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As The Bitcoin Bubble Bursts, Digital Currencies Have A Dilution Problem
There was a time when people followed every gyration of bitcoin with pathological curiosity, peaking roughly five months ago when after having generated an epic return for 2013 as more and more momentum chasers got on board, the digital currency flirted with the $1000 (in USD terms) level on a daily basis. Then it peaked, almost to the day when this article came out, and ever since then it has been a slow, painful grind lower both for its holders and for its proponents, as can be seen on the chart below.
Needless to say, now that the bitcoin bubble popped, both the interest, and the momentum has been lost, as has the desire to "mine" bitcoin, which as we profiled previously, requires massive, expensive computer workstations. Or rather required. Because as Bloomberg reports, the Bitcoin mining bubble has also burst.
Speculators, known as miners, use powerful computers to solve complex software problems and verify transactions to unlock new bitcoins. They’re finding that the enterprise isn’t as profitable as it once was.
Drawn by the virtual currency’s jump in value last year, digital prospectors have turned the mining industry into an arms race as they buy expensive computing equipment and gobble up electricity. While that worked well as long as bitcoin’s value kept rising, smaller players are now being crowded out by bigger competition, high utility bills and declining prices.
If you mine at the moment, you have to be very lucky to get anything,” said Mehmet Vatansever, who bought $16,000 worth of mining computers in February to chase after new bitcoins. “It’s a very difficult business.”
End result: Ebay is suddenly flooded with supercomputers whose only purpose was to create more bitcoins, and whose upkeep now that the price of bitcoin has tumbled, costs more than the profit from selling mined bitcoins.
While he has been able to create new bitcoins, Vatansever soon discovered that his equipment was on track to earn less than his monthly utility bill of $480. After selling his computers on EBay Inc. in April, Vatansever estimates that he lost a total of about $6,000 on his mining adventure.
In the past week, miners made $14.9 million in revenue, compared with a weekly average of $25.2 million in December, according to Blockchain.info, an bitcoin-data aggregator. The figures represent the number of bitcoins mined plus transaction fees, multiplied by the dollar-based market price.
EBay now features more than 1,600 listings for mining computers, many of them used.
To be sure, while smaller operators have thrown in the flag, mining is still profitable for the scale operators who are crowding out minor players.
While individuals give up prospecting, at least two other larger mining companies, KnCMiner and Cloud Hashing, are still generating profits. By scaling up operations, they’ve been able to save costs on cooling and power, making their computers more efficient and cost-effective. KnCMiner also sells mining computers to other miners.
KnCMiner, based in Stockholm, operates about 7,000 machines. While the mining company’s electric bill in March came to $450,000, the computers mined 21,000 bitcoins, according to co-founder Sam Cole.
However, the biggest losers are not the miners, especially if they can take the accelerated tax depreciation write off on their supercomputers (unless these can somehow be converted into HFT trading machines), but the sellers of these same machines.
Mining-equipment suppliers are feeling the cool-down firsthand. CoinTerra Inc., a manufacturer of the powerful computers used to crunch numbers for new bitcoins, has seen new sales shrink by 30 percent in the past three weeks from the preceding period, according to CEO Ravi Iyengar.
Mining-equipment suppliers are also detecting early signs of a shift to new virtual currencies. Approximately 250 KnCMiner customers switched their orders from $10,000 computers to similarly priced alternative-currency mining machines in the past three weeks, according to Cole.
And there is of course AMD, whose Radeon video cards experienced a dramatic surge in popularity as a cheaper alternative to self contained workstations, only to feel the sudden pullback in demand now (and if it hasn't yet, it will soon).
But the biggest irony is the following:
Because they are newer, designed differently and currently mined by fewer people, currencies such as Litecoin can be more profitable, according to CoinWarz, which tracks mining activity. “The new rush right now is Litecoin,” Colin Lusk, a network engineer in Portland, Oregon, said in an interview.
While he once mined only bitcoins, Lusk now uses five of his eight machines to produce Litecoins and other virtual currencies. Created in 2011, Litecoin is similar in design to bitcoin yet requires less computing power. A $3,500 computer can produce $25 worth of Litecoins a day for $3 in electricity, while producing $20 worth of bitcoins would cost $17, Lusk said.
Spot the irony yet? As the bitcoin bubble bursts, the residual price momentum and "mining" bubbles remain only in those currencies where the "mining" of bitcoin is easier. This explains the shift from bitcoin to litecoin. In other words, where it is easier to create digital currencies out of thin air and where there is still a momentum-based surge in popularity. In yet other words - to permit a faster dilution of the existing currency pool.
But what is it that those who oppose fiar rage against? Why the eagerness and desire of central bankers to dilute said fiat at the first deflationary whim in order to protect their banking "custodians."
Who would have though that the digital currency crew would so promptly fall for the same "dangling carrot" incentives that all the fiat proponents are so tempted by on a daily basis...
Then again, monetary alchemy is nothing new - after all people were trying to convert lead into gold centuries before the US Dollar was the reserve currency. Luckily, they failed.
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perhaps I should clarify? I'm not running "mining rigs" I'm running "Trading Platforms" (not HFT)
No worries Yen Cross, I gave you +1's, assumed that is what the multiple monitors were for.
I built an AMD FX Quad Core with a Radeon R9 270, 8 GB Ram, 1TB hard drive for ~$500; AMD offers a lot of performance for the money.
I'll simply note that this was exactly my objection to it in the first place - that the number of bitcoin-like schemes is infinite, even if bitcoins themselves aren't.
I bet you still use dollars, even though the same argument (only WORSE!) applies to them.
Why do you love the central banks so much that you literally choose to transact in their paper at ever possible opportunity?
I don't have to try to store wealth in dollars, but at the moment they still have an advantage in wide acceptance so they're fine for transactional purposes. I'll take things that are of use to me, or gold, more readily than I would take dollars.
I didn't say that you store wealth in dollars, did I? I said TRANSACT. Your continued use of dollars to TRANSACT when there is an alternative is the problem here.
But hey, keep patting yourself on the back. Just don't be obvious when you clench your butthole tight to keep the gold in as you flee the country. If you had only learned thing one about BTC you could have transferred all of your wealth in an instant. But you refused, because dollars were more CONVENIENT.
Until they slam the door shut and you find you can't get out of your prison any more.
I don't plan on fleeing anywhere.
Then you don't have a plan at all.
You will lose everything if you are FORCED to flee. Or you will stay and meet whatever it is that is forcing everyone out, and it will crush you fertilize the grass with your blood.
You don't need to flee, until all your brass is empty. At which time you will be watching the game from outside of your body.
You guys literally have no idea what it is like to live in a warzone.
If you are in a situation where you think you are going to use up a bunch of brass, your house will get hit with a mortar. Or someone will hit you in the back of the head with a brick while you are trying to fix your well.
You don't want to live in a warzone. PERIOD.
I've lived in areas around New York and Washington DC where you pretty much were in a warzone, and those warzone-type-events you describe are daily occurences. Well, they'll use a carful of armed niggers instead of the mortar, but the outcome will be similar.
Try out Ukraine or Syria and see what you say then.
No running water, no buildings intact, lots of bullets all day all night and a constant threat of rape (even if you are a man) because the crazies are out (no one can waste time containing them, got a war to fight).
Most die in transit.
See ya!
tmosley I bet you still use dollars, even though the same argument (only WORSE!) applies to them.
Why do you love the central banks so much that you literally choose to transact in their paper at ever possible opportunity?
---
Why do you use the same argument that doesn't work. Tell me where in the US that people can pay all their bills in bitcoin? Answer: No Place.
Just because one is forced to use the current banking system, does not mean one loves it. Cut your crap.
given we are forced to use dollars for payment (income, bills) and given dollars are more stable than all digital currencies, it's actually the smart move.
<<the number of bitcoin-like schemes is infinite>>
Aye, but the number of investors/users is not. As a cryptocurrency noobie would you just pick the cheapest one or go with the one with the longest track record, the strongest mining backbone and the largest pool of liquidity?
I have the same quandary when I pick numbers for the lottery. Will the winning number comprise my birthday? The length of the Graf Zepelin, in meters? Satoshi's waste measurement? It's fucking hard, man.
"Satoshi's waste measurement?"
You did not mean waist, did you? :-)
That's the whole point. I would never put my money in the priciest one.
If it retains value (or appreciates) and can be used for purchases or easily exchanged, the price doesn't matter. The crux of the matter is which of the 100s of altcoins is going to appreciate in the medium to long term compared to bitcoin? I don't think any of them will.
<<I would never put my money in the priciest one.>>
Fuck gold, its the priciest one. I'm buying iron, only $121 per ton.
Silly
How large is a ton of iron and where are you gonna stack it?
You're buying paper.
Stack On
Stack your iron in Gazprom sized steel.
Digital currency.
Ayup. Pull my finger.
May Fonestar R.I.P.
I love crypto-currencies.
Watch for Q99x2 coin. That is the official coin of the Q99X2 reality.
We use it on our planet to remind us of why we are not human.
He's still here.
Satoshipower - bitKONAMon!!
Candyman candyman candyman!!
wtf is bitcoin?
It's the fastest way on the planet to lose your money, faster than pennystocks, faster than actually piling your cash into a bonfire.
Has anyone claimed ultra-litecoin yet? If so, I got dibs on super ultra-litecoin.
Bitcoin is fiat. It is a currency by decree. No different from the dollar, the euro, or any other crap fiat currency.
Hmmm, decree means "a formal and authoritative order, especially one having the force of law."
Who the fuck decreed bitcoin is currency? Money itself is a form of shared illusion. Fiat currencies wouldn't be so terrible if they were managed in a sane manner. A main feature of Bitcoin, which you may have failed to notice, is that it has a well defined supply.
News to me...
Who issued the decree?
Satoshi & the developers (opensource), then the miners. It's still a decree.
It's still of no value to me. Only atoms have intrinsic value which is why only gold, silver & other useful atoms are money.
Then I guess gold is fiat too, if that is your definition.
Nope: gold has atoms which have intrinsic value of atomic & chemical properties, mass, rarity.
"Bitcoin is fiat. It is a currency by decree. No different from the dollar, the euro, or any other crap fiat currency."
What you really should say is that Bitcoin is a credit-based currency, since a Bitcoin represents a credit recorded in the blockchain against some anonymous counterparty, similar to fiat currencies like the dollar.
You are dependent on the blockchain honoring that credit, so you are trusting some computer-nerd neckbeard instead of some government-sponsored banker. In both cases, you have to trust someone else to pay off when the time comes. Fundamentally different from holding gold, silver, or a tank of gasoline, where you actually hold the goods, although they may go up or down in value depending on the market.
I'm not claiming that real assets are perfect, since they can be lost, stolen, or taxed such as real estate taxes, but this is a different kind of risk.
Bitcoin and its children are a valuable pipeline to move lots of money around when you need to ... problem is the stability of the price, doesn't matter what the price is so long as it is stable.
You would use BC momentarily like a pipeline.
So if you wanted shift a million from here to there you don't have to worry about losing 20% during the process because the BC has lost something overnight.
Now if it became insanely popular for that purpose...BCoins would be continuously changing ownership, but would also stabalise in one state. And then it becomes usueful to hoard a little, until the hoarding causes prices rises and volatility....such is currency too.
well, no: there's a problem with pipeline stability. I need a pipeline more secure & more adaptive than Internet. Turns out my pocket is that pipeline.
Bitcoin. One topic for which I don't look to ZH for thought leadership.
"Bitcoin. One topic for which I don't look to ZH for thought leadership."
Disagree completely. The discussions here have been very useful and informative, compared to the mainstream media, where the articles are shallow and lacking analysis, or the official Bitcoin propaganda articles which are totally biased and filled with misleading statements of all sorts.
For me, a currency implies stability. Bitcoin seems to have been completely speculative. It may remain but the idea of it being anonymous has been shredded by all the NSA revelations. Christ, even transacting in cash or bullion in a parking lot is probably being captured by latest gen satellites.
When zerohedge finally comes out with an article like this, you know it's the bottom.
Are you "bottom fishing/"
I may consider buying when the price reaches $0.50/BTC.
At 50 cents Bitcoin could support $6 million of economic activity if all coins were being used. Why would you waste your time with that? That's so 2010.
But it's also very 2015 - that's just how things will be.
Hope so, filled my fucking sack sub-$400
You'll be filling a lot of sacks if you think gold is ever going anywhere near $400 again. Perhaps you're discussing platinum?
Bitcoin.
Bitcoin has bubbled every 235 days pretty much like clockwork, setting up for the next one in June/July. Each post bubble bottom has been higher than the previous bubble's top.
Disclaimer: Previous performance is not indicative of future success. I am not your financial adviser but I stayed in an Embassy Suites a couple of times.
http://flic.kr/p/kyKgtF previous performance in bitcoin, several -50% drops, are completely indicative of what's coming in the future. $6 for bitcoin is coming again and again and again.
But every article published by ZH on this subject is like this.
I know I will get down voted for this but it's the truth. If I were any of you I'd buy in at some level right now. Bitcoin is not broken. Some shaky speculative money was "shook out" with the latest IRS ruling and rumors of China banning bitcoin. Right now as we speak there is TONS of VC money pouring into this thing 100's of millions. Bitcoin ATM's are rolling out all over the planet. There are startups galore coming online in the coming months. Soon every single contract you could ever imaging will exsist on block-chain technology. If your not seeing this you are indeed missing your SECOND bitcoin buy in. Maybe you don't understand how big blockchain technology is, IDK. You have to realize the bitcoin the currency is just the first application for blockchain technology. You have no idea what is coming. I just bought another $1000. Good luck, and I seriously mean that.
there's no need to down vote you, i like that you're buying into this weakness so that I can sell some of my btc to offrisk.
it's amazing how people think the bitcoin blockchain is somehow "unique" and can't be copy-and-pasted.
I'm sure you don't own BTC non passaran. The blockchain can be "copy and pasted" as it is open source it's meant to be done as so. But any one who tries gets 51% attacked and killed right away. The BTC blockchain has strength because it has so much hashing power. I'll buy any you have to sell right now here is my address: 12TJ8oC9aBSpr2CpBiXdcuTrqC9KQdjxkq Do you even know what a BTC address is, maybe that is too technical for you.
That's not the point he was making, you blithering fool.
And you can copy/paste it all you want, but no-one is going to buy anything that isn't established, having been burned by all the pump and dumps.
In a few years, there will only be a few cryptos with significant market share, unless some differentiating factor comes out that makes them NOT just copies of BTC.
You're mostly right. however we don't know where is the bottom is, it can crash temporarily or stay months hanging around at low price but it will recover eventually.
I am going to buy in between $100 and $110.
A few weeks ago, the $120 traders on BTC-e were roughly correct, IMHO.
I'll consider when it returns again to under $6 http://flic.kr/p/kyKgtF and then I may go for it when it hits $1.50. Given the next peak for 5 years after that would be probably $3.50 I could still use it to buy pizza.
BTFBTCD ... bitchez.
Tylers, Tylers, Tylers. Didn't you read the manual?
Bitcoin is not about ASICS. If the miners were using TI calculators to find their nonces, it would not matter. Until and unless the BTC community is infiltrated by enough unemployed Keynsian economists to make a 51% majority, the supply of BTC is strictly limited by design.
I remember when we were all agape 6 months ago when the Bitcoin mining network broke 7 million GHash per second. It is clocking in at 47 million now.
what a waste of finite fossil fuels.
Most likely a smaller carbon footprint than scooting around brinks trucks, keeping all the ATMs running, building/heating/lighting bank buildings and the commutes of all their employees and customers, etc., etc.
always show your math.
However the supply of various coins (each of which has strictly limited circulation) is completely unlimited by design
Good luck with that.
You prefer to transact in a currency that is being debased in itself, I see.
Blithering fool indeed.
We care little which currency we transact in. We do care about store of value, which btc obviously does not have, when compared to any fiat world-wide.
BTC is not a store of value:
"Blithering fools indeed".
Buying bitcoin on any day and holding it for 1 year... The worst case (so far) has been a 58% gain.
+1 for the "so far".
No, the worst-case scenario has been more than 50% loss.
You're thinking of the dollar.
Let's review:
The main thing it has going for it is that you are forced, essentially (or perhaps literally) at gunpoint to use it.
Even with a 51% majority of keynesian economists, they will not be able to change the rules.
Why?
Because keynesian economists are in the business to dilute your currency, nor theirs.
They are willing to dilute the $ because albeit they use it, they are doin a 1% attack on it.
Even with a 51% majority of keynesian economists, they will not be able to change the rules.
Why?
Because keynesian economists are in the business to dilute your currency, nor theirs.
They are willing to dilute the $ because albeit they use it, they are doin a 1% attack on it.
KnCMiner, based in Stockholm, operates about 7,000 machines. While the mining company’s electric bill in March came to $450,000, the computers mined 21,000 bitcoins, according to co-founder Sam Cole.
Seriously? They spent $450k real money just on variable costs (not even amortizing the hardware or rent), found some bitcoins, and were able to convert enough to cash to pay their bills? I call BS.
21,000 bitcoins at current market value ($430) equals $903,000
But they ain't worth shit unless you can exchange them for something.
I have trouble believing that the amount of bitcoins actually exchanged for goods, services, or real currency, exceeds a few hundred bucks a month.
These mining operations may have humongous bitcoin balances (if Mt Gox or one of the others hasn't made off with them), but REAL MONEY?
December 2013, just a single payment processor, BitPay, exceeds $100,000,000 in Bitcoin Transactions Processed. But you are free to believe what you like, nobody really cares.
Edit: my calculation above is incorrect, 21,000 btc @ $430 is 9 million dollars or 20x the monthly electricity bill. Hmmm.
I still cannot believe that BitPay moved $100,000,000 to or from *cash*.
I'll bet 99.9999% of that was moving bitcoins between accounts.
I think you need a new username, grandpa.
And lurk more until you learn, you know, thing one about economics and markets.
The mining companies can sell those funny-looking hash-strings for funny-money (and then trade for real money)
or
even better,
they can sell shares of their mining company to sheeple. They can sell any amount of shares to sheeple, because they are unregulated.
(Now, i never said the GovT should start regulating them!) The sheeple will demand regulation after they lose their life savings in these mining companies.
but every time they try to dump the BTC they have no use for once produced, that drives down the price, which then means they are stuck again at a loss.
21 K BTC * $430/BTC) = 9.030.000 $
So they have 8.2 M to pay back fixed costs and get a profit.
21 K BTC * $430/BTC) = 9.030.000 $
So they have 8.2 M to pay back fixed costs and get a profit.
This is fairly typical of the larger mining operations. We are getting to the point, however, where hardware can't pay for itself, so either it's going to have to get cheaper or bitcoin is going to have to rise to make it break even. We've seen several cycles of this, and each time the miner's profit margins get smaller.
That said, when the numbers work, mining literally is printing money and there are a lot of folks from 2009-2013 that can retire (or more) on what they mined. But the days of even a well-financed solo miner doing well (or perhaps even breaking even) are gone.
"hardware can't pay for itself, so either it's going to have to get cheaper or bitcoin is going to have to rise to make it break even"
Won't happen, because crypto mining is basically an arms race, and in an arms race everyone goes bankrupt, except the arms dealers of course. Crypto mining was profitable in the early days, but gets worse and worse as time goes on. You can only make money now with a very large capital investment, which implies substantial risk. You need to have a location with cheap electricity, cooling capacity, and professional-level engineering skills in computer hardware and software, and physical design.
This is similar to the U.S. military arms race: every jet fighter costs 5x more than the last one, but the amount of oil each dollar purchases continues to go down.
Except the arms race in cryptomining has pretty much ran its limits. You cannot really go lower than 20nm right now, so unless someone comes out with a totally new design, like using qubits or something, there won't be any more massive leaps.
BTW, my mining costs are $0.24 per day, yielding $4 USD in BTC per day, it is enough to pay for itself, but I'm not investing in new hardware. Also decided not to plunge into buying a Bitcoin ATM.
optical VLSI. No electrons.
Choice:
1) Mine Bitcoins in the stale, dank air of my basement while I play Halo 4 in the dark like a socially inept vampire, or
2) Go outside, grab a pan, head for the hills and spend a day in the sun panning the sand in the stream bed, and listening to the birds while getting some exercise.
Option #2, hands down.
You win even if you leave with only sand in your shoes!
Do gamers even know what outside is?
Fucking games.
I'd rather dig holes in the ground than twerking a gaming console.
Nothing better than hard work in the fresh air.
You can keep your fat bellies and wasted time.
Stack On
And yet here you are on the internets.
.
You can do both. And if you run mining rigs in your basement, they are guaranteed to remove basement dankness; the heat from the rigs will dry up any dankness. You can also use them to heat your house in the Winter, which is unfortunately offset by the higher need to run air-conditioning in the Summer.
But of course, #2 will provide more profit in the long run.
The pyramid is exposed, i actually thought it would last longer. Sheep buy into anything, but i never thought one could sink this low - invisible 'coins' on a screen LOL, you cant make this shit up.
No mate, Bitcoin is here to stay. Who knows to what uses it will be put and what market saturation it will reach but it is not exiting stage left anytime soon.
Bitcoin 1.0 is an expirement. CryptoCurrency-Advanced-Version "might" come to stay.
Wonder what the conversion rate will be between BTC and the new-and-improved CCAV?
Bitcoin 1.0 is not user friendly. CCAV will be.
Bitcoin 1.0 is for nerds. CCAV will be sheeple compatible.
Will it come with a ubuquituous hand-held or smaller, durable, EMP-proof device that forms decentralized wireless networks resistant to jamming? Yes? No?
Physical currency has a solid, stable use: it requires no grid. Unless you can support your own durable grid that can endure war, EMP, power outages, storms, it's of little use for the coming future.
Bitcoin is vapor - it will be gone inside 10 years never to be heard from again.
Next up: BrawndoCoin! It haz electrolyt3z!
How to hook up your BrawndoCoin Miner:
step 1 : this goes into the internet (plug cable here)
step 2: this end goes in your mouth
step 3: this end generates thermoelectric power from your ass, stick it in there
oh wait, got those mixed around. Here, try this...
BTC has not lost it's utility as money.
I could give a fuck what it is worth in dollars.
WE DON'T WANT DOLLARS!
The miners give a fuck.
The miners want fiat so that they can buy electricity.
But you are correct that otherwise the price is irrelevant. Bitcoin is only accepted at a few online shops which i have never heard of and at a handful of hip restaurants which i also have never heard of. Yes indeed, the price of bitcoin is as irrelevant as what the currency is.
The lower BTC price probably benefits me, actually. I have "old" October 2013 hardware, so the lower the price in dollars for BTC, the less new hardware comes online.
The cost of electricity is nothing compared to the massive hardware cost. For example, for $10,000 you can get 3 PH/s of hardware. Today, that would earn you about $120 per day in BTC, will consuming about $5 in electricity. The big risk is that it will take several months to pay itself off, so hopefully the price drop deters more people from buying hardware.
Bitcoin never had utility as money to begin with so it can't lose a thing it didn't have.
"Create digital currencies out of thin air" - but the article is about high and higher cost to make coins - how this?
Guess what happens to the gold price when gold miners shut down their businesses because the sales don't cover their cost.
they're talking about OTHER currencies, that used a different mining algorith, if you create a currency that uses the bitcoin mining algorith the bitcoin miners can temporaly switch over and leave the difficulty sky-high.
There are special made chips for bitcoin, and the reason the last bubble started in China is that chinese chip manufacturers started buying to increase demand for their machines. Today bitcoin at less than 366$ is un-profitable, a logical miner would not sell at under-production cost. Only early adopters and speculators would.
get bitcoins info
Bitcoin, Litecoin, whateverthefucknextcoin...
010100101010010100101010101's is not real money.
Period.
Money is a concept. Whatever is used between consenting adults as money becomes money (to them). You have set ideas about what should be used as money and that's a cool story, bro.
Nope.
Needs, not consent, decides what resources must be consumed or held for later consumption. That's what determines the physical structure of money, the atoms.
Nothing else is money, everything else is an empty promise that may or may not delivery money or goods for money. Bitcon is one of those empty promises, just like dollars or roubles or sea shells or tulips.
Bitcoins are great to use to buy real money over the internet.
"Bitcoins are great to use to buy real money over the internet."
I like the irony. It took around 10 years for people to start using the web/internet seriously. Now if you took it away they would scream blue murder (even though they wouldn't know how to do it without facebook or ZH). Ten years from now digital currencies will probably be in the same position.
digital currencies are likely a part of the future (assuming we have enough energy to pump into it).
Just: the 1st one is unlikely to be the lasting one.
as we see now cost to extract does not give value by itself
what gives value is usefullness
I contend that never before has mankind diverted such a large percentage of wealth into intangible products or goods and this is the primary reason that inflation has not raised its ugly head or become a major economic issue in recent years.
Like many of those who study the economy I worry about the massive debt being accumulated by governments and the rate that central banks have expanded the money supply. If money suddenly flows into tangible goods seeking a safe haven because people lose faith in currencies inflation could soar even as debts go unpaid and promises are left unfilled. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/03/few-people-really-understand-econ...
Do you have to pay more to get your comments in all bold font?
Just another article on the web of somthing voicing off loudly about what they know nothing of. Its quite the common accurance these days.
Anyway BTC was back to $420 and the selling of the mining equipment is totally predictable based on increasing diffculty on the bitcoin network. Selling the equipment at a specific time would be part of a mining business stratergy but you can spin it as the death of bitcon and everyones selling their equipment if it gets you more views.
This is at least one of the few critical articles on bitcoin that is not completely retarded; unlike MTGOX *exchange* has failed thus bitcoin has failed.
Bitcoin is now safe!
A two-year-old security bug has been patched:
https://coinreport.net/bitcoin-core-wallet-updates-heartbleed/
if ( OpenSource == OpenSores ) {
print "beam me up, Scotty";
}
All this brings into issue "value" and the question of what something is worth. The value of "something" is not an issue to take lightly. Value is not a constant and can be derived from several factors such as supply and demand or utility value, things can spoil or become obsolete making where you invest very important. Value is not as constant as many people think or always destined to rise. More on the subject of what something is worth in the article below.
http://brucewilds.blogspot.com/2012/11/what-is-something-worth.html
Oy ve! Where's my nail gun?
Buy the dip?..
;)
People are selling Bitcoin Miners now because the next generation machines are starting to ship. These devices have a little bit of value now, but will be worthless in two months.
As an example, a 100GH/s miner sold for $12,000 in April of last year. I'm expecting delivery of a 5TH/s miner in may. It's 50 times faster. The old unit won't even pay for the electricity to run it now.
What a huge waste of resources. When I look at Bitcoin I see waste, waste, waste.
Holding Bitcoins is like saving the ashes after burning coal for heat. All the valuable energy is gone, but the ashes remind you that you once were warm. Bitcoin represents, not value, or future valuable useful commodities, but instead, energy and equipment that has been wasted and will never be recovered.
You could say that about most human endevours. Who gets to decide what is a proper use of resources, and what is a waste? Is it in the eye of the beholder?
Anything else these new units can do, like break SSL certificates?
People are losing interest in bitcoins. Which is why there are twice as many comments on this article as any other on the ZH home page.
You can chalk that up to bit-con trollers spamming this site, looking for weaklings to buy into the scam.
And welcome to the "capitulation" stage of the Bitcoin bubble.
http://en.wikipedia.org/wiki/File:Stages_of_a_bubble.png
Give it another few months and on entering the "despair" stage, it will finally be worthwhile picking up some Bitcoins, not necessarily as an investment, but as a currency hedge or for wealth transmission.
And I'll also say, to those who got caught up in the whole thing... You're as thick as two short planks. You were told. It was pointed out exactly which stage we were at in the bubble as we hit it. You absolutely refused to listen, and you deserve every loss you took. I'll look forward to taking money from you in the future.
How can you be sure this was the final bitcoin bubble? And how did you know the previous bubble or two or three wasn't the final bubble? The chart you provided shows an "institutional investor" stage. But afaik there is only one maybe two institutional bitcoin funds with maybe a few hundred million dollars invested.
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I see bagholders.
BC had it's best day's a while ago, noting but roadblocks ahead....
Actually I think this sums it up pretty well:
http://imgur.com/a/y6I8N
no, this one does: http://flic.kr/p/kyKgtF bitcoin for $6 or less, and very recently, only to be seen again and again and again.
LOL: blockhead chain.
No one needs a blockchain to have a distributed currency be 100% secure and no one needs a digital currency when off-grid is how things are going due to disruptions from war & migration and having to build your own secure network, physically, to be free from tracking, drone-strikes & arrests.
Bitcoin iz fail. All aboard the Fail Train! choo choo