Bitcoin sell-off

[jammy_basturd]

So am I right in thinking that I could go on holiday for two weeks, leave my laptop 'mining' for bitcoins, and then when I get back, convert all the bitcoins it had found to real money?

[collateral]

iirc there was debate a while ago as to whether the cost of electricity used to mine was more than the coins were worth, although that was before the price went crazy.

It seems like people who are into it mine using GPUs; as graphics cards are better at running many calculations in parallel compared to a CPU. I doubt a laptop would cut the mustard.

I briefly played with it a while ago but pulled the plug after my old server spent a few days at max CPU load with nothing to show for it

There have been trojans which used the resources of infected machines to mine without the user's knowledge. Interesting stuff

[DonnyMac]

speedy_thrills said:

Digga said:

Now I'm still none the wiser. Do all bitcoins get 'mined' first, before you can use them, or can you accept a bitcoin 'payment' from someone and then you go and 'mine' that?

Mined. I suppose you could sell a future by paying a margin to bridge finance it.

I'm surprised no one has started a Bitcoin Bank yet given it would avoid many constrains placed on banks currently.

My very limited understanding is that there are a finite amount of BitCoin, 21m, 9m have been 'mined' so far, the last is estimated to be found by 2140.

Once you own a BitCoin you can trade it for goods, services to those who will accept them or cash at an exchange at the prevailing exchange rate.

When 'mined' a BitCoin exists and is in general circulation like a fifty pound note, it can be passed around, it doesn't need to be mined again.

Think of it as gold, once found it exists, there's more in the ground but it hasn't been found yet.

I think what we've seen recently is a gold rush, hit a high and everyone who ether mined them or bought in at singe digit prices bailed when it went beyond $200 - some people have made an awful lot of cash this week.

There's also plenty of arbitrage opportunities in the currency exchange rates for those that are smarter than me.

[jammy_basturd]

Be interesting to see if their is something that can run on the PS3... I have one of those sat idle next to me and electricity is included in my rent. I wouldn't mind having it on for a week or two as a speculative effort should the bitcoin raise in value in the future.

I guess the value of the bitcoin isn't yet sufficient to warrant renting a huge AWS network to try and mine them quicker?!

[Digga]

jammy_basturd said:

So am I right in thinking that I could go on holiday for two weeks, leave my laptop 'mining' for bitcoins, and then when I get back, convert all the bitcoins it had found to real money?

^This, is really fking with my head.

How are they actually worth anything if all you have to do is, effectively, 'download' them? Do you pay for the mining & wallet software?

[DonnyMac]

jammy_basturd said:

Be interesting to see if their is something that can run on the PS3... I have one of those sat idle next to me and electricity is included in my rent. I wouldn't mind having it on for a week or two as a speculative effort should the bitcoin raise in value in the future.

I guess the value of the bitcoin isn't yet sufficient to warrant renting a huge AWS network to try and mine them quicker?!

People are buying rigs for $30-70,000 to mine them, the more that get found the harder it is to find the next, your PS3 may pop

[Digga]

DonnyMac said:

jammy_basturd said:

Be interesting to see if their is something that can run on the PS3... I have one of those sat idle next to me and electricity is included in my rent. I wouldn't mind having it on for a week or two as a speculative effort should the bitcoin raise in value in the future.

I guess the value of the bitcoin isn't yet sufficient to warrant renting a huge AWS network to try and mine them quicker?!

People are buying rigs for $30-70,000 to mine them, the more that get found the harder it is to find the next, your PS3 may pop

I think I'll stick with tulip bulbs - it's nice to have 'investments' you can dig up and check on. I suppose you could add gold to that too category too.

[DonnyMac]

Digga said:

jammy_basturd said:

So am I right in thinking that I could go on holiday for two weeks, leave my laptop 'mining' for bitcoins, and then when I get back, convert all the bitcoins it had found to real money?

^This, is really fking with my head.

How are they actually worth anything if all you have to do is, effectively, 'download' them? Do you pay for the mining & wallet software?

You'll never find one with a standard PC, that time has passed as the computing power required increases the more that are in circulation.

I believe the way the algorithm works is that for the currency to work the platform needs computing power (as every transaction ever made is shared on every computer on the network (this also means that you cannot fake a BitCoin)) so there is, or was, a benefit to allow your graphics card to compute in the background for the benefit of the network - the up side being that every once in a while your graphics card would find a BitCoin to add to your wallet, a thank you for allowing your hardware to be part of the network.

This sort of went out the window when geeks started building rigs from floor to ceiling with dedicated aircon units to mine bit coins from the network - the network benefited tremendously (speed of transaction) but the casual BitCoin owner then had only a minuscule percentage of the network and this a minuscule chance of 'finding' a BitCoin.

Early adopters will have several thousand of them.

Those who are late to the party, and I still think that people have only just started dancing, will need to engage on the basis of it being an established currency and trade accordingly.

Unless you're a serious geek and have several thousand pounds to spend, leave mining to others whom have already nailed it.

There's money to be made - today's low £42, today's high £110 - grrr... What price to buy in at?

[collateral]

The cell is supposedly good at parallel, but Sony prevented PS3 linux from accessing the juiciest bits of the hardware with a hypervisor. And now they've killed it off completely

[Digga]

DonnyMac said:

You'll never find one with a standard PC, that time has passed as the computing power required increases the more that are in circulation.

I believe the way the algorithm works is that for the currency to work the platform needs computing power (as every transaction ever made is shared on every computer on the network (this also means that you cannot fake a BitCoin)) so there is, or was, a benefit to allow your graphics card to compute in the background for the benefit of the network - the up side being that every once in a while your graphics card would find a BitCoin to add to your wallet, a thank you for allowing your hardware to be part of the network.

Aha! Someone - you - has actually brought the idea to life for me. Somewhere in the dark recesses of what constitutes my brain, a very dim (environmentally friendly) light bulb has been illuminated. Thank you.

DonnyMac said:

This sort of went out the window when geeks started building rigs from floor to ceiling with dedicated aircon units to mine bit coins from the network - the network benefited tremendously (speed of transaction) but the casual BitCoin owner then had only a minuscule percentage of the network and this a minuscule chance of 'finding' a BitCoin.

And you also explain why I no longer need to concern myself with mining. Double thanks.

[jshell]

Digga said:

I guess it is possible that some government or central bank somewhere might take exception to the bicoin and attempt sabotage. The same claims have been made about gold too - namely via derrivative trades, did the establishment allow a devaluation mechanism?

Certainly Greece being forced to sell gold is a current issue. Given the surety of value, I wonder why the troika insisted on this, rather than simply using it as collateral?

Gold physically exists and so always has some intrisic value. Without gold, a country's finances should be easier for external manipulation, I would think. The troika ain't daft, they want total control over EU members finances. Surely physical gold is anathema to that.

[jshell]

hornet said:

... could be viewed as a reasonably safe store of wealth.

Buy virtual gold that someone else stores for me? fk that

[jammy_basturd]

jshell said:

hornet said:

... could be viewed as a reasonably safe store of wealth.

Buy virtual gold that someone else stores for me? fk that

The sentiment still works if you remove the word 'virtual'.

[Digga]

jshell said:

Digga said:

I guess it is possible that some government or central bank somewhere might take exception to the bicoin and attempt sabotage. The same claims have been made about gold too - namely via derrivative trades, did the establishment allow a devaluation mechanism?

Certainly Greece being forced to sell gold is a current issue. Given the surety of value, I wonder why the troika insisted on this, rather than simply using it as collateral?

Gold physically exists and so always has some intrisic value. Without gold, a country's finances should be easier for external manipulation, I would think. The troika ain't daft, they want total control over EU members finances. Surely physical gold is anathema to that.

Kind of my thoughts - they're kicking Cyprus whilst they're down to ensure they can't get back onto their own feet again.

[jshell]

hornet said:

jshell said:

Buy virtual gold that someone else stores for me? fk that

Whereas digits on a screen sat in a bank that may in fact be insolvent is somehow acceptable. Funny old world. Assuming the warehouse is properly controlled and audited, you at least know your "money" actually exists somewhere. Not proposing we all switch to that model by the way, just pointing out said model exists for consideration.

The traditional 'banking industry' has a track record, 'some' security and is mostly publically owned, therefore I still have a little faith in it. Govts can't afford for the whole sector to fail, tbh.

On the other hand, someone says to me: 'give me your hard-earned and I'll buy gold and store it for you', then forgive me for some slight skepticism. There are many, many scams of this ilk that have succeeded...

[jshell]

jammy_basturd said:

jshell said:

hornet said:

... could be viewed as a reasonably safe store of wealth.

Buy virtual gold that someone else stores for me? fk that

The sentiment still works if you remove the word 'virtual'.

Aye, precisely. Easily transportable commodities are, erm, easily transported....

[Esseesse]

DonnyMac said:

There's money to be made - today's low £42, today's high £110 - grrr... What price to buy in at?

Just buy some anywhere in that range, it's significantly less than yesterday.

And then see where you are in a year or 2. It's no more expensive than going out for dinner with OH, and much more interesting, for much longer.

[Esseesse]

DonnyMac said:

Think of it as gold, once found it exists, there's more in the ground but it hasn't been found yet.

Think of it as a prime number, or the next decimal place of Pi.

[to3m]

Digga said:

jammy_basturd said:

So am I right in thinking that I could go on holiday for two weeks, leave my laptop 'mining' for bitcoins, and then when I get back, convert all the bitcoins it had found to real money?

^This, is really fking with my head.

How are they actually worth anything if all you have to do is, effectively, 'download' them? Do you pay for the mining & wallet software?

It works sort of like a lottery, but there's no central authority (this is why it's only sort-of like a lottery - it's a bit of a long story how it's possible for it to work like this). Your computer effectively enters millions of times per second, by performing calculations, and if it happens to win, you get N bit coins. But the chance of winning is so vanishingly small that you'll have to play for a long time to win even a fraction of a prize. So entry to the lottery costs, in the form of the electricity and hardware required to run these calculations. If the prizes have any value it comes from the investment of electricity and time that was required to gain entry.

As to why 1 bitcoin is worth anything - well, no reason at all, same as any type of fiat money, other than that people agree amongst themselves that it's worth something. For the longest time, they were worth basically nothing, and you'd have had to spend thousands of them just to buy anything at all... assuming you could find somebody else crazy enough to believe that they had value.

Of course, that might sound ridiculous now, but... give it a month...

[Oakey]

Whilst the price of Bitcoins continues to vary wildly on a daily basis, how is anyone actually meant to use them for anything? A retailer would have to continually change their product prices to reflect the current value of the BTC.