Skip to comments.Into the Bitcoin Mines
Posted on 12/23/2013 4:23:45 AM PST by Errant
On the flat lava plain of Reykjanesbaer, Iceland, near the Arctic Circle, you can find the mines of Bitcoin.
To get there, you pass through a fortified gate and enter a featureless yellow building. After checking in with a guard behind bulletproof glass, you face four more security checkpoints, including a so-called man trap that allows passage only after the door behind you has shut. This brings you to the center of the operation, a fluorescent-lit room with more than 100 whirring silver computers, each in a locked cabinet and each cooled by blasts of Arctic air shot up from vents in the floor.
(Excerpt) Read more at dealbook.nytimes.com ...
D.C. businesses starting to accept Bitcoin
Anchorage Daily New:
Bitcoin: Boom or bust? Alaskans bet on the virtual currency
What if someone blows up the computers?
Yup, add me to the ping list. Thx.
I thought this was a spoof at first...
At that rate it won’t be long until it isn’t worth miming any more. The law of diminishing returns.
But how will they cope with global warming? Won't the computers stop working?
In April, 2013 there was a calculation of the estimated profit from being an ASIC bitcoin miner.
ASIC devices is Avalon, who sell a machine capable of 85 gigahashes for 101.14 BTC (approx $11,000 they dont take cash). It uses around 600 Watts of power. The $11,000 purchase could make $50,000 within 5 months (difficulty increasing at 20%/m and BTC-AUD rate at 2c/day). Over the course of its useful life (around 31 months until it difficulty gets too hard for it and it costs more for power), it will make about $117,000. Which is insane. Of course you cant resell the ASIC device once it gets to this point, but who cares it made you a heap of money. That is of course, if there isnt a flood of ASICs and difficulty doesnt skyrocket 40% or 50% per month.
This was before the drop last week where bitcoins lost 50% of their value on a policy change by the Chinese government restricting bitcoins.
Add me to the list please.
Yes, this is a thing. Several co-workers are mining them.
There are a lot of altcoins out there; the one I find very interesting (not for profit mind you) is NMC (Name Coin); a crypto currency DNS; I picked up a couple as they are dirt cheap but secure you a slot in the bitcoin chain for crypto name space resolutions and registrations.
I would like to start a new “Pyramid Coin” venture...
if any of you would like to get in on the ground floor...
The NY Times article doesn’t even briefly consider the greater economic ramifications of the concept of Bitcoin “miners”. What productive activity is actually taking place here? What value is being added to the global economy, what actual wealth is being created?
These banks of computers are essentially souped-up slot machines that pay out in digital tokens with no actual backing. The fact that this doesn’t even raise an eyebrow is troubling, because the same sort of magical thinking is behind Quantitative Easing and the rest of the Ponzi scheme that the US economy has become.
Prediction. The 0bama administration will soon issue rules about bitcoins. The rules will be designed to extract as much money as possible from people who use bitcoins.
The government doesn’t like competition.
So doge. Much coin. Very shibe.
“What productive activity is actually taking place here? What value is being added to the global economy, what actual wealth is being created?”
None. Just like printing paper money or running bank servers is necessary for the dollar but doesn’t create any actual wealth.
Bitcoin “miners” use their systems to process all the transactions and get a small cut for it. Just like banks who handle dollars.
The main difference from government is that it is completely public, opensource and nobody can change the rules.
nobody can change the rules?
someone made the rules didn’t they?
“The main difference from government is that it is completely public, opensource and nobody can change the rules.”
That remains to be seen. Last Wednesday China changed the rules about accepting Bitcoin deposits and the alleged “value” of Bitcoin fell by 50%. Just the term “mining” adds to the bullshit here. When silver is mined the result is a valuable physical material, not bits of data on networked computers.
Of course American currency stopped using silver in 1965. Much of American economic activity now is what’s called “finance”, aka shuffling money with pretend value around and not actually producing anything. The Bitcoin concept fits right in.
“Last Wednesday China changed the rules about accepting Bitcoin deposits and the alleged value of Bitcoin fell by 50%.”
The value went sky high partially because China was discussing allowing bitcoin deposits into their banks. It would essentially make China the world’s largest bitcoin exchanger and give bitcoin partial government backing. It didn’t happen so the value returned to pre-discussion levels.
Sure, rules on accepting bitcoin can be changed by government at will. They can attack bitcoin directly by prosecuting anyone that accepts it.
USA did the same with gold in 1933 and gave people paper promises that were never paid back.
The big idea behind bitcoin is that it can be entirely anonymous and distributed. No single government can take it or tax it.
“When silver is mined the result is a valuable physical material, not bits of data on networked computers.”
They are both easily verifiable, rare items that cannot be counterfeited without spending more than their value. People in the past have used seashells, rare wood, pearls, etc. That is the only physical requirement for a currency.
The other requirement is people actually accepting it for goods/services. The acceptance of bitcoin is growing exponentially. IMO, only government can stop it and they probably will attempt to when too many people begin using it to avoid taxes.
Bitcoin meets the requirements of a currency in an anonymous, distributed fashion. There are no safes, central banks, servers, bailouts, adjustements, etc. It almost has the secrecy of a purely physical currency like gold but also has the convenience of instant electronic transfers. It is something we have never seen before.
The creator started the algorithm but once in the wild it can only be changed if every active coin holder agrees to it.
There are plenty of newer systems with different rules but bitcoin is by far the most accepted for physical goods/services.
“USA did the same with gold in 1933 and gave people paper promises that were never paid back.”
There is no better indicator of the precarious status of the US dollar and all of the world’s fiat currencies than the acceptance that Bitcoin has so rapidly achieved.
I can’t argue that Bitcoin’s anonymous programmer(s) and decentralized networked computers are more trustworthy than the US government and the Federal Reserve. I consider that to be damning with faint praise.
Completely agree. Likewise, any country displaying an irrational fear of Bitcoin is signaling that its currency is on a precarious cliff. China's currency comes to mind as we're discovering in the news lately.
Information security 101 is to have offsite backup storage.
ASIC devices is Avalon,
I'm dealing right now with settling an estate. Among other things, one of the items I have to deal with is 48 Avalon ASIC chips, purchased as part of a bitcointalk.org group buy sometime this past spring.
These are chips, not mounted on a circuit board. I have no clue what to do with these.
Mankind has endeavored to use some medium of exchange throughout history. Crytocurrency is simply the latest. In "today's world", I believe it might eventually prove to be an ideal medium of exchange to use. That said, I'd have backup (i.e., PMs), incase the world of today collapses.
"The Monetary Authority of Singapore (MAS) told Singapore-based trading platform Coin Republic that it will not interfere with bitcoin adoption. The authority said: Whether or not businesses accept bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene.
According to TechInAsia, the statement isnt surprising, as the government has already made it clear that MAS should not regulate virtual currencies like bitcoin. However, the Authority has issued statements on the currency in the past, warning speculators that trading bitcoin was risky back in September.
The latest announcement is in no way an endorsement of bitcoin, but it will go a long way to reassure investors who use Singapore-based bitcoin services like Coin Republic."
1) Judging from https://en.bitcoin.it/wiki/Avalon , you need quite a bit more hardware to integrate the ASICs into a mining rig, which should be done ASAP, because the continuously rising difficulty level means that every day your rig would be able to mine slower. So option 1 is to buy the needed hardware, assemble, and start mining bitcoins. I don’t really have an estimate of how many bitcoins that rig could start mining, but you should be able to find out before you buy the hardware. There are youtube links for setting it up. A google search for “avalon asic setup” should get you started.
2) You could try to auction off the ASICs on Ebay or the like.
A quick look at Ebay suggests that the bare ASICs sell for about $10 to $20 each. So it looks like your 48 ASICs are worth less that $1000 - probably closer to $500.