Guest “you gotta be kidding me” by David Middleton
Solar-Powered Bitcoin Mining Could Be a Very Profitable Business Model
Tam Hunt outlines the compelling economics for using solar to supply Bitcoin mining operations.
TAM HUNT SEPTEMBER 11, 2017
Bitcoin and other cryptocurrencies are now a major business, with the global market capitalization of these coins exceeding $170 billion at their recent peak, according to Coin Market Cap.
Bitcoin alone has reached over $70 billion in value, up from nothing when it was created just eight years ago.
A major issue with Bitcoin, which may eventually undermine success unless it is remedied, is the massive amount of power required for “mining” of the coins.
The mining metaphor is apt because bitcoins are created through specialized computers looking for the correct codes (hash keys), just like digging for gold. That electronic digging takes more and more power as more and more people dig for that virtual gold. Sebastian Deetman calculated in 2016 that mining would require as much electricity by 2020 as the entire nation of Denmark currently consumes.
[…]
The bottom line is that solar-powered Bitcoin mining operations can be highly profitable and enjoy payback times as short as a year or two. After that, Bitcoin revenue comes with almost zero ongoing costs for another 25 years or more for solar farms — though the mining machines will need to be upgraded periodically.
[…]
GreenTechMedia
“The mining metaphor is apt because bitcoins are created through specialized computers looking for the correct codes (hash keys), just like digging for gold. That electronic digging takes more and more power as more and more people dig for that virtual gold.“
OK… So let’s assume we did some solar powered Bitcoin mining and struck the mother lode of “virtual gold.” Do we take the virtual ore to a virtual assayer?
How to Use Bitcoin for Purchases
Bitcoin can be an investment, but it’s also a currency. And a store that accepts bitcoin payments may be closer to you than you think.
Steve Fiorillo
Apr 18, 2018[…]
Where Online Can I Buy With Bitcoin?
Do the proper research on whether a company is currently allowing for bitcoin use, as some may have integrated it at one point but may not be using it at the moment. Steam, Valve’s video game distributing platform, stopped allowing bitcoin payments in December 2017, citing the volatility but admitting they may come back to it. Dell claimed it was a lack of interest that led it to stop accepting bitcoin in November 2017. But there are plenty of other places that continue to allow you to pay with bitcoins.
What can you buy with bitcoin online? Depending on the retailer you choose, quite a bit. Overstock.com (OSTK – Get Report) has more of an investment in it than anyone, using it to develop their own blockchain. Those looking for basic retail goods (apparel, furniture, home décor, etc.) can shop on Overstock, check out, and use the option to pay with bitcoin.
Electronics retailer Newegg has also been a big proponent of bitcoin. Computers, televisions, gaming consoles and more can be purchased with bitcoins on Newegg, with separate methods of payment depending on whether you are on mobile or desktop.[…]
The Street Dot Com
Maybe I’m just being a grouchy old geologist, but does any of the above justify Bitcoin mining? Much less solar powered Bitcoin mining? Most people get jobs and use their income to purchase crap online.
Then there’s this…
Bitcoin can also be used in some cases to make donations. Want to donate to Wikipedia? You can do it anytime and they connect with Coinbase to allow for bitcoin transfers.
There are many other websites that currently allow for bitcoin too, including but not limited to:OKCupid (dating site)
The Street Dot Com
CheapAir (travel/hotel booking agency)
PizzaForCoins (pizza delivery)
Zynga (Mobile apps/games)
Etsy (e-commerce, some Etsy sellers accept bitcoin as payment)
I wouldn’t donate real money to Wikipedia… I certainly wouldn’t pay real money to set up a fake mining operation to fund fake money donations to Wikipedia.
What else could I use the virtual ore for?
How to Use Bitcoin at Stores
Bitcoin still hasn’t hit a point yet where it’s a common method of payment at your average retail outlet. We’re not sure if or when it would reach a level of ubiquity even 1% close to the dollar. But whether as a novelty or because the owners truly believe it’s the wave of the future, there are some places out there that you can physically go to and pay with bitcoin.[…]
The Street Dot Com
I guess dropping a wad of Bitcoin at the mall is out there in the distant future when fleets of autonomous ride-share EV’s have replaced personal automobiles… Does Uber take Bitcoin? You can apparently purchase Uber gift cards online with Bitcoin. I just use my AmEx card and skip the whole fake mining bit.
Does Bitcoin serve any purpose?
Bitcoin: Does It Have a Place in Your Portfolio?
By Schwab NewsroomBitcoin continues to be a hot topic. Prices for the digital currency rose by more than 1,000% in 2017, but are down more than 49% so far in 2018. In December 2017, Bitcoin futures started trading on two major U.S. exchanges.
This has left some investors wondering: What’s the big deal with Bitcoin? How risky is it, and is it something I should consider for my own portfolio? Here are some facts:
What is Bitcoin?
Bitcoin is a digital currency—or “cryptocurrency”—that allows online payments to be made directly from one party to another through a worldwide digital payment network, without the need for a central third-party intermediary such as a bank.
[…]
Why is Bitcoin’s price so volatile?
As of April 11, 2018, the price of a single Bitcoin was about $6,900 and people around the world held approximately $117 billion in Bitcoins.¹ At this price level that exceeds the market capitalization of such bellwether companies as Nike, American Express and Caterpillar. It is relatively small, however, compared with the $6 trillion value of all outstanding gold bullion, and the market capitalization of $23 trillion for the stocks in the S&P 500® index.
“Because Bitcoin is limited to 21 million coins, and an estimated four million have already been lost, there is a large demand and a relatively small supply. Typically, that is a recipe for high volatility,” says Randy Frederick, Vice President of Trading and Derivatives at Schwab.
“Since two major futures exchanges began listing contracts on Bitcoin in December 2017, price declines may be partially attributed to greater price discovery, due to the ability to sell short in the futures markets,” Randy says. “Plenty of speculators, however, continue to buy Bitcoin due to the fear of missing out on something that has provided large profits—but also high risk—to many buyers.”
[…]
Know the risks
“Bitcoin’s dramatic rise and fall has been driven primarily by supply and demand, not valuations,” Randy says. “Bitcoin doesn’t have earnings or revenues. It doesn’t have a price-to-earnings ratio, price-to-sales ratio or book value. Traditional value metrics simply don’t apply, so there are no current methods for assessing its value.”
With a price gain of more than 4,000% in a little more than two years, Bitcoin was definitely in a bubble by most definitions, Randy says. And while the price has fallen more than 63% since the highs reached in mid-December, it is still up more than 80% over the past 12 months, so it’s important for investors to understand that investing in Bitcoin is extremely risky, he says.
Risks include:
Financial loss: Bitcoin prices historically have been highly volatile, and fluctuations could result in significant losses for investors.
Fraud and cybercrime: These already have occurred. For example, in 2011, Japan-based Mt. Gox, then the largest Bitcoin exchange, experienced a security breach in which 850,000 Bitcoins worth approximately $450 million were stolen. In November 2017, a cryptocurrency called Tether reported a $31 million theft.
Theft or loss: A login ID and password is usually needed to access the exchange, so if that is forgotten, lost or stolen by a hacker or phishing scam, access could be denied or lost. Online purchases still require a link to a bank account and/or a credit card. While Bitcoins can be stored in physical wallets so they can be spent without a computer, this creates the same risks as with all cash currencies: They could be lost, stolen or destroyed by accident.
Computer outage or cyberattack: Bitcoin exchanges have been subject to computer outages caused by excessive demand or other problems. Also, because ledgers and most holdings are held on the internet, a large-scale cyberattack could limit access during times of national emergency, something that would not happen with physical cash or gold.
Lack of regulation: Trading in Bitcoin and other cryptocurrencies is largely unregulated. Washington has been devoting more resources to monitoring digital currencies, but regulators have not reached a consistent or universal stance.
“Bitcoin doesn’t fit within accepted asset allocation models, as it is neither a commodity nor currency in the traditional sense,” Randy says. “Virtual currencies are highly volatile and still lack many of the regulations and consumer protections that legal-tender currencies have. Due to the high level of risk, investors should view Bitcoin as a purely speculative instrument that should only be traded with money that they can afford to lose.”
Charles Scwhab & Co.
So…
- Bitcoin is like gold and crude oil, except that it serves no physical purpose.
- Bitcoin is like a credit card that isn’t widely accepted… But you can leave home without it.
- Bitcoin is just like cash… at less than 1% of stores.
- Bitcoin isn’t an investment. It’s a “purely speculative instrument that should only be traded with money that [suckers] can afford to lose.” Sounds like Powerball to me.
But… The folks at Green Tech Media are convinced that spending real money on solar power installations for the purpose of fake mining for fake gold “can be highly profitable and enjoy payback times as short as a year or two”???
On top of all of that…
If You Solve This Math Problem, You Could Steal All the Bitcoin in the World
Ryan F. Mandelbaum
Yesterday 5:55pmYou may have heard of the famous P versus NP problem. If you can prove or disprove its cryptically short equation, you’d be a million dollars richer—and maybe even billions of dollars richer, depending on your scruples.
The importance of P versus NP is mainly in its consequences for computing. It happens to be one of the seven Millennium Prize Problems, meaning The Clay Mathematics Institute of Cambridge, Massachusetts will award $1 million to whoever manages to prove or disprove the statement. But should you prove that P in fact does equal NP, you wouldn’t even need the $1 million prize. As theoretical computer scientist Scott Aaronson explained last week at a lecture in a stuffy auditorium at Los Alamos National Lab in New Mexico, proving that P=NP would open up some intriguing possibilities.
“If someone proves P=NP, the first thing they should do is steal $200 billion in bitcoin. The second thing they should do is solve all of the other Millennium Prize Problems,” Aaronson said.To understand this…
[…]
Gizmodo
To understand this… I would need to drink a whole lot of this…
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Bitcoin is the ‘currency’ of choice of drug barons and dealers and of a whole raft of criminals with similar parasitic tendencies. That alone ought to be enough for decent folk to keep well out of it.
No by volume the US dollar is the currecny of criminals.
in crypto land, monero would be the currency of choice.
Perhaps at age 92 I m a bit thick. I always thought that money was a
promise from the country who prints it to return something in exchange for
it. But to have the value in the first place the money has to be based on
something of value. Hence the use of gold as the base. It had a value as it
was scarce and took a lot of energy to dig it up, as it still does.
It did have a value in its own right being a soft metal which can easily be
shaped into many things. But for the majority of today’s paper money
it has to be based on something of real value. That used to be Gold,
right up to recent times.
But in I think about 1949 a big conference at Brinton Woods decided to
cease the use of gold and to instead to base money on the Gross National
Product , the real wealth of a country. It became known as paper gold. Its
also known as GNP as with the internal one of Gross Domestic Product, GDP.
Today that value is determined by the world financial market, the currenty
of most countries are “”Free”” they move in value, depending on what
the rest of the world thinks that your Country is worth.
So getting back to Bitcoin , what is its basis for its value ? Its just a
form of barter, and will only work if the people using it, trusts each other.
So the “”Minor”” uses a lot of electricity to “”Minee””it, and that costs him/ her real money.
MJE VK5ELL
Personally, Michael, I think you’ve hit the nail on the head.
Along with Rod Evans story, I think Bitcoin is on a hiding to nothing, unless you got in early, made your money, and got out.
If any green ever tries to sell you Bitcoin, please inform him/her just how much of the evil CO2 it costs to mine one Bitcoin.
” I always thought that money was a promise from the country who prints it to return something in exchange for”
Yes sort of. Most “money” is IOUs although some — like the quarter dollar coin in my pocket — is in the form of physical objects/tokens. But not all IOUs are from governments. Many (most) are from individuals or corporations. Worse, some are “backed” by future cash flows — mortgage payments for example — that may be less than certain. The fact that this shambles works at all, much less mostly pretty well, is something of a miracle. Where do cryptocurrencies fit in? Mostly they don’t seem to although they have many of the trappings of money. One crucial difference. If/when things go pear shaped, the world’s governments will probably do their best to keep the Dollar/Euro/Pound/Yen/etc afloat and working after a fashion. They don’t/won’t work as hard to support minor currencies like those of African or Latin American nations. They likely won’t care at all if Bitcoin’s “value” evaporates completely. In fact, some might regard that as a good thing.
Recommended reading: John Kenneth Galbraith “Money: Whence it Came. Where it Went” It’s a well written, and pretty comprehensive summary of the history of money and economic notions of money up until the late twentieth century. You don’t have to believe/agree with everything Galbraith says, but it does present a plethora of facts and ideas that any theory of money probably needs to take into account.
When I read about bitcoin the Chicago Climate Exchange always comes to mind.
Something of no value (except in the minds of the investors) was created , $$$$ poured in, the creators made a bundle and now the investors hold a worthless investment.
Well what did you expect with the money printers debasing the unit of account medium of exchange and store of wealth? With so much faith in computer modelling nowadays why wouldn’t you put your garbage in to see if you can get some better garbage out?
Steven claims that the blockchain is immutable–not possible to change or rewrite (faith??)
Steven also claims that this is “infant” technology. So what happens once this infant matures, and then is totally obsolete –in only a few more years?? Isn’t that what happens to all digital technology??
A song for bitcoin
See the pyramid along denial.
Personally, I’ll keep my limited wealth in hard assets, and keep them physically close at hand.
JVC
– a currency not backed by a state will lose value:
The “Original Bitcoin” Was This Giant Stone Money on a Tiny Pacific Island:
https://www.sciencealert.com/the-original-bitcoin-still-exists-as-giant-stone-money-on-a-tiny-pacific-island
“Yap or Wa′ab (Yapese: Waqab) traditionally refers to an island located in the Caroline Islands of the western Pacific Ocean,”
– since Yap is “just another Pacific island” stone moneys value is zilch, null, nada, niente, nill.
– why should someone with the technology of bit coining sell his products instead of holding on it: there has to be a bit coin community.
– the whole thing is a casino and winner is: the casino.
psst there is no casino owner.
hint 2
all state back currencies lose value
Down here in Australia a Chinese bitcoin mining concern uses the total output of a coal fired power plant that was going to close because of all the govt mandated subsidies tax payers contribute to wind and solar and the negative impositions by successive governments on coal. This of course means the tax payer power bills are also much higher and rising.
The Chinese company does this because it provides them with the least expensive form of power available in Australia to run their farm, and the power plant owners are happy because they don’t need to close.
happens in isolated cases in the USA as well
You old dinosaurs just dont get it do you? clinging to your old ways, pfffft! Let go! for a bright new future awaits you, renewably powered, EV transported, bitcoin funded , vibrantly diverse , free of cost. and you can chose to be any sex you want on any day you want. I’m pretty sure the last days of most civilisations look like this.
Steven I am not sure how hard and/or expensive it would be to have a few mobile server farms for crunching bit coin data…… As you know CA has installed a bit more PV than the current grid can accommodate which leads to negative prices. As no market can last for long when folks lose to much money some flexible demand is gong to be needed soon to help stabilize the market.
A bit south of my location CASIO node HOLM2_7_B1 had Locational Marginal Prices (LMP)of −$343.45 or more for 3 intervals (ie 45 minutes) on the 15 minute market stating at 07/04/2019
Hour: 15-16 Interval: 4
http://www.caiso.com/TodaysOutlook/Pages/prices.aspx
That geographical location appears to be transmission line constrained as congestion was noted as running -350 bucks at the time. The hydrogen economy isn’t moving any closer to taking up some of the excess supply and Stanford can only heat up so much water on campus….
That is a perfect example of the kind of situation my customers exploit.
Recently we decided to make some changes to the device to allow the machine to
operate as a varible load to the grid so that people could exploit these negative energy price
situations.
Steven,
I concur with Doug about the “SLOW” part of the banking system.
https://www.caseyresearch.com/articles/doug-casey-on-bitcoin-part-i/
…”SWIFT is expensive (typically $50-100 per transaction), slow (generally a day or two, sometimes a week or more), and insecure (who trusts either big banks…”
My big, formerly SF based, bank appears to have increased their float time on my pension check! What was a one business day hold for part of the funds turned into 2 day hold earlier this month.
adoption of new technologies in money
Fascinating discussion.
I’m basically with Mosher on this one with some notable exceptions.
There is not just one Bitcoin… there are three variants of the original and over 2000 other crypto currencies now in existence.
I bought a few $1,000 worth before the first fork, split them after both forks, cashed out my original stake back into my bank account and more than doubled my money at the end. Was I wanting to make money? No. I was curious to understand how it worked.
One area I disagree with Steve on is that the main attribute of currency that the winner of the Crypto wars will have is utility ie as a medium of exchange. That is the real value of any monetary system. All the scams are about store of value and HODLing or not… irrelevant for the future.
There probably is really only room for ONE crypto currency in the future. He is correct that the real difference from other forms of money is that it is an immutable ledger of transactions that can never be changed once laid down in the blockchain. What many (most) people don’t grasp is that it is possible to store data in each transaction and also to have programmed transactions that can execute at any time in the future. No central authority controls the process. In other words no government, person or organisation controls it. It is inherently non-inflationary – government can’t just decide to arbitrarily print some more.
Then there is the really fascinating story about who was the creator of Bitcoin. You thought there were religious wars about Climate Change? – you ain’t seen nothing yet :-).
I recommend;
https://craigwright.net/
and
do a search for who is Satoshi Nakamoto?
It intrigues me that here in Australia and I think most parts of the world there is very little written about this saga in the main stream media. I am not sure whether this is because the establishment want to hide it (not into conspiracy theories myself) or because the story has only started and most journalists haven’t had the time to get their heads around the truth or lack of it in all the discussions. If Craig Wright is not Satoshi then he is an amazingly brilliant, deluded and knowledgeable con artist. I am leaning towards the idea that he is Satoshi at the moment… let’s see.
I am only interested in BSV these days… waiting for the incoming flack (ducks his head as he hits Post Comment :-).
I love hash wars
more sales.
no comment on BSV or BCH
Then there was _unwriter and let’s not forget the Metanet. You know – the idea that the whole internet will be hosted on the blockchain. Once you stop laughing, go and do some research. Not so fanciful! Once an image or page or file is there it is retrievable forever. Every click can be monetised. We could be paying Anthony Watts directly for all the great work he does.
This has started at;
bitdb.network
Like Satoshi, _unwriter was trying to remain unknown but has come out recently to say that he/her/ze (whatever they are) will reveal their identity and form a company to advance this technology. Now THERE is a real investment opportunity!
PS: You heard it here first.
yup dont forget IPFS
The most common result of bitcoin mining is the kind of thing that happened last year in South Africa. A company set up a ‘bitcoin training’ scheme, to ‘teach’ people how to ‘invest’ in bitcoin. (The quotes are used to express my grimaces at the terms!) So, they sort of explained how to invest, and held out the future of absolutely GREAT profits. And the marks, sorry, clients, did invest, through the company’s expert. And one day, the expert disappeared, and so did umpteen million Rands worth of the ‘investors’ cash. It turned out that the expert investor only existed as an e-mail address and cellphone number, and no-one knew who he actually was. Or where!
Ah yes, one of the classic ‘con’s!