Quote from: worldtreasurefinders on June 15, 2013, 11:40:13 PM

Let's use an analogy to see clearly what's going on.

Imagine a large gold vein is discovered in a nearby mountainside. At first the gold is so plentiful that anyone can get in with nothing more than a pie pan and pan for gold (CPU mining for BTC), and make a profit doing so. People see these other people mining the cheap and easy gold and jump in, but the cheap and easy gold starts to go away, and mining becomes more difficult. Mining with a cheap pie pan isn't worth it anymore, so some people quit, while others buy more expensive equipment, say a sluice or dredge and get to work obtaining the more-difficult-to-mine gold (GPU mining for BTC). As more and more gold is mined, eventually even this equipment doesn't get you much, and now folks either have to buy more expensive equipment to mine the gold, or quit. Some people invest in large scale mining plants to get the difficult-to-mine gold (ASIC mining for BTC), while those with pie pans complain that it's too hostile for new miners to make any profit. They have no right to complain, the time of easy pickings is gone. Does this mean that gold will cease being a valuable currency? No, it just means you either have to invest real money into machines that can mine profitably, or don't mine at all and just buy BTC outright.

I really like your analogy, here in Central South Australia there are lots of isolated, heavily guarded, gold mines, where mining companies have invested hundreds of millions of dollars to extract Gold and Silver Copper and other minerals, I liken them to the ASIC miners for BTC., (btw, they provide lots of employent in the meantime, plus royalty cheques for the local landowners) every one benefits, including the economy.

Meantime there's old mate in Central Victoria, who makes a very nice living panning for Gold, and has done so for years, problem is, he's the only one that benefits, not even his family as he's a single bloke, I liken him to a GPU miner.

To my mind the ASIC miners are an integral part of BTC, without them BTC will founder and if you follow the block chain to its logical conclusion, eventually, (not in my lifetime) the only return the miners will get is the transaction fees.

Sure the big miners make huge profits, but in the meantime everyone benefits, no doubt several people will tell me this is not a good thing, but then I'm not an economist, but ever the optimist.

NedKLee

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