Bitcoins

[Rathji]

Originally Posted by Daradon

Ok, I get that mining is the way to earn bitcoins (and in one of those articles it was compared to being metaphorical to mining gold in real life) but what are these computers actually doing? Just pushing through a bunch of power and code to make imaginary money based on some arbitrary system that gets more consuming as the bitcoin reserve gets smaller?

I guess what I'm saying is, are these computers (and people) actually doing anything useful for society in which they are uncovering the bitcoins? I don't want to say creating, because as was mentioned, there is only a limited amount. So they aren't actually creating wealth, just 'uncovering' the bitcoins that were originally created through the task of 'mining'.

To me it seems like running on a treadmill to uncover these digital nuggets based on how the original creator created the system. But without the weight loss benefits. Good for the person I guess, if they do make their fortune in the coins, but ultimately a pointless exercise for the economy and the world. Wasteful, in fact.

All good points.

You might argue that having a decentralized currency that is free of influence from governments is a good thing.

I don't know how much that I agree with that thought process, but that is one of the things which many proponents of mining say about it.

[Hack&Lube]

Originally Posted by Rathji

Those butterfly labs units have been pushed back for quite a few months.

The fact that they changed their pricing/models to match the results they were getting in their development is a good sign for me. Still about 30,000 units backordered at this point though, and best case shipping starts end of April.

I have wondered about setting up a small mining rig to run for a few months until they came online (and then sell and/or use the parts).

Any thoughts on motherboard/card/PSU?

It depends on what you define by small?

As the motherboard, CPU, and ram have effectively no impact on mining, the most important factor for keeping costs down is aggregation and therefore all you need to consider is number of PCI-E slots on the motherboard. 1x slots work for mining as well as full length slots. Then you need to get ribbon expanders to get all the cards connected to the board as you will not be able to fit them all in and you will want to space them out for proper cooling. Last is to get a high efficiency (to cut down on heat and power consumption) powersupply rated highly enough to power your rig and also a in-socket power meter to see what your draw at the wall is.

My rigs were ancient multi-slot boards with el-cheapo CPUs and junk ram and small hard drives combined with a high-end PSU and cutting edge videocards.

[Rathji]

Just a couple cards, likely 7850 or so.

I am planning on purchasing some items for some projects/personal use anyway, so this would be a purchase and use for a while, then part out and either upgrade my stuff or build the machines I need.

I read about a cheap board that had PCI-e slots so far apart that you didn't need to use extenders, but I can't find where I found it for the life of me.

[Daradon]

Originally Posted by Rathji

All good points.

You might argue that having a decentralized currency that is free of influence from governments is a good thing.

I don't know how much that I agree with that thought process, but that is one of the things which many proponents of mining say about it.

Haha, so you are saying all this computing power ISN'T doing anything useful? My question is confirmed?

I remember installing the SETI @ home screensaver years ago, I was thinking, maybe all this processing was at least doing some useful menial computing task. Or maybe it could be.

Anyway, I am very interested in the idea of the bitcoin currency. Decentralized, private, moving towards being usable anywhere. It's a great idea and could really change the world for the better.

However in this specific example it fails. Not because of all the other things the article brought up, which are true. But also because there's no change in value to the economy in 'mining' these coins. To continue with the mining example, people take minerals out of the ground and get paid for that. (Or own the minerals and can sell them, like the coins.) They go into the economy cause they are useful. Not just to those that trade them and spend them, but they constantly get used and turned into products over and over again. This is how all pay for trade occurs. Someone is turning their time, and physical or mental prowess, into something that is useful to other people.

Besides spending bitcoins, they aren't useful. No one is getting a product or service with all the work and money that is going into them. Not only that, but significant resources get put into 'mining' them. Increasingly so as we get closer to 'mining' them all.

I'm not railing against a 'devil' here, it's a very small thing in the grand scheme of things. Just thinking through the thought exercise that is the bitcoin, I almost see it as destructive, because it's not truly ADDING anything. It's just wasting time and resources.

[GGG]

The value of a bit coin is much like the value of gold (aside from its industrial applications) Its value is there because it is hard to obtain and other people place value in it.

A bar of gold is about as useful as a bitcoin.

So by regulating the rate that new bitcoins are added to the economy you have a stable currency that cant be inflated or deflated on the whim of a government. The mining process sets the exchange rate between the bit coin and real currency. As long as the cost/effort to produce a bitcoin remains high the currency remains high.

Power plus Hardware * Risk premium should be the exchange for a bit coin.

In the end spending money to mine bitcoins and spending money to mine gold accomplish the same thing.

[Rathji]

Originally Posted by GGG

The value of a bit coin is much like the value of gold (aside from its industrial applications) Its value is there because it is hard to obtain and other people place value in it.

A bar of gold is about as useful as a bitcoin.

So by regulating the rate that new bitcoins are added to the economy you have a stable currency that cant be inflated or deflated on the whim of a government. The mining process sets the exchange rate between the bit coin and real currency. As long as the cost/effort to produce a bitcoin remains high the currency remains high.

Power plus Hardware * Risk premium should be the exchange for a bit coin.

In the end spending money to mine bitcoins and spending money to mine gold accomplish the same thing.

Not exactly, gold does have SOME use other than as a currency. It is highly conductive, for example.

Doesn't change the fact that it isn't worth what people will pay for it.

[Hack&Lube]

Originally Posted by Rathji

Just a couple cards, likely 7850 or so.

I am planning on purchasing some items for some projects/personal use anyway, so this would be a purchase and use for a while, then part out and either upgrade my stuff or build the machines I need.

I read about a cheap board that had PCI-e slots so far apart that you didn't need to use extenders, but I can't find where I found it for the life of me.

Trying to find a specialized board will cost you much more than simply finding some hand-me down board from a couple generations ago and getting extenders. Even with a widely spaced board, the extra space extenders will give you will make heat dissipation much more effective and prolong the stability of a rig whose job is to run at full load 24/7. I found mine often crashing when the cards were too close.

[Rathji]

I don't have any suitable boards available, what would you suggest?

[Hack&Lube]

Originally Posted by Rathji

I don't have any suitable boards available, what would you suggest?

I'll PM you.

[Cowboy89]

Originally Posted by Rathji

All good points.

You might argue that having a decentralized currency that is free of influence from governments is a good thing.

I don't know how much that I agree with that thought process, but that is one of the things which many proponents of mining say about it.

From governments sure. That's why one of the preconditions of economic stability in developed countries is having an independent central bank in order to regulate the money supply without government political interference.

Bitcoin's premise and probably why it's popular among many is that it essentially creates an artificial gold standard. A lot of people make the mistake of thinking that moving off the gold standard was actually a bad thing. It wasn't. The reason why we have inflation around 2-3% (Like we have seen in most stable countires since the 80s) is because price stability is carefully managed by the bank of Canada and the US Federal reserve to have inflation in that range. Why not target lower inflation than 2-3%? Because the only thing orders of magnitude worse than high inflation is deflation (High inflation = US and Canada in the 1970s, deflation = great depression 1930s, and could have been 2008-2009 had central banks not printed money), and a central bank wants to keep enough cushion away from deflation so they target a managable inflation level while keeping low enough to avoid a lot of it's problems.

Now back to why we moved off the gold standard. The growth in the world's economy and the population of the world essentially was forecasted to exceed the growth in gold production to avoid deflation. Deflation is bad, because once economic participants expect their currnecy to appreciate in value they stop using it as a currency and start hording it like a commodity and thus people stop spending money and economies are broken down.

Bitcoin's very design is to encourage deflation by limiting the amount of bitcoins produced to 21 million, hence it's existing model is completely unacceptable in every way from ever being a dominant widespread means of exchange.

[PsYcNeT]

Ron...







...Paul

[Cowperson]

Originally Posted by Cowboy89

Bitcoin's very design is to encourage deflation by limiting the amount of bitcoins produced to 21 million, hence it's existing model is completely unacceptable in every way from ever being a dominant widespread means of exchange.

Bitcoin is stating to look ike a Tulip Craze right now.

Gold actually does have a genuine supply/demand aspect to it, used industrially in some uses and certainly in demand in larger amounts in India and other cultures. I'm not too sold on its qualities as a currency in times of global armageddon but . . . . . it is real. You can touch it and use it for something.

Bitcoin . . . . . . not so much.

Cowperson

[GGG]

Originally Posted by Cowperson

Bitcoin is stating to look ike a Tulip Craze right now.

Gold actually does have a genuine supply/demand aspect to it, used industrially in some uses and certainly in demand in larger amounts in India and other cultures. I'm not too sold on its qualities as a currency in times of global armageddon but . . . . . it is real. You can touch it and use it for something.

Bitcoin . . . . . . not so much.

Cowperson

Ignoring the industrial applications of it which the price does not support it is about as useful as a purple rock.

Gold itself may be real but the current value of gold is based substantially on it being a hedge against paper money. It that sense a Bit Coin is equivalent.

[Cowperson]

Originally Posted by GGG

Ignoring the industrial applications of it which the price does not support it is about as useful as a purple rock.

Gold itself may be real but the current value of gold is based substantially on it being a hedge against paper money. It that sense a Bit Coin is equivalent.

As the 2008 financial crisis continues to fade through time, gold is probably in for a long fall because, as you say, it doesn't really have a supply/demand reason for it being where it is.

"Forever" is a long time to be riding those coattails.

Cowperson

[Azure]

The amount of money Hack could have made is now up to $112,500.

Price just hit $225.

[Thor]

You sir are one cruel man.

[Azure]

I know, probably not funny. Somehow I think Hack has fired up his rig, and is probably letting her rip right now.

[Azure]

Question, is this site legitimate?

https://bitcoinnordic.com/sell/

[Azure]

I'm looking for a secure way to sell Bitcoins and transfer the money into Paypal.

There seem to be various sites out there, but rumor has it PayPal isn't kind to Bitcoin transactions.

[Thor]

lol another possible scammer selling hardware, and the site is hosted at my datacenter.

https://forums.butterflylabs.com/bit...vice-spam.html

http://www.cedartec.net/