designed economy system, rewarding early adopters. Reckon the mining stage is pretty much done, my money would be on it going tits up as mining operations die down. Best option now is to sell some mining rigs to some poor schmucks and cash out in the next exchange rate high.

**avgas** · 30th May 2013, 16:22

Originally Posted by mashman

Fuck that shit... get a real mining rig

Actually PS3's will be cheap soon too

On an ironic side note - Berkeley Uni has lost something like 90% of its processing power that it had via BOINC (Seti@home etc) since Bitcoin mining was conceived.

**SMOKEU** · 30th May 2013, 16:58

Originally Posted by bogan

Yeh can't be assed with that shit, missed out on the period for a decent return rate. After doing some more reading, it seems like a very cunningly designed economy system, rewarding early adopters. Reckon the mining stage is pretty much done, my money would be on it going tits up as mining operations die down. Best option now is to sell some mining rigs to some poor schmucks and cash out in the next exchange rate high.

Or just build a totally kick ass gaming rig and use it for mining when you're not pwning teh n00bz with haxx. At least it heats the room in winter and you can somewhat (even fully) offset the cost of the cards by the returns from mining.

My video card has paid itself off enough to buy 5 7970s if I want...

**bogan** · 30th May 2013, 17:30

Originally Posted by SMOKEU

Or just build a totally kick ass gaming rig and use it for mining when you're not pwning teh n00bz with haxx. At least it heats the room in winter and you can somewhat (even fully) offset the cost of the cards by the returns from mining.

My video card has paid itself off enough to buy 5 7970s if I want...

Therein lies the problem, your card has yeilded massive rate of returns in the past, that will be unachievable in the future. But the coins you mined in the past, have only recently appreciated in value enough that you realise the rate of returns. Which is good for you, but I'm not going to run mine 24/7 when at current rate of coin return and market value, it would take years to pay off the card, and we know the coin rate of return will only drop, though the market could go either way. And due to a flawed software model that requires each user to download all bitcoin transactions, I'm picking the bitcoin economy will stop growing, and then collapse.

**SMOKEU** · 30th May 2013, 17:37

Originally Posted by bogan

Therein lies the problem, your card has yeilded massive rate of returns in the past, that will be unachievable in the future. But the coins you mined in the past, have only recently appreciated in value enough that you realise the rate of returns. Which is good for you, but I'm not going to run mine 24/7 when at current rate of coin return and market value, it would take years to pay off the card, and we know the coin rate of return will only drop, though the market could go either way. And due to a flawed software model that requires each user to download all bitcoin transactions, I'm picking the bitcoin economy will stop growing, and then collapse.

Actually, the current price is roughly proportional to the block difficulty level when I got the majority of the coins. So basically, I'm mining a lot fewer coins than before (due to the block difficulty), but those BTC are worth more.

Secondly, it's not "flawed" that all users have to process all the transactions, as that is what prevents fraud. Otherwise, it won't be long until some crafty programmer finds a way to fraudulently generate BTC, and the whole project will become a big joke, just as if every second person was printing real money at home. The only way to defeat these safeguards were if an attacker manages to have over half the total network hash rate to themself.

The first time you connect your wallet to the network, it does take a long time (hours) to sync with the block chain, but once that's done, it takes less time for each subsequent block chain synchronization.

**bogan** · 30th May 2013, 17:51

Originally Posted by SMOKEU

Actually, the current price is roughly proportional to the block difficulty level when I got the majority of the coins. So basically, I'm mining a lot fewer coins than before (due to the block difficulty), but those BTC are worth more.

Secondly, it's not "flawed" that all users have to process all the transactions, as that is what prevents fraud. Otherwise, it won't be long until some crafty programmer finds a way to fraudulently generate BTC, and the whole project will become a big joke, just as if every second person was printing real money at home. The only way to defeat these safeguards were if an attacker manages to have over half the total network hash rate to themself.

The first time you connect your wallet to the network, it does take a long time (hours) to sync with the block chain, but once that's done, it takes less time for each subsequent block chain synchronization.

Yes, but the first coins you mined are now worth more, I'm assuming is how you get to the 7 graphics cards. Or if you had sold them as soon as they were mined, would you still have got 7 cards worth?

It is flawed because it prevents growth and places massive demand on infrastructure for what is only a virtual currency. How much data will have to be sent to all bitcoin users if it were to ever approach credit card levels of transactions per second? How much power is used through mining? As the mining's rate of returns drops to below the cost of the power it uses, how will that affect the bitcoin's block chain encryption?

**SMOKEU** · 30th May 2013, 18:14

Originally Posted by bogan

Yes, but the first coins you mined are now worth more, I'm assuming is how you get to the 7 graphics cards. Or if you had sold them as soon as they were mined, would you still have got 7 cards worth?

It is flawed because it prevents growth and places massive demand on infrastructure for what is only a virtual currency. How much data will have to be sent to all bitcoin users if it were to ever approach credit card levels of transactions per second? How much power is used through mining? As the mining's rate of returns drops to below the cost of the power it uses, how will that affect the bitcoin's block chain encryption?

Yes, those early coins are worth more and early adopters were somewhat rewarded more than new miners today, but if I were to have started mining today rather than 2 years ago, I'd be just as well off either way due to the block chain vs value being largely proportional. I look at Bitcoin more as a mid term investment, rather than a fast way to make money, but there's nothing stopping people from getting weekly payouts if that's what they want to do. Personally I like to treat it like shares in a company where you don't expect a rapid return, but instead hold on for a long period of time. If I had sold all my coins as soon as I had mined them, then I would have got very little money compared to today, but by holding onto the BTC for this period of time I'm also risking losing everything if there's a huge crash.

As the bitcoin network grows, there will of course be more transactions, which leads to an increase in the amount of data that the miners need to process. However, as more transactions occur, more miners also join the network which further distributes the network load.

The cost of electricity also varies wildly with the geographical location of the miner. The USA generally has cheap power compared to us, with many people getting free electricity as part of their tenancy agreement. Conventional banks also use a phenomenal amount of energy. The encryption won't be affected by a smaller hash rate unless someone manages to have more than 50% of the total network hash rate in order to overpower the other miners.

**mashman** · 30th May 2013, 18:20

So, still only 17 no's out of 60 votes.

**bogan** · 30th May 2013, 18:45

Originally Posted by SMOKEU

Yes, those early coins are worth more and early adopters were somewhat rewarded more than new miners today, but if I were to have started mining today rather than 2 years ago, I'd be just as well off either way due to the block chain vs value being largely proportional. I look at Bitcoin more as a mid term investment, rather than a fast way to make money, but there's nothing stopping people from getting weekly payouts if that's what they want to do. Personally I like to treat it like shares in a company where you don't expect a rapid return, but instead hold on for a long period of time. If I had sold all my coins as soon as I had mined them, then I would have got very little money compared to today, but by holding onto the BTC for this period of time I'm also risking losing everything if there's a huge crash.

As the bitcoin network grows, there will of course be more transactions, which leads to an increase in the amount of data that the miners need to process. However, as more transactions occur, more miners also join the network which further distributes the network load.

The cost of electricity also varies wildly with the geographical location of the miner. The USA generally has cheap power compared to us, with many people getting free electricity as part of their tenancy agreement. Conventional banks also use a phenomenal amount of energy. The encryption won't be affected by a smaller hash rate unless someone manages to have more than 50% of the total network hash rate in order to overpower the other miners.

How does that work, you say you'd be as well of starting today, but also say its the mid term investment that got you the decent return, isn't it one or the other?

How is the network load distributed? All wallets get all the data, it's load duplication.

It still sounds like on energy useage per dollar transferred, bitcoining is far less efficient. Who does all the encryption once miner's get less return than the electricity costs though? It has to be done by somebody right?

**SMOKEU** · 30th May 2013, 19:00

Originally Posted by bogan

How does that work, you say you'd be as well of starting today, but also say its the mid term investment that got you the decent return, isn't it one or the other?

How is the network load distributed? All wallets get all the data, it's load duplication.

It still sounds like on energy useage per dollar transferred, bitcoining is far less efficient. Who does all the encryption once miner's get less return than the electricity costs though? It has to be done by somebody right?

What I meant to say was that if I sold all my coins every week 2 years ago when I started to mine compared to doing the same thing today, I wouldn't be much more well off either way. I hoarded my coins in the hope that they would increase in value, which they have. It's not much different than buying/mining BTC today with the intention of selling them in 2 years for a grossly inflated price.

All wallets have to synchronize with the block chain before that wallet can send/receive transactions. That's why you don't see payments immediately after sending them from your pool to your wallet. It's more of a "proof of work" concept than outright encryption, so basically all users have to verify the transactions of other users, so if someone does manage to "hack" the code to fraudulently create BTC, the other miners would quickly see the discrepancy in the block chain and the transaction would be considered void. The whole Bitcoin project is a lot more complicated for me to have any more than a basic grasp of the concepts involved.

You're right about the power usage, but as the mining world moves more to ASICs (and to a lesser extent, FPGAs), efficiency is increased at exponential levels. Now a basic ASIC miner with the hash rate of 8 5970s (the quintessential mining card), with the electricity consumption of a single 7870 are becoming commonplace for serious miners. It's all worth it though since we need a third party currency that doesn't suffer government intervention (even that is now fucked). It's not a perfect system and can't be expected to fully replace conventional currencies, but what price can you put on freedom?

**bogan** · 30th May 2013, 19:55

Originally Posted by SMOKEU

What I meant to say was that if I sold all my coins every week 2 years ago when I started to mine compared to doing the same thing today, I wouldn't be much more well off either way. I hoarded my coins in the hope that they would increase in value, which they have. It's not much different than buying/mining BTC today with the intention of selling them in 2 years for a grossly inflated price.

All wallets have to synchronize with the block chain before that wallet can send/receive transactions. That's why you don't see payments immediately after sending them from your pool to your wallet. It's more of a "proof of work" concept than outright encryption, so basically all users have to verify the transactions of other users, so if someone does manage to "hack" the code to fraudulently create BTC, the other miners would quickly see the discrepancy in the block chain and the transaction would be considered void. The whole Bitcoin project is a lot more complicated for me to have any more than a basic grasp of the concepts involved.

You're right about the power usage, but as the mining world moves more to ASICs (and to a lesser extent, FPGAs), efficiency is increased at exponential levels. Now a basic ASIC miner with the hash rate of 8 5970s (the quintessential mining card), with the electricity consumption of a single 7870 are becoming commonplace for serious miners. It's all worth it though since we need a third party currency that doesn't suffer government intervention (even that is now fucked). It's not a perfect system and can't be expected to fully replace conventional currencies, but what price can you put on freedom?

I'm struggling to see any benefits of this that extend to users instead of early adopters.

The currency more subject to supply/demand/investment inflation/deflation like all others, more so since it is a new thing. It's subject to high infrastructure demands, and unable to acheive the number of transactions of other popular methods. Because it will never achieve the transaction rates, it will never replace standard currency, and will thus be dependent on in it to calculate its exchange rate and value.

It'd be nice to have a super low fee and anonymous system for international transactions. But why all the bullshit with mining, increasing mining difficulty, network and power infrastructure loads, and wildly fluctuating exchange rates?