Quote from: Heathrow on March 15, 2013, 03:43:38 AM

99% of people who are getting into BTC mining are currently doing so because it's a hobby, they're bad at math, they're very, very optimistic, or they want to contribute to something good in the world.

This made me smile. It appears to describe a good few of those who have ASIC pre-orders.

There appear to me to be a number of flawed assumptions in Heathrow's argument.

Quote from: Heathrow on March 15, 2013, 06:17:53 AM

99% of folks are about to be cut out of mining BTC at current prices. There will soon be NO value in mining BTC unless (i) you run an ASIC farm, or (ii) you speculate that the value of BTC will skyrocket (like, through the fracking roof).

Anyone else slightly suspicious of the numbers of someone too keen to see everything in terms of 99% v. 1%? Wink

The first '99%' to address is '99% of folks'. Are we talking 99% of people who mine now? I am given to understand (though I don't have links to hand) that the vast majority of 'hobbyist' miners mine such small numbers as to make little difference to the mining distribution in terms of securing the Bitcoin from attack and the amount they make is probably peanuts by now also. So to whom is it a tragedy that they will have a choice to upgrade to a BFL 'jalapeno' or equivalent or stop mining?

I think we will all be in agreement assuming ASIC mining is the soon-to-be future, there will be no value in mining BTC by any other means but how one gets from that to the assumption one needs an 'ASIC farm' to make money I don't know?

Quote from: Heathrow on March 15, 2013, 06:17:53 AM

When everybody but 1% of the population (that is fiat rich) is cut out of getting any profit from building the blockchain, what's going to happen to BTC?

I'm failing to see where this 'fiat rich reaping the profit' claim is based on. Is it because some of the ASIC machines are priced in tens of thousands whilst video cards are priced in hundreds? Buying a large number of GPU cards (which incidentally in contrast to ASICS would have commanded a substantial purchase discount) also costs tens of thousands. I don't see how ASIC changes that picture in the way implied.

With prices per hashing capacity virtually the same for the hobbyist (e.g. BFL Jalapeno buyer) and 'farmer' spending tens of thousands there are virtually no economies of scale to speak of which would drive the hobbyist out. It will take the same duration for the hobbyist and the farmer receiving their kit at the same time to recover their investment (other than for some variation in running costs).

The next percentage referred to is '1% of population'. It's unclear to me whether this refers to the currently mining population, to bitcoin user population or world population. Let's hazard a guess at Bitcoin user population?

There is evidence of wider adoption of Bitcoin by some orders of magnitude from say a couple of years ago when maybe 70% of Bitcoiners were mining as against say 20% today. But 70% of 1000 is 700 whilst 20% of 10,000 is 2000. Which of the two makes for a stronger network - and that's without even considering the increase in difficulty thereby the decrease in likelihood of successful attack? All those figures are probably way off but the principle stands. Other than for securing the network why does the percentage matter if the primary purpose of Bitcoin is not to make money for miners but to serve the needs of its users?

Quote from: Heathrow on March 15, 2013, 03:43:38 AM

When ASICs come out, and they will at some point, building the blockchain and reaping the profit for having done so will be transferred almost entirely into the hands of the fiat rich.

Quote from: Eri on March 15, 2013, 05:33:39 AM

There is a roughly the same amount of BTC mined each day. as long as it has value people will mine it. if the value is sufficiently high where someone can get the equipment to mine with and make a profit then people will do so.

This ^

I would be intrigued to hear an argument as to how it is expected that ASIC (or any) mining will be anything other than marginally profitable in the long term, especially seeing as you don't need to be a geek anymore, rather just to buy something to plug into your PC and let it run.

Give me something substantive and I'm ready to listen and to change my mind accordingly - otherwise it just sounds like a rant.

As for what keeps me in Bitcoin for the Long Haul - it's simply because it is awesome. The decentralised thing, the privacy thing, the known-from-day-one inflation thing, the virtually infinate divisibility thing, the ability to transfer irrespective of distance or boundaries thing etc. etc. What's not to like?!