Cryptocoin Mining?

[markyh]

speculation to the peak price is very interesting. since there is a maximum of them in existence 11 million and up to 21 million. it is possible they could go up to very high prices. at 500 usd a coin. the current 11 million of them would be worth 5.5 billion usd. having 5 billion in coins that can move just about anywhere in the world has a lot of practical use to many people in countries with great restriction. I could see the item as a coin having real use for many people.

this could really jack the price. even the full amount of coins 21 million at 1000 usd each is only 21 billion usd. once again when compared to the entire world 21 billion usd is not that much money. so down the road when it has been mined. will it trade at 1000 usd a coin. maybe it will. or not.

All my life I have had a desire to find an interesting thing to place some money in. Well bit coin does qualify as very interesting.



BELOW IS ALL SPECULATION ABOUT REPORTING BITCOIN HOLDINGS KEEP IN MIND NO IRS RULINGS EXSIST AS OF APRIL 7TH 2013.


This is about reporting your holdings in a bitcoin account. Not receiving it as payment or income. Just your holding it.

Oh to all usa owners miners buyers and sellers of coins. If you keep every sale under 200 usd and every transfer under 200 usd it may have a tax advantage. If you never exceed 200usd at one time
you are not required to report foreign holdings. one exception so many 199 moves or transactions that they go over 10000 usd in a year.

you would not be subject to foriegn bank account rules and reporting. of course as of today the IRS has no real rulings on bit coin holdings and if they are foreign bank accounts. it is something to keep in mind. that transfers of 200 usd or more in a foreign bank account are subject to reporting. so keeping all sales under 200 keeps you safe if the irs decides to call bit coins in an account a foreign bank account.

remember since no one has made a ruling all of the above is just a guess . the usa may decide the coins are not the same as a foreign bank account

If major goverments make bitcoin illegal for to be used as currency expect the price to collapse back to a few dollars a coin. Iwould guess a natural price for it would be around 100% of the energy extraction costs. This would make ROI on hardware very long like it was 2009-2010. A lack of FIAT exit will seriously hold back the price. This is if all FIAT exits are blocked.

However as long as some fiat exit is available that can exchange back into USD/GBP/EUR/YEN/AUD/CAD say in Russia or South Africa then it's price will hold better but nowhere near where it is today.

My feelings now without any government interference that the natural price until complete extraction is somewhere between $1-$2 per T/hsh rate of the network.

That would have given a fair price before the Cyprus event of $28-$56 a coin in Feb, and around $60-$120 now. So on this metric we are currently overpriced due to supply/demand issues. If the network T.hsh rate triples by the summer to 180 T/hsh flooding coins to fill demand then I expect the price to stabilise to around $270-$300 a BTC.

No science backing this up just my feeling. If we are still under 100 T/hsh come July then I expect the price to easily be $500+ as supply will still massively be outstripping demand and it will feed itself. Then once demand catches up and overtakes supply expect a huge fall back until the price settles.

IMHO now is the time to get into mining on a self funding basis, retain 1 coin in 3, and cashing out of 2 coins in three to pay energy and pay off each GPU as you go. As each new GPU is paid off add another so you only have at one risk.

But look for signs of the network T/hash rate reaching 75% of the $ USD bTC price on a 1 to 1 ratio, then switch to a 3 way split, 1 coin saved, 1 coin cashed, 1 coin reinvested into more GPU /ASIC. An be prepared to bail if and when T/Hash rate reaches 90%+ of $USD price, slow mining, start offloading GPUs on ebay etc before a flood kills the 2nd hand market price.

Right now the T/Hash rate is only 32% of the $USD market price. This is what is fueling the price up.

M

 

[Chiropteran]

 

[philipma1957]

This is pretty sound reasoning, if bitcoins maintain its freedom without boundaries, it may be the go-to currency for a lot of people for many reasons and that would really massively inflate its value.

During World War II diamonds were used to get money out of a country. Small easy to hide from Authorities.

Think of the " sound of music : the good guys (von Trapp family)
fleeing from the Nazis. Two or three well hide diamonds can be helpful to people in a spot like that. Well now it is 2013 and your are forced to flee any "bad" country. A few dozen 1000 dollar bitcoins would help you setup in the new spot.
I would think having a few accounts with a stash of coins could be a way to have money to escape to . In stable countries people don't think about this a lot. I live near NYC I have a few Russian friends that fled Russia. One set did so in the early 60's the other fled in the 80's. Both were forced to leave money in Russia and got here poorer they what they were in Russia. Bitcoins would have been nice for them.

I would guess most of us know of someone with this type of story. This has to make bitcoins have a value to a lot of people that are normal non criminal types.

 

[markyh]

For those far more experience with bitcoin transaction fees I have a question.

The majority of pools listed seem to "Keep" the transaction fees. like 50 BTC. Some share them, like Slushes pool.

No pool seems to offer PPS (pay per share) and shared fees too. I assume because it's to risky a operation?

Now if you mine solo (crazy now without asic) or as part of a pool that shares transaction fees, do you get to keep collecting transaction fees for the part share/whole of each BTC you mined forever?

I.E. Solo you managed to hit block XYZ tonight buy pure luck and you get 25 BTC reward, but do you also collect every transaction fee ever created in the future for those BTC?

Same principle with a shared pool but you get your tiny slice.

I ask because if you only get a transaction fee for the action of mining (mostly kept by the pools), then what will happen in 2030 when all BTC are mined? If there are no retained transaction fees for BTC mined surely the miners will all switch off and BTC wiull collapse?

M

 

[Chiropteran]

Now if you mine solo (crazy now without asic) or as part of a pool that shares transaction fees, do you get to keep collecting transaction fees for the part share/whole of each BTC you mined forever?

I.E. Solo you managed to hit block XYZ tonight buy pure luck and you get 25 BTC reward, but do you also collect every transaction fee ever created in the future for those BTC?

Same principle with a shared pool but you get your tiny slice.

I ask because if you only get a transaction fee for the action of mining (mostly kept by the pools), then what will happen in 2030 when all BTC are mined? If there are no retained transaction fees for BTC mined surely the miners will all switch off and BTC wiull collapse?

No, I think you misunderstand what fees are for.

Here is how it works.

Every time someone creates a transaction, using the bitcoin client to send some bitcoin to another address, that transaction is sent out to all the other nodes. Most nodes relay the transaction but don't do anything else with it- these are nodes from people running bitcoin-qt, but not mining.

When mining nodes see the transaction, they add the transaction to the list of all current pending transactions. Mining nodes (pools) can set their own rules about whether or not they accept given transactions. Some pools may refuse all transactions without fees, some will filter out satoshidice transactions because they believe they are spam. In any case, each pool has it's own list of pending transactions that it will include in the next block it discovers- and it's likely that different pools will have slightly different lists of transactions.

When a block is actually found, through mining, the pool that finds it gets to propagate it's set of transactions in that block. Any transactions which include a fee have that fee immediately added to the block reward in that block. Any transactions that are left out remain as pending transactions, and maybe get included in the next block.

So you see, the fees are paid by transaction and are paid to whatever pool or miner finds the block that includes those transactions. It has nothing to do with which pool or miner mined the coins that are involved in the transaction.

 

[Silverforce11]

At this point in time, for gamers to buy a new GPU, its wasteful not to go with a radeon as within a month of mining a 7950 is going to make $150+ thus, they got a 7950 for HALF price. A 7970 makes more. Im doing caculations with 0.25 and 0.3 USD per kWh and its still rediculously profitable.

Unless one feels that 1 month from now, bitcoins will crash hard.. no reason to skip on half priced radeons in that timeframe.

 

[markyh]

At this point in time, for gamers to buy a new GPU, its wasteful not to go with a radeon as within a month of mining a 7950 is going to make $150+ thus, they got a 7950 for HALF price. A 7970 makes more. Im doing caculations with 0.25 and 0.3 USD per kWh and its still rediculously profitable.

Unless one feels that 1 month from now, bitcoins will crash hard.. no reason to skip on half priced radeons in that timeframe.

Agree completely. My 1st MSI 7950 arrives tomorrow, already have a spare HTPC rig from 2008 to put it in to try out. If after 2 weeks it all goes ok going to order another and an 850w gold psu.

The MSI 7950 costs £240 in the uk with tax ($365) but I will sell the games. Even with 12p KWH costs (18c) it will make a good daily profit.

M

 

[markyh]

No, I think you misunderstand what fees are for.

Here is how it works.

Every time someone creates a transaction, using the bitcoin client to send some bitcoin to another address, that transaction is sent out to all the other nodes. Most nodes relay the transaction but don't do anything else with it- these are nodes from people running bitcoin-qt, but not mining.

When mining nodes see the transaction, they add the transaction to the list of all current pending transactions. Mining nodes (pools) can set their own rules about whether or not they accept given transactions. Some pools may refuse all transactions without fees, some will filter out satoshidice transactions because they believe they are spam. In any case, each pool has it's own list of pending transactions that it will include in the next block it discovers- and it's likely that different pools will have slightly different lists of transactions.

When a block is actually found, through mining, the pool that finds it gets to propagate it's set of transactions in that block. Any transactions which include a fee have that fee immediately added to the block reward in that block. Any transactions that are left out remain as pending transactions, and maybe get included in the next block.

So you see, the fees are paid by transaction and are paid to whatever pool or miner finds the block that includes those transactions. It has nothing to do with which pool or miner mined the coins that are involved in the transaction.

Ok got it now, basically a pool is like a gold mining and bank clearing house operation in one!

So once all BTC are mined you could run transaction clients solo on old mining gear and take a small transaction profit?

M

 

[birthdaymonkey]

At this point in time, for gamers to buy a new GPU, its wasteful not to go with a radeon as within a month of mining a 7950 is going to make $150+ thus, they got a 7950 for HALF price. A 7970 makes more. Im doing caculations with 0.25 and 0.3 USD per kWh and its still rediculously profitable.

Unless one feels that 1 month from now, bitcoins will crash hard.. no reason to skip on half priced radeons in that timeframe.

I just caved and picked up a 7790. I wanted to play Bioshock Infinite anyway, so if BTC crashes I can always sell the card at a modest loss and keep the game.

Does anyone have experience running an AMD mining GPU as a second card in a system with nvidia as the primary graphics card? I'd rather put the 7790 in my main system because the thermal load will be less in that case, but if it's going to be a hassle with drivers, I can install it as a second card in my current mining/backup rig and maybe add another exhaust.

 

[Eureka]

This is pretty sound reasoning, if bitcoins maintain its freedom without boundaries, it may be the go-to currency for a lot of people for many reasons and that would really massively inflate its value.

Honestly, I can't see BTC going past a niche market. It's fun and low-profile but it's unregulated, unpredictable and just doesn't have any real support outside of the black market. That last stigma alone is going to keep it from going truly "big".

 

[Chiropteran]

So once all BTC are mined you could run transaction clients solo on old mining gear and take a small transaction profit?

M

Basically, yes. But all BTC won't be mined for 120 years or more, and even then mining will still be competitive because the fees will still be included in each block (every 10 minutes or so) and only one miner (or pool) can solve each block. If you had old mining gear running solo your chance of finding a block is incredibly close to zero.

It's a very gradual process, and the theory is that long before the last block reward is awarded the transaction fees will become greater than the block reward, and be the final incentive to continue mining.

 

[Qianglong]

Man..the prices are going nuts! I have three 7970s and a 5870 should I still bother with GPU mining?

 

[markyh]

Man..the prices are going nuts! I have three 7970s and a 5870 should I still bother with GPU mining?

If the difficulty is still the same as it was yesterday then why not!

M

 

[Chiropteran]

GPU mining is making a lot of money if you already own the hardware. Mining is basically a license to print money, even if you have expensive electricity. It only becomes debatable when you don't already own the hardware, because these good times might not last for long.

 

[Qianglong]

The weird thing with my miner is I am only getting a combined hash rate of 1,043.23 MH/s with the three 7970s with GUIminers and the correct flags...something is definitely not right.

I bet alot of people are regretting to have stopped mining when the prices are low But then I've also been reading here that one should switch to LTC mining because the difficulty are much lower and have a greater return for the money when using GPU miners...

 

[Piotrsama]

The weird thing with my miner is I am only getting a combined hash rate of 1,043.23 MH/s with the three 7970s with GUIminers and the correct flags...something is definitely not right.

Check GPU usage with GPU-Z... and see if the 3 of them are being used.

 

[HydroSqueegee]

The weird thing with my miner is I am only getting a combined hash rate of 1,043.23 MH/s with the three 7970s with GUIminers and the correct flags...something is definitely not right.

I bet alot of people are regretting to have stopped mining when the prices are low But then I've also been reading here that one should switch to LTC mining because the difficulty are much lower and have a greater return for the money when using GPU miners...

I think the return is about the same. with the way prices are right now, a few litecoins are worth the same as a fraction of a bitcoin mined in the same amount of time.

something is very wrong with your settings. thats waaaaay lower than you should be getting.

 

[Zargon]

225!

 

[wbynum]

LTC USD mining profitability is currently ~1.4 times BTC profitability.

 

[ultimatebob]

LTC USD mining profitability is currently ~1.4 times BTC profitability.

According to Coinotron, which is down again right now. It's hard to make any money when your mining pool isn't working

 

[ultimatebob]

That's a cool chart. Where are you getting that?

Something tells me that the chart won't look quite so cool once this bubble ends... but there is money to be made until then!

 

[PrototypeZ]

Has anybody on here done any serious FPGA mining or got their hands on an ASIC yet?

 

[Rikard]

In the three days I mined give-me-ltc has not been down, and even though it is no longer 3 times as profitable to mine LTC than BTC it is still advantageous. This could of course change any minute.

My problem with LTC is how to move the coins. BTC-e does not trade LTC/EUR and the other sites accepting EUR are either shut down or look too dodgy. Not having a USD account I suppose the best deal is to trade to BTC then BTC to EUR, but it is an additional nuisance.

Alternatively one could hoard the LTC and hopefully one day there will be a decent exchange to other currencies like EUR or CHF. Or, spend them directly in online stores, but usually that involves overseas shipping charges for physical goods. There is some trade for Steam keys, but I really have no time to play games... Or just sell on E-bay.

 

[Elfear]

The weird thing with my miner is I am only getting a combined hash rate of 1,043.23 MH/s with the three 7970s with GUIminers and the correct flags...something is definitely not right.

I bet alot of people are regretting to have stopped mining when the prices are low But then I've also been reading here that one should switch to LTC mining because the difficulty are much lower and have a greater return for the money when using GPU miners...

Definitely something wrong. I'm at ~1950MH/s with my three at 1050/340. I'm using Diablominer but that shouldn't make a big difference.

 

[Zargon]

That's a cool chart. Where are you getting that?

Something tells me that the chart won't look quite so cool once this bubble ends... but there is money to be made until then!

http://bitcoinity.org/markets

check the 6 month out

around the time of the cyrus turmoil is started to creep......around the time of the money grabbing it SOARED