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Old 02-12-2018, 03:50 PM   #1
nec207
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What is crypto-currency mining?


What is crypto-currency mining?

Is this why RAM and video cards are skyrocketing in price?
 
Old 02-12-2018, 05:09 PM   #2
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In the earliest days of the Tulip Mania "crypto-currency" swindle, the premise was somewhat-successfully floated (among the gullible, at least) that things were "valuable" (and, indeed, that they were "currency"), because they were "rare." The original algorithm was engineered to set an absolute cap on the number of tokens that could be generated, and the algorithm for generating them was extraordinarily "computationally intensive."

When "the first group of would-be gold miners" first figured out that they needed more horsepower, an initial group of profiteers swept in to provide them with "gold-mining equipment" ... sold for dollars, but-of-course.

Today, however, this swindle is already in its final stages: big-money speculators have pushed this always-abstract notion into the already-rarefied "further level of abstraction" that financial pundits love to talk about. So, if you're sitting on the sidelines wondering whether you should buy hardware at this point, "sorry, but you're much too late." (Which, for you, is actually a very good thing.)

- - -
All that having been said, "at least around here," I perceive no particular fluctuation in the price of hardware of any sort.

Last edited by sundialsvcs; 02-12-2018 at 05:10 PM.
 
Old 02-12-2018, 05:16 PM   #3
jefro
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I guess a lucky few could use electricity and hope for getting rich. In most cases the cost of electricity offsets the rewards.

Some folks with access to super computers may have already figured out how to get rich quick.

Pretty much all you need to know is on wiki web pages.

It's a ponzi scheme.
 
Old 02-12-2018, 05:48 PM   #4
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Crypto currency is NOT a Ponzi Scheme though some people have run Ponzi Schemes with crypto currency as the bait. Calling the currency itself a ponzi scheme is confusing the bait with the trap. Mining used to be easier and cheaper and therefore more profitable but that some kinds of crypto currency like Bitcoin rose so high so fast in value may be a sign that detractors may be correct that crypto currency has a propensity to "deflate" as in the opposite of "inflation" where it in effect prices itself right out of the market.

Bottom line is that block chain based currency is very new and extremely risky. Like most legitimately high risk ventures it also is high reward if one gets in and out at the right times but people have been hurt and more will be hurt before there is any kind of shakeout. Add to that it is something of a threat to both governments and banking and they have and will continue to act to steal.... errrr "confiscate" and/or stop such ventures if they can manufacture ... errrr find some charge that may stick.

For these and other reasons crypto currencies are not for casual dabbling and the higher profile types may be as risky as buying Municipal Bonds from Detroit.
 
Old 02-12-2018, 07:31 PM   #5
nec207
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Quote:
Originally Posted by enorbet View Post
Crypto currency is NOT a Ponzi Scheme though some people have run Ponzi Schemes with crypto currency as the bait. Calling the currency itself a ponzi scheme is confusing the bait with the trap. Mining used to be easier and cheaper and therefore more profitable but that some kinds of crypto currency like Bitcoin rose so high so fast in value may be a sign that detractors may be correct that crypto currency has a propensity to "deflate" as in the opposite of "inflation" where it in effect prices itself right out of the market.

Bottom line is that block chain based currency is very new and extremely risky. Like most legitimately high risk ventures it also is high reward if one gets in and out at the right times but people have been hurt and more will be hurt before there is any kind of shakeout. Add to that it is something of a threat to both governments and banking and they have and will continue to act to steal.... errrr "confiscate" and/or stop such ventures if they can manufacture ... errrr find some charge that may stick.

For these and other reasons crypto currencies are not for casual dabbling and the higher profile types may be as risky as buying Municipal Bonds from Detroit.
what are they using these video cards for? mining???


What mining are they doing?

The GPU is processing the money transactions?
 
Old 02-12-2018, 09:00 PM   #6
frankbell
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Do a web search for "how bitcoin works."

The results should answer your questions. (Note that any article from a bitcoin-related website are likely to be--er--self-serving.) You might also use LQ search--there are a number of recent threads about bitcon.

Short answer: "Mining" refers to the process of accumulating bitcoins or other cyber-fiat-currencies, and, yes, GPUs have been used for that. So have CPUs and IoT devices and botnets.
 
Old 02-12-2018, 09:23 PM   #7
jefro
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You validate a transaction and you get a cut.

https://en.wikipedia.org/wiki/Ponzi_scheme

A ponzi scheme is where people late to an phony investment pay to make profit for those who were in early.


Although currency or barter comes in many forms there tends to be a supply and demand where value is associate with chattle or other real and tangible goods or services. Bitcoins are not related to goods or services. They are related to people wasting electricity.
 
Old 02-13-2018, 12:23 AM   #8
jsbjsb001
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Quote:
Originally Posted by jefro View Post
You validate a transaction and you get a cut.

https://en.wikipedia.org/wiki/Ponzi_scheme

A ponzi scheme is where people late to an phony investment pay to make profit for those who were in early.


Although currency or barter comes in many forms there tends to be a supply and demand where value is associate with chattle or other real and tangible goods or services. Bitcoins are not related to goods or services. They are related to people wasting electricity.
By that definition, I could say the same about the US financial system.

https://en.wikipedia.org/wiki/Nation..._United_States

Has your government re-opened yet?
 
Old 02-13-2018, 01:40 AM   #9
enorbet
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The key term being used here is "phony". What makes an investment phony is the seller not owning the goods if even they exist at all beyond "on paper"... sort of like selling the Brooklyn Bridge or "prime" real estate lots that have gorgeous fake photos but are actually swampland. Bitcoin, for example has considerable value, at least it has for a few years now. Whether that will continue is much like the value of stocks and bonds where it can disappear as quickly as overnight. That's not necessarily a scam assuming the value of the company wasn't falsely inflated and the company actually existed to do business. It's a scam when the value is hyped up a bit like the Enron and the real estate fiascos of a few years ago.
 
Old 02-13-2018, 01:59 AM   #10
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Quote:
Originally Posted by jefro View Post
Bitcoins are not related to goods or services. They are related to people wasting electricity.
Apparently bitcoin mining has become so energy-intensive that the "mines" now have to be located in the arctic to prevent the computers from burning out. It seems ironic that, just as the world is waking up to the reality of global warming, we are wasting more energy than it takes to power a city on this totally unproductive activity.
 
Old 02-13-2018, 07:30 AM   #11
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The key fallacy of these schemes is that "currency" has "value." Currency does not "have" value: it denominates or symbolically represents it. Furthermore, it has the agreed-upon status of Legal Tender: of being universally acceptable (by law) as payment for all debts, public and private.

Just like a tulip, a bitcoin token is the object of rampant speculation. It has no intrinsic value other than what a "willing buyer" would pay a "willing seller," which just might be nothing at all. Speculators hope that they won't be among the ones left standing when the music stops. They want to be sitting down and holding dollars.

However, block-chain tokens are a very exciting development – every bit as significant, I think, as public-key cryptography. The present problem is computability. If we could generate them en masse, as we can now do with SSL/TLS certificates, they would revolutionize many aspects of electronic money exchange – automated clearinghouses (ACH), credit cards and gift cards, and maybe other things not yet invented. But we will need billions of them, every day.

Our present mechanisms require separate authorities, fast communications networks, and precise timing and sequencing of events. We quite-literally lose millions of dollars today due to both crime (of course) and ... errors! Block-chain will be a significant improvement to that, someday (soon?).

Last edited by sundialsvcs; 02-13-2018 at 07:33 AM.
 
Old 02-13-2018, 11:51 AM   #12
enorbet
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Unproductive? Block chain has the potential to utterly change the future and since economics is the foundation of nearly all institutions and human interaction we are talking the very largest of stakes, the very deepest sort of change. There is a tremendous amount of hyperbola surrounding block chain and in a way I just added to it, but some of it is far more pointed that what I just wrote. This is true simply because I have little or no agenda in it since I have chosen, in a possibly cowardly fashion, to be a mere observer with my only activism being to talk about it in a hopefully objective manner.

Those who are threatened by it and abhor it are keen to destroy it because it likely threatens their existence. It is certain that it could be a threat and if we just concern ourselves with the concern of having to change to adapt, then it IS a threat. So they are very busy spin doctoring the entire issue to maintain status quo.

Those who stand to make money at it are want to herald it as liberating and "shiny" and the best thing since Democracy and real Capitalism. In fact some point out that Laissez faire Capitalism is the economic equivalent of Democracy where units of currency are the equivalent of votes. This too is something of a spin doctoring in my view since in a real Democracy every individual has one vote but in any given civilization at any given time there are "Haves" and "Have Nots". It never begins as a level playing field.

The key change may simply be the illusion that anyone can participate by "mining" which is essentially "accounting". This only gains substance once the problem of the great cost of accounting is reduced to where there is actually net gain and that time may have already passed. OTOH there are very large forces at work to create cheap, available energy. For example the cost per watt of photovoltaic cells has dropped nearly one thousandfold in just a few decades and one only has to look as far as one's cellphone or laptop to see that the cost, size, and performance of batteries is in a similar curve. The first mobile phones weighed pounds, cost thousands of dollars and kept a charge for about a half an hour of use time. So there are lots of other developments that can and likely will figure in the success or failure of crypto currency.

Here is one of the better recent articles I've seen to look at the main players in the main forces - banks and governments. As one of my college professors quoted "To the earthworm, the robin's song lyrics are not likely 'Cheerup!' ". How one relates to crypto, Godsend or Demonic Evil, depends entirely on who you are and what you are invested in, what has value to you,... and not just a little on how it all actually plays out.

--- How Blockchain Could Disrupt Banking ---
 
Old 02-13-2018, 01:02 PM   #13
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I have to admit that the establishing of rarity before value did, and does still, make me dubious about bitcoin. However, the fact that it has gained value as a means of exchange of labour, much like a coconut disc for example, does give it some credibility.
How does one exchange labour with a person in another country? What, apart from the promise of labour, does a US Dollar represent?
 
Old 02-13-2018, 02:20 PM   #14
sundialsvcs
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Enorbet, libertarians such as yourself can be the ones most-easily taken in by a swindle like this one.

If you think that "banks are evil," and that new technology represents "a threat" to them, then there's a pretty good chance that I can swindle you out of some of your money. And I'll do it by telling you what you're already saying, knowing that this is what you already believe and that you believe it strongly. Con artists have understood this since the world began. You'd probably be an easy and even a willing "mark."
 
Old 02-14-2018, 04:34 AM   #15
enorbet
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Once again sundialsvcs I think you are making unwarranted leaps to a conclusion counter to the evidence. First of all while I do have considerable in common with the politics and philosophy of Libertarians, having at one time been a subscriber to "The Freeman" I am quite aware that I am further to the right than some and further to the left than many. Don't mistake that to mean I think I am in the middle. It means that I hold disparate views on different aspects and it is sometimes in what is considered to be toward one extreme yet in another to the opposite extreme. It largely depends on if the aspect is primarily economic or social.

More to the point, I think you would like to assume me a gullible person since I have shown to be more accepting of what you consider to be the Official Party Line on Ancient Earth, Big Bang, Evolution, 9/11, and that we actually did land men on the moon not once but six times. However I don't accept these things from a position of authority, though that carries some minor weight, I have high levels of confidence in their veracity because of evidence and testing as well as a deep understanding of Science in general and Physics and Engineering in particular. One important and undeniable piece of evidence is that if I were so gullible as you would like to imagine I would have bought Bitcoin and not only did I not do that but I have warned others of the extreme risk.

I don't have beliefs. I have opinions based on evidence and my confidence level is directly proportional to a cross-section of the subjects importance to my life and the preponderance of evidence. More directly, no, sir, you could not swindle me because I don't jump to unwarranted conclusions. I need tested facts to form an opinion. I don't believe things because I'd prefer them to be true. I can't say I've never lost money, but I can say that I know for a fact that I am a hard sell. This very response may well be another example of just that since I'm not buying what you're selling. Nothing personal. It's just business and I take that very seriously.

Last edited by enorbet; 02-14-2018 at 04:37 AM.
 
  


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