As I mentioned earlier, the real good money can be made by starting a competing currency. Because of the difficulty of mining and the process of slowing down, unless you have a hardware what you also use for something else, buying a rig just for BTC mining is not cost effective. Anyway, here is another online currency:
"What is Litecoin?
Litecoin is a peer-to-peer Internet currency that enables instant payments to anyone in the world. It differs from its parent Bitcoin in that can be efficiently mined with consumer-grade hardware. Litecoin provides faster confirmations (targeted at every 2.5 minutes on average) and uses memory-hard, scrypt-based mining to target the CPUs and GPUs most people already have. The Litecoin network is scheduled to produce four times as many currency units as Bitcoin.
One of the aims of Litecoin was to provide a mining algorithm that could run at the same time, on the same hardware used to mine bitcoins. With the rise of specialized ASICs for Bitcoin, Litecoin continues to satisify these goals. It is unlikely for FPGA or ASIC mining to take over Litecoin until the currency is widely used."
Here is a criticism from Wiki, containing a beautiful logical fallacy:
Since the aforementioned reasons mean Litecoin has no future potential, it effectively functions as a pyramid scheme, rewarding those who get in sooner at the expense of those who adopt it just before it finally fails (and are left with nothing). This is not the case for Bitcoin, since it has significant potential to become a long-term currency and continually be beneficial to adopters no matter when they begin using it."
Well, of course, Bitcoin is just as big of a pyramid scheme as Litecoin, there is no difference and the reason provided is complete BS. Litecoin has just as much potential (or not) as Bitcoin.
If I were into mining, I would mine Litecoin, because it is still early in the scheme, can be done with older computers, and it is possible that Bitcoin will suffer the fate of Napster, while other, later peer-to-peer similar systems survived, but the biggest/most famous was taken down...
Last edited by Pedro40; March 10th, 2013 at 11:01 AM.
One must realize that the (earlier mentioned) mining poster was using multiple computers to achieve his profit. Here is his calculation for 1 gaming computer:
"But if you are a gamer and have a 7970 or a 7950 running the rig while you are not gaming has become very attractive. 1 7970 can hash at 500 easy underclocked not hot. it will earn close to 2 coins a month while burning under 20 bucks."
Wow, speaking of Litecoin. LTC is on fire. If you guys thought that BTC's raise from 30 to 47 was good, how about LTC going from 0.07 to 0.64 in 2 weeks? That is a 800% return.
So let's play a game! Since I have been bearish on BTC and bullish on LTC, let's say that today I short BTC with 1K dollars at $47.3 or what the closing price was and I go long LTC at $0.64 (I am not sure why there are 2 lines on the chart)
I wonder how US government can prohibit Bitcoin? It's an offline currency, in a sense you don't have to keep it online in some virtual bank like virtual US dollars or any other fiat/virtual currency (all of them having intristic value of 0, unlike bitcoin that at least can be valued as money used to mine it), so they can seize the bank/accounts. You still can keep it safe and email it over where necessary. This genie is out of the bottle and Helicopter Ben can't laid his hand over it.
1. If not the personal users, they can prohibit merchants to use it. Then you can only use it for international transaction as a US citizen.
2. It is not completely anonymus. So if they really,really want to, they can figure out IP addresses and such.
3. They can do more malicious things like just messing with the value, effecting it in certain ways. As long as it is very volatile, it won't get used widely...
If I were a merchant, my biggest problem with accepting BTC is the volatility. As a seller, anytime when the value goes down, I lose money. And it does fluctuate quickly, on an hourly base easily 2-3%. That is just way too much and as a merchant I don't have time to monitor the current value...
I agree about the usage, but I am sure as soon as most coins are mined it will get stabilized. Again it might be a very good store of value, like gold. Gold is volatile too but it is just an opportunity to buy on dips. As long as FED and its siblings will keep destroying their currencies volatile or not fiat currencies are much worse store of value. IMO
PS world does not end on US border, even if US is isolated from Bitcoin or similar stuff, other countries will keep growing their use. Anything that is prohibited becomes ever more attractive.
Well, it will be 120 years from now, when all BTC is mined, so I don't think I will wait that long for stabilization.
The difference between a country's currency and an online virtual currency, that the virtual one can be abandoned in a moment's notice. Even if foreigners abandon the dollar, Americans still have to buy goods and pay taxes using dollars. So they simply just can't get ride of it...
The other thing is competition. I already mentioned Litecoin. Since miners realize that their task is getting harder they might pick another currency where they can get a better reward. Litecoin mining depends on CPU not on GPU, so it is easier with the average computer...
OK, I misread the chart, so my March 10th price was actually much better. The 0.64 was actually the 100 LTC/BTC ratio (yellow line), and the actual dollar (or penny) price of Litecoin was about 26 penny, currently that is 56 penny after topping at 73 penny a week ago. (the green line on the chart).
So I already doubled my money in LTC while the BTC short is at small loss. There was one big one day drop since I shorted BTC went down to 37$ then recovered.
Bitcoin news, unrelated to the current Cyprus banking crysis:
1. There was a switching to a new software problem on March 13 and Mt. Gox had to suspend trading for a while, until they shorted out the problem.
2. Mt. Gox also gave out new withdrawal limits. I guess if you have lots of BTC, you can't just cash out quickly...