902600+ entries in 0.67s
fiat500: i get your argument, im just saying my value denominated in btc is not important
to me
furuknap: No,
then you have not understood
the argument.
fiat500: the higher x is
the more profitable i am
fiat500: i mean i am not simply a holder,
there is a positive delta of coins worth $x * n being generated
furuknap: If you just want coins for
the curiosity of it, you're not looking at profitability and might as well buy
them.
furuknap: Then you're no longer a miner, but a coin holder, and
the argument doesn't apply.
fiat500: i for one plan on converting
to fiat right away
fiat500: really irrelevant, what puritan is mining nowadays simply for
the btc reward? :P
fiat500: "In short, buying mining equipment yields far more reward in Bitcoins when
the value of Bitcoins drop
than if Bitcoins rise in value."
truffles: "on’t forget
to convert
the value
to USD, regardless of whether you buy it using USD or Bitcoins"
truffles: just
throwing
that out
there..
furuknap: Quite
the opposite :-) All
the equipment shuld be sold
then.
truffles: wouldnt all equipment be bought by
then
furuknap: The counter-intuitive
thing
that miners miss is
that
they're arguing
that
they want
to pay as much as possible for
their coins and
then sell for
the same price, which doesn't make sense when you
think about it.
furuknap: Think of it even simpler: You have
two states of operation. One is gathering coins,
the other is selling coins. When you are gathering coins, you want
the price
to be as low as possible and when you're selling coins, you want
the price
to be as high as possible.
truffles: so u say, but seems like a speculators game at
the moment
furuknap: It isn't, any more
than
the dollars fate is
tied
to yen or euros or ximabwean dollars.
truffles: i dont like
that btc's fate is so
tied
to fiat
furuknap: No,
the bet ius
that
the price of BTC goes down compared
to whatever value you hold.
truffles: so
the bet is
the value of random fiat goes down ?
furuknap: That's a result of
the exchange value. If prices drop, you get more BTC for your holdings.
This will, even with realistic numbers, far outweigh any mining profit.
truffles: arent btc's constant? i dont get
the 40
to 1k
thing
ericmuys_: keep
them happy and keep
the price going up steadily. and it seems like
there's only a large dividend once or
twice a month. he's probably not doing
this, but it's funny
that he could and it just pumps his company
to extraordinary levels, but everyone remains happy if
the funds (his shares) dont dry up
ericmuys_: why can't
the dividends continue?
this
thing didn't just start rising, it's been rising for months with consistently good dividends. what are you going
to pull out and put it into? sdice?
the funny
thing about
the dividends is friedcat could cash out as
the price is rising and pay
that as a dividend and it would be insignificant. 150 BTC * $125 = $19000. once a week, cash out 20k and pay it
to
the growing herd
to
furuknap: Assbot really need
to show options in a special way.
furuknap: Heh, good ole WB has a lot of
things right.
inhies: the actual quote
though, not your version :p
inhies: furuknap: i like
that quote
furuknap: I worry because others are greedy. I
try
to be greedy when others worry.
mircea_popescu: you're
talking
to
the one guy who prevented
that back when it actually had a chance.
furuknap: Oh, I know.
The herd
thing is dangerous. I just hope it doesn't
taint BTC assets in general as bubble shares. I fear
the
train may have left for AM.
mircea_popescu: the good news is
that back in 2011
they had about 2mn btc,
then in 2012
they had about 100k
furuknap: It could very well be
that someone overheard
that a VC might enter and
thought
the
tender would be higher
than market.
mircea_popescu: there's a crowd of idiots who want
to invest in-crowd.
furuknap: Most likely,
the
thing
that has driven
the price up 0.7 in
the previous coupld of weeks is
that people see
the huge dividends, which cannot possibly continue.
pizzaman1337: ASICMINER was discussed at one of
the panels at bitcoin2013 earlier
today,
this could be a VC getting around
to dumping some money in
furuknap: The major difference is
that
there is no fundamental value of AM
to support such a high price. At 1.0,
the value is higher
than
the price. At 2.0
the price is higher
than
the value.
ericmuys_: furuknap: what's
the difference saying
that at 2.0 rather
than 1.0 other
than psychology?
furuknap: Actually, I hope
this buyer doesn't get burned more
than
they can survive.
furuknap: I hope
this buyer has a lot of spare money and really, really doesn't mind losing it.
inhies: people want out of
the bubble now
furuknap: This isn't going
to end well...
furuknap: I understand. Maybe someone else will jump on it,
then :-)
furuknap: A lot of mining operations popping up on LTC now could greatly benefit from hedging against price fluctuations. A fund
that does LTC mining combined with a sound hedging strategy could really make a killing.
furuknap: Have you considered adding futures and options on LTC
too?
furuknap: ASICs is a specialized piece of hardware
that doesn't really have any resell value after a relatively short
time. GPUs on
the other hand has resale value, can be fixed,
tuned, and easily replaced, and in some cases, it can even make sense
to have a few spares laying around because unused cards don't depreciate much and
thus isn't an asset cost.
furuknap: When I
talk
to financial people,
they
tend
to argue
that "well, buying hardware is so much of a hassle, and what if it breaks? You're left with nothing!" not realizing how a miner with some hardwre competence can fix or replace hardware as easily as
they purchase an option or future.
mircea_popescu: really slow uptake. i guess
that's what you get when something starts as a hobbist market : hobbists.
furuknap: That is, and I'm not joking,
the
topic of my next article :-) Miners have a limited understanding of finance, just as financial people have a limited understanding of mining. When I
talk
to miners,
they seem
to argue
that "just holding coins is really bad if
the price drops while a miner can always resell his hardware" and not understanding anything about hedges in finance.
mircea_popescu: it certainly wasn't well presented seeing how nobody got it at
the
time.
mircea_popescu: truth of
the matter is miners are so far away from any sort of financial understanding it's probably wasted effort
to debate which of
their dumbass notions should be contradicted etc.
furuknap: I'm not sure it is as random as
that. I wrote
the article based on a lot of questions asked on
the Reddit forums and people universally
tended
to completely ignore
the effect of price fluctuations of
their gear. One miner had just bought around 50 GPUs and hadn't realized
that when
the price of LTC dropped, he actually earned more from just having
that gear
than from mining.
mircea_popescu: nevertheless, it helps if you contradict something germane
to
the issue rather
than something random, i
think.
furuknap: I see. I'm fine with using provocative wording
to cause a reaction. People
tend
to remember (if not agree) with statements
that strongly contradict
their perception of reality.
mircea_popescu: inasmuch as
the mining rigs are fiat items pretty much.
mircea_popescu: othe rthan
that, sure, btc going up actually hurts mining investments.
mircea_popescu: it's
the wording. any one miner knows he's not betting on
THAT. so you'll get a lot of misdirected protestation
furuknap: Yup, I get what you're saying about
that :-)
mircea_popescu: well, you seemed
to interested
to know why people are
throwing a fit avbout it.
furuknap: Ah, you're arguing about
the wording.
That's fine.
The article is
trying
to show
that in
the case of a price drop, a miner gains more coins by holding gear. Difficulty isn't relevant here because mining isn't part of
the equation.
mircea_popescu: you could as well say
that buying mining gear is a bet on
the aliens showing up and wanting
to buy it for infinite money.
inhies: furuknap: i see
teh problem
mircea_popescu: presenting any definite activity in
terms of it being "A bet on X arbitrary contingency" is a peculiar and not particularly useful manner of speech.
mircea_popescu: as far as mining is concerned, difficulty is directly connected.
the btc/fiat rate is contingent.
mircea_popescu: ok. any one
thing, no matter what
thing you pick, has some directly connected bits and some contingent bits.
furuknap: inhies: Mining isn't actually part of
the scenario at all, but is elaborated in
the questions at
the end.
furuknap: I'm
trying
to understand what I did wrong, definitely.
Talking about getting married as an investment doesn't do
that.
mircea_popescu: i can't discern if your motivation is
to understand what you did wrong or
to show
the world how clever you are. which is it ?
inhies: you can prett ymuch promise
that mining rewards will go down
furuknap: Mining equipment is such a commodity. In fact,
that's why I used
the currency
trick in
the first section.
furuknap: That doesn't follow at all. Getting married is not an investment
that can be resold.
furuknap: No? Definitely not sure I'm following you, unless you're
talking about a wife being a commodity
that can be resold at a lower price point and you have
to pay
to get her.
mircea_popescu: is getting married a bet
that your wife-to-be has an unknown uncle in argentina who will leave her a billion dollar inheritance ?
furuknap: You mean by using unrealistic numbers?
The case presented is intended
to simplify
the scenario because it is easier
to see when you don't need
to argue with stuff like "well, my postage is cheap so selling yields more profit
than
that" etc.
mircea_popescu: you've come up with an edge case and are phrasing
the situation in
terms of
that edge case.
mircea_popescu: is buying a cup of coffee in
the morning a bet
that fiat will collapse by noon ?
furuknap: Well,
that's fine
too, if you swing in
that direction...
furuknap: That's not
the argument from
the article either. In fact, it's
the exact opposite, because you're bringing your own dame
to
the party :-)
mircea_popescu: nevertheless, it doesn't follow
that people going on blind dates are betting on sluts.
mircea_popescu: let's put it
this way : it's
true
that a slut is a much better catch
than a priss on any blind dating sit down
furuknap: The article shows
that a dropping price always yields a much higher profit
than mining.
mircea_popescu: it's nevertheless not exactly
true
that buying gear is a bet on price dropping.
mircea_popescu: while its
true
that for any purchase of mining hardware
there's a price point where it becomes unprofitable,
furuknap: Can't really argue against math, but damn, people keep
trying.
gribble: BTCUSD
ticker | Best bid: 121.93086, Best ask: 122.78688, Bid-ask spread: 0.85602, Last
trade: 121.89291, 24 hour volume: 24445.74160237, 24 hour low: 119.50000, 24 hour high: 124.50101, 24 hour vwap: 121.80684
inhies: not sure why i have so much more data
than you
though
inhies: if not july,
then august for sure
inhies: yea i
think
thats when mine started
too