People seem to be oblivious to the fact that a currency must be available in order to be useful. There is a reason that Gresham's Law has achieved "Law" status.
Oddly, the right thing to do for currency acceptance would be to shutdown all of the ASICs.
Once an established lending system based on bitcoins is established it will have the same problems as our current currencies. It wasn't printing money that caused the real estate bubble, it was the way to banking system has the power to expand credit and the systemic risk that expansion of credit causes.
Once there are fractional reserve bitcoin banks it will no longer be a deflationary currency.
As long as we don't have a big bitcoin credit market and we don't want to regulate the bitcoin "printing press" to adjust for market cycles, it won't even be a disadvantage. = As long as it's only a secondary currency to most users.
Gold serves as a currency yet the methods of mining have changed drastically in the last 1,000 years.
Why would anyone wants to sell the goose who lays golden eggs while gold cost more than the goose?
They'll pile up cash from "preorders", mine bitcoins and when time is right - will dump outdated devices to customers.
From BFL's perspective if they don't release first they're dead in the water. They don't know where their competitors are compared to them but they recognize it's a winner take all situation. The natural thing to do would be to take pre-orders to fund the manufacturing and start realizing profits now. Also, if your competitors are offering pre-orders you should be too.
* Buy up $10K worth of devices
* Make your money while flooding the market with fast and easy BTC
* Sell off all your hardware after the profit margins have cratered
* Wait for new hardware and rinse and repeat
Personally I will be extremely glad when the first wave hits as the hoarders will start feeling the pinch of inflation.
Only if they're "long BTC". What makes you think they are? They're just providing shovels & tools to "miners in a gold rush". Historically, such providers have always done phenominally well.
At least they get the rigs at production cost to run them---selling them for good ol' USD may just be a hedge or sideshow, only time can tell.
If anything this is an extremely interesting time in currency experimentation. Side effect of this is massive energy cost, another awesome side effect is hardware/supercomputer miniaturization and evolution. Great for really hard problems like verification (as in mining here) and maybe brain research/processing or other really hard data crunching problems.
Can you explain this in more detail? I don't understand what decentralization has to do with miners' profit.
Miner's profits have to do with the stability of the network and the demand for bitcoins. At high bitcoin prices, their return is better than when the prices are low, other things (thing, mining difficulty) being equal. It's much like gold mining: it has become much more profitable of late because the difference between extraction price ($250 to $400 per ounce in most places) and sale price (roughly $1,500 per ounce) is how much the miner takes home.
Decentralization increases this price because it makes bitcoin sound. If there's no one door to knock down, or one person to subpoena, the cyberpunk currency can robustly survive losses in its network and still have enough computing power trained on it to prevent attacks.
That said, I've half-joked that probability of receiving my miner is probably about 0.98^(USDBTC).
Also, for anyone wondering: At current difficulty and rate of exchange this will cost you <$0.10 a day to run and generate $40 of Bitcoin.
Additionally, he tried to convince people to buy BFL rather than one of the competing boards by arguing it was so much more power efficient miners using them would be forced to shut down. It's barely more power efficient than ASICs which shipped months ago, and those companies are already looking at newer models.
Oh, for what it's worth that's also less than 10x the power efficiency of the best FPGA boards...
As ASICs come online, the difficulty is going to go up, which will reduce the daily generation rate for any given miner. I've been trying to decide whether or not to order a device now based on my profitability prediction for months from now when I might actually get it. I'm guessing by the time I get one I might be able to produce at least 0.05 BTC/day. Assuming that's $6/day, the $274 device will take about six weeks to pay for itself. Not too bad, but I don't know if keeping tabs on it afterwards is worth it for $6/day. It'd only be worth it if I think BTC are going to be worth a lot more in the future... getting back to hoarding coins as an investment rather than using them as currency.
But then, may be it's better just to hoard BTC directly right now by reallocating thousands of dollars required for device? Can't decide for myself.
If you run a CPU at the same voltage, but at half the speed, it uses 1/2 the power because CMOS circuits only really use power as the transistors change state. However you're also able to run at about 1/2 the voltage without getting errors. Because V=IR, 1/2 the voltage at the same resistance is 1/2 the amperage, and since P=IV, that's 1/4 the power for normal circuits. Of course CMOS circuits already run at 1/2 the power. In the real world there's also leakage and such, but in a perfect world doubling the clockrate takes 8 times the power.
Transmeta's Crusoe was the first processor to really take advantage of this, by varying the voltage and running slower to save battery life. Before this time (2000), laptops would use a duty cycle to save power. Soon all the major chip manufacturers started copying them.
I still haven't paid and am going to now. I wonder if they will honor it or not.
I don't see where it says you won't be penalized for the time it takes for you to make a payment. With that said - I'm curious, did people pay in advance of shipping?
but yes, they have been taking pre-orders for like 9 months and people have been paying.
Holy moly: $27K.
I wonder who reaped the most out of this.
