Anyone else mining crypto?

Stampie said:

In reply to infinitenexus :

I'm still with you.  I think you're doing great even if some don't understand.

Thanks, Stampie. 

I hit roughly $2,700 yesterday, so I'm in profit territory now. I haven't bought anything in a while because GPU prices have skyrocketed, and I expect them to stay insanely high until Ethereum 2.0 (eventually) rolls out.  Even Microcenter has been jacking up their prices. If and when Eth 2.0 comes out, if the prices of GPUs drop substantially, which I believe they will, I might pick up a few more modern, efficient cards and build another rig. Overall, I'm not too worried about it. I'll just let my miners do their thing and continue earning money.

I did switch one of my rigs from ethereum classic, which has gone down, to vertcoin, which has stayed much more stable lately. Also, I just like vertcoin, for whatever reason.

I should be over 3 grand by the end of next month (probably before, but I like to play it safe and use low estimates)

GameboyRMH said:

Robbie (Forum Supporter) said:

MadScientistMatt said:

PMRacing said:

So if I read above correctly, mining is getting paid to solve complex algorithms. What is the purpose of solving the algorithms and for who?

The algorithms check and validate the cryptocurrency transactions. So mining is essentially a case of the payment processing system automatically generating new tokens and using the tokens to pay the payment processing infrastructure.

Having a bunch of distributed computers all hooked to your network and running processes that the computer owners don't really understand but yet are all controlled by you under the guise of 'transaction processing' sounds like a great way to get a GIANT amount of computing power at your command for FREE. 

Sounds like a great way to launch a whole host of nasty crap. Want to overrun a server with data requests? Just have all your 'transaction processors' ask for data simultaneously. Want to brute force a math problem that normally isn't reversible so that you can crack an encryption key? Get zillions of graphics cards around the globe working different pieces of the problem at the same time. Etc, etc, etc. All you have to do is invent a 'coin' and get people to 'process the transactions for a chance at being a millionaire'.

Something like this might be possible with Ethereum but not with most other cryptocurrencies - in Bitcoin you're just trying to reverse a hash by guessing, and this is the process through which the transactions are processed/settled. Nobody can control which hash will need to be reversed.

Saw this thread come up again and thought I would update it with something I learned recently - the collective processing power of the Ethereum network to perform distributed calculations is in the same ballpark of something like an Arduino or Commodore 64...so reversing hashes on it would not be practical due to the required "gas" fees (because it costs something like $250US/sec in "gas" to run).

In short it would be like paying $250/sec to rent a C64 that uses as much electricity as one of the big cloud-hosting megacorps to reverse your hash on, while GPUs and FPGAs that could do the job far more quickly and efficiently could be bought with that money.

It's been a brutal 2 days for most, especially BTC. Ouch. 

And thus the reason why many where warning about using it as an investment.  Bitcoin currencies certainly have some sort of future, but what it is, and what "coin" will be dominant, especially as powerful companies and governments enter the field, that is much more of a guess.

In reply to aircooled :

I'm going to disagree with using a short-term loss as an indictment against how a bitcoin or any cryptos are with regards to as an investment.

10 years ago in 2012, a Bitcoin was worth $13.45, which was up 185% from 2011. Had you invested $200 in 2012 into them you'd now have over $500,000 and that's AFTER taking it on the chin over the past 90 days. Short term trends are not indicative of long-term success regardless of the commodity. Whether it be an individual stock, a market segment or a currency. 

In reply to Captdownshift (Forum Supporter) :

I agree that short term movements on stocks or commodities are not indicative of them being worthless. But currency? If you can't trust that tomorrow or a week from now your currency will remain worth approximately the same then it's not worthwhile as currency. What if you put $10k in the bank and a week later went to withdraw it and you had $6k? "Just regular short term fluctuations?" Nope it's not a usable currency then. It's a speculative gamble. Some fluctuations are fine but the wild swings in both directions just show that crypto is not money it's people playing with an asset bubble. 

Don't look at it as a currency, that's a fallacy, it's a commodity that is encouraged to be traded and bartered with. No currency has ever gone from $15 USD to $30000 USD per a unit in ten years. The only reason it is considered and called currency is because there's no tax on currency, it's the exercising of a federal loophole. Which creates an advantage over other commodities and is why some utilize it as an investment platform. 

The IRS generally treats gains on cryptocurrency the same way it treats any kind of capital gain.  It's taxable. If gains are earned in less than a year, it's taxed at the same rate as regular income. Just like other capital gains. 

Captdownshift (Forum Supporter) said:

 Short term trends are not indicative of long-term success regardless of the commodity. Whether it be an individual stock, a market segment or a currency. 

This is what I was replying to. You yourself included currency in the "short term trends are not indicative of.." list. I disagree - any currency undergoing this kind of fluctuation is worthless as currency. Whether or not you consider crypto as currency is a separate question.  I still say it's an asset bubble but that again is a separate question. 

The thing that really baffles me about crypto currency is that the under 30 crowd somehow see it as more stable/valuable than the dollar which they routinely call "fiat" while seemingly not understanding what that word means. 

I'm sure there is and has been money to be made, but like everything else, the governments will catch up and regulate it to death and there is going to be a large portion of people that are left holding the bag with a bunch of worthless "currency."

z31maniac said:

The thing that really baffles me about crypto currency is that the under 30 crowd somehow see it as more stable/valuable than the dollar which they routinely call "fiat" while seemingly not understanding what that word means. 

Sounds more like a cryptobro/libertarian thing than an under-30 thing...

Two of the biggest bitcoin mining companies in the world are battling it out in a Texas town of 5,600 people

Green Bitcoin Mining’: The Big Profits In Clean Crypto

I read through all the pages and I am still trying to figure out why haven't big companies bought out downtown cities in the rustbelt for pennies on the dollar (if not for free), especially in the lake front where they can invest in green energies.

trigun7469 said:

Two of the biggest bitcoin mining companies in the world are battling it out in a Texas town of 5,600 people

Green Bitcoin Mining’: The Big Profits In Clean Crypto

I read through all the pages and I am still trying to figure out why haven't big companies bought out downtown cities in the rustbelt for pennies on the dollar (if not for free), especially in the lake front where they can invest in green energies.

I'd guess same reasons we're not halfway to solving global warming already - existing fossil power is cheaper than building new renewable power, and sweet words about the environment aren't very profitable.

In reply to GameboyRMH :

I understand the cheaper energy, but I just wonder why some cities are not incentvizing business to open up shop. When some areas I have lived in are handing out all this gov't covid money like candy to have people start up a business. Yes energy is cheap in Texas but they still need people and some form of infustructure eventually. I just wonder if it's as stable as people think.

This documentary about crypto and NFTs has been making waves online in the past few days. Decided to watch it this morning.

As someone who has a handful of crypto holdings and used to mine I have never been less of a believer in cryptocurrency than I am now.

It's a commitment at 2 hours, but after the first ~45 minutes of finance and tech talk I was enraptured. Highly recommend making the time to watch.

https://www.youtube.com/watch?v=YQ_xWvX1n9g

In reply to pointofdeparture :

All right. That's utterly fantastic. Thank you for posting it. 
 

Yes, I invested the full 2 hours.  That was a priceless, phenomenal education. 

Obj took his payment in crypto for his partial

season contract with the La rams.   750k in usd is now worth $400k ish. He also has to pay income taxes on the $750k. 
 

big brain energy. 
 

https://hypebeast.com/2022/1/odell-beckham-jr-suffers-major-salary-loss-after-bitcoin-decline

An interesting video. It pretty much aligns with my thoughts on crypto and NFTs. Value based on hype and little else.

I am a little curious about what makes this guy the go-to authority though. Is he actually a qualified voice or is he just a guy looking for Youtube views? He's really big on buzzwords to lead the viewer to his opinion and I'm always leary of people that use buzzwords instead of straight-up logic. 

In reply to Toyman! :

I don't think anyone is suggesting or he is claiming to be the go-to authority for anything, as much as he is just someone who became interested in a subject and is using his platform to share the results of his research, like any other documentary filmmaker. And as you state, it's all his opinion at the end of the day (though it happens to be a very well-argued and evidence-supported one that I also agree with). He has a pretty successful YouTube channel in which he discusses all kinds of subjects, the crypto piece is actually pretty unusual considering the rest of his content. 

https://www.youtube.com/foldingideas

Hypothetically speaking, who would a "qualified voice" in the unregulated wild west world of cryptocurrency be anyway? The people who invented the game and profit from it succeeding? Obviously you can't trust their take. (I don't mean this as an attack, it's an honest question. I didn't find the video to be terribly buzzword-heavy, nor do I think Dan Olson's opinion is any less valid than some talking head you'd see on cable news.)

And before anyone accuses me of being salty because I lost money, I'm up over 100% on my initial crypto investments, I just initially walked away from the "crypto people" because the talk was very cultish, and now after some time away I think the whole thing is kind of a scam.

In reply to pointofdeparture :

I would say he certainly did a fair amount of research. 

Value, based on belief is kind of the way the Dollar works. So while I understand the currency aspect, I'm having a hard time with the way crypto maintains its value. You can't buy lunch with it, or a gallon of gas, and its value fluctuates so wildly I doubt you ever will. 

In reply to Toyman! :

It really feels kind of like the Beanie Baby craze of 25 years ago. Solely driven by hype and speculation. The main difference is probably that crypto is technical enough that evangelists can wave their hand and make it seem like there are tons of practical uses, but there sure are a suspicious lack of them for how long it's been around. So now we're in a situation where those with sunk cost are trying to invent uses to try and get above water...NFTs are the thing right now but they defy reason in a way that seems like we'll be talking about them like Beanie Babies in another decade.

As has been mentioned before, the blockchain is theoretically very useful in the world of accounting, but that is a very boring and unsexy application that is not going to capture the public's imagination with any success so you know they will stay as far away from it as possible until they have no other choice.

pointofdeparture said:

In reply to Toyman! :

trying to invent uses to try and get above water...  
but that is a very boring and unsexy application that is not going to capture the public's imagination...

When hookers and dealers take bitcoin, I'll wish I had been an early adopter.

In reply to AngryCorvair (Forum Supporter) :

I think a lot of higher level dealers do take bitcoin. Up your quantities so you're not buying off the street, I can hook you up with a guy.

AngryCorvair (Forum Supporter) said:

When hookers and dealers take bitcoin, I'll wish I had been an early adopter.

Hate to say you missed out by about a decade. Ever hear of the Silk Road or Black Market Reloaded? When people started buying illegal drugs, child porn, and weapons online with Bitcoin, the Feds took notice very quickly and the rest of the world followed soon after.

https://www.theverge.com/2013/4/29/4281656/silk-road-black-market-reloaded-tor-marketplaces

https://www.wired.com/2016/01/the-silk-roads-dark-web-dream-is-dead/

https://www.cnbc.com/2020/11/04/1-billion-of-bitcoin-linked-to-silk-road-is-on-the-move-elliptic.html

Ironically, the Silk Road era represented a brief moment of stability for Bitcoin where it was genuinely used as a currency.