Quote:
Originally Posted by Wayne 962
Well, I have some opinions on this subject obviously. All money is fake - simply fiat currency backed by the government. Don't believe me? How much were Confederate dollars worth after the South lost the war? How about Reich marks after WWII? Pretty much zero. Another thing that's fake? Real Estate (huh?). Yup, the value of real estate is only dependent (again) on the government that supports it. Back in the Middle Ages, the people with the most real estate had the biggest armies to a) get more real estate and b) defend the stuff they already had. Without the government (and our system of laws, etc.), real estate is pretty much worthless in the grand scheme of things (disclaimer - I'm a big investor in real estate right now).
So, on to Bitcoin. First of all, Bitcoin is not used as a method of transaction currency. It's just too expensive per transaction and not convenient at all. The notable exceptions are with the illicit trade, where the cost of a transaction is not as important as evasion from the authorities and anonymity. Secondly, Bitcoin is on a self-destruct Titanic-like journey with no good end in sight. For those who know about how it actually works, the miners keep the system going, and if the cost of a single Bitcoin drops below the actual (power + equipment) costs to create a Bitcoin, then the miners will stop working and the whole system will probably collapse. Don't take my word on this, Google it. Bottom line - as Bitcoin gets older and older, the more difficult each transaction will be, and eventually it will be very costly and very difficult to make one Bitcoin (it's already close to that). Without the miners processing transactions, it's almost doomed to fail. Eventually. We just don't know
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Generally agree. Once we went off the gold standard money only has value because we all agree it does.
Your premise though of profitability of mining is not as linear as you describe. I mined for a while, I sold every Bitcoin I made instantly when it was generated (well fractions as I mined into a pool).
My break even point when I did it was $6000 per btc. If the price went up it was more profitable, price went down? Less so.
3 years ago I had state of the art asic miners. 17 terahash per 1500W of power. Now it’s 10x that. Point being of you consider boyles law and the rising price, it could potentially remain profitable for some time yet... ...but I realized that mining was only slightly more profitable than buying BTC and hoping it goes up, because the cost of mining equipment also fluctuates with the value of BTc. It’s actually quite elegant.