What is with the bitcoin obsession?

[Kludge]

BTC now up to $7.40 USD. Been skyrocketing all day.

I wonder how many people are caught in trap hoarding BTC. Let's say you earn 50 BTC every month, and every two months, mining difficulty increases 10-50% (as well as the price for BTC). You could cash in at any time, but know that in a couple months, your cache of BTC will dramatically increase in value because the difficulty of mining has increased.

I wonder how many people are not mining, but purchasing BTC as much as they can now just to hold it while prices and difficulty skyrocket.

I wonder at what point they dump their BTC.

Trading, really, does not appear to make up a very significant portion of BTC's existence. All the trading forums/sites accepting BTC appear very barren, and (with a few excellent exceptions) many are overpriced. While acceptance of BTC may increase, it's very difficult to sell for it because of how rapidly the price fluctuates.

 

[hazek]

it's a true free market in action. We'll just have to wait and see it play out It's very interesting for me to watch this pure demand/supply working towards the right price.

 

[Kludge]

The idea that I'm effectively making $50 per day and once my other graphics card arrive, will possibly hit over $200/day for an initial investment of $2k and roughly $115/mo in electricity is mind-boggling.

 

[Omphfullas Zamboni]

I've been trying to transfer funds from my savings account to dwolla so that I can buy BitCoins from mtgox exchange. I've been waiting for the funds to transfer since these things were $5.50. It's killing me.

 

[hazek]

I've been trying to transfer funds from my savings account to dwolla so that I can buy BitCoins from mtgox exchange. I've been waiting for the funds to transfer since these things were $5.50. It's killing me.

Argh uff that sucks for you :S

 

[Omphfullas Zamboni]

Argh uff that sucks for you :S

With the full understanding that you are pro-BitCoin, an anonymous person from the Internet, and not presuming to give any financial advice – how bullish are you on BitCoins? I find it peculiar that these have risen to seven dollars but the amount of retail outlets that will sell you goods based on BitCoin payments is still few. What do you make of that?

 

[hazek]

I think it's overpriced probably and in a mania state. I suspect people are buying Bitcoins because they speculate they'll be able to sell them for more later on. I think we still have a way to go before the bubble pops, especially with the exponentially growing awareness. So yea I'm bullish, trying to buy some right now with my pokerstars currency.

I think the biggest risk with Bitcoins is if it's integrity gets compromised by an attack. If it can maintain what it promises from a technical standpoint I feel it will only spread and grow and it's price rise until the demand is met. At that point the price will probably overshoot but I don't believe it will ever be worth less then at least $2 IMO anymore unless of course as I said something goes wrong from a technical standpoint..

I own 0.49BTC right now and I'm looking to buy 10 and just hold onto them. Maybe day trade a bit I also am thinking about setting up an exchange service website.

And that's as honest and open I can be on this topic.

 

[Kludge]

BTC's bubble may finally burst. More than doubled in value to USD in a week from ~$3.50 to ~$8.75 yesterday. Now down to $7.50 and there isn't much bid resistance until it hits ~$6.80. Also not much ask resistance up to ~$8.35. Could swing either way, but it will be a big swing.

From Mt Gox:

 

[hazek]

yep yep, the supply is overwhelming the demand right now..

 

[hugolp]

About time. This increase was insane. Hopefully the speculation will stop a bit now.

 

[Omphfullas Zamboni]

My Dwalla account was verified on Thursday and I have to wait three more business days to get the funds into the account from my bank. Stupid ye-olde-fashioned financial system. I missed the bubble, altogether. :-(

 

[hazek]

You and me both buddy. Worst thing yet, someone payed be 2BTC for a favor and I got them just as it was poping so I quickly sent it to mtgox to make a few free cents speculating and the time it took to confirm and get added to my balance the price bottomed and I was in such a rush I didn't notice the support so I sold at the bottom of 5.8 and am now still waiting to buy back at 5.6

 

[Churchill2004]

Tried to convince my roommate to put $5,000 in when they were at 0.80. We're all kicking ourselves pretty hard right now over that one.

Thinking we'll buy in now if they get down to ~5.50-5.00.

 

[Kludge]

About time. This increase was insane. Hopefully the speculation will stop a bit now.

I've already made a small purchase @ $6.5 & if I can get my Dwolla account tied to my bank account soon, I plan on keeping the price at most as low as $7. I think the market's over-corrected at this point and we'll be seeing a lot of over-leveraged "professional" BTC miners backing out because of it. It's an unpopular opinion on the Bitcoin forum, but I'm convinced the price of BTC is tied almost exclusively to how much USD it costs to produce the average BTC. I think simply because of that and how quickly difficulty increases in BTC mining, BTC will always be rising at a pace of at least 15% per month.

There're a lot of really inefficient miners out there, purchasing $700-900 graphics cards which put out the same hash rate as 2 $160 cards and manage to draw even more electricity. I mean... there was actually someone who was talking about how they put 12 gb of RAM in their mining rig. Someone thought they needed a 1.2KW power supply for two 5970s. -- Just inexcusable wastes of money on their builds. I think because the market is adjusting for those cost-inefficient kinds of people, profit margins of efficient miners will always remain high.

 

[steve005]

You guys are throwing your money away, its a marketing scheme, and going up because your telling all your friends. You would be way better off getting some 100 dollar boxes of nickels, they are already worth around 130% more than face value in melt value, which would be the perfect barter item in a shtf senerio, or pre 1982 pennies, just sort with scale or buy sorter, they are worth almost 300% face value, and around 25% of all pennies are pre 1982

 

[Kludge]

You guys are throwing your money away, its a marketing scheme, and going up because your telling all your friends. You would be way better off getting some 100 dollar boxes of nickels, they are already worth around 130% more than face value in melt value, which would be the perfect barter item in a shtf senerio, or pre 1982 pennies, just sort with scale or buy sorter, they are worth almost 300% face value, and around 25% of all pennies are pre 1982

One of the more remarkable things I've been noticing lately is the greatly increased offering of products and services.

Silver can be bought @ spot using BTC now. There are other services offering, for example, the purchasing of computer components through sites like Newegg using BTC. People are very willing to part with their bulky metals for a convenient, secure, anonymous currency.

PMs do not allow for the type of convenience Bitcoins do which is necessary in a digital age. Trying to exchange silver for programming services, for example, adds days (weeks, possibly, if international) of wait as it ships, on top of high shipping charges. It's especially problematic because markets operate most efficiently when as large as possible, which just can't happen when you're restricted to local markets due to the weight and relative inconvenience of PMs. BTC, with the help of mature laundering services, is now truly anonymous, too.

 

[Omphfullas Zamboni]

Kludge
There're a lot of really inefficient miners out there, purchasing $700-900 graphics cards which put out the same hash rate as 2 $160 cards and manage to draw even more electricity. I mean... there was actually someone who was talking about how they put 12 gb of RAM in their mining rig. Someone thought they needed a 1.2KW power supply for two 5970s. -- Just inexcusable wastes of money on their builds. I think because the market is adjusting for those cost-inefficient kinds of people, profit margins of efficient miners will always remain high.

If I am correct in thinking that you do some BitCoin mining, would you mind posting the specifications for a cost-friendly mining rig? I was looking at some prebuilt systems which tend to cost between $1000 and $2000. That seems high…

Furthermore, I won't suppose you would know approximately how long it would take mining BitCoins before you recovered your initial investment/the cost of the rig? Let's say I was using a system with two graphics cards. I'm sort of inclined to try out this whole mining thing.

 

[hazek]

Furthermore, I won't suppose you would know approximately how long it would take mining BitCoins before you recovered your initial investment/the cost of the rig? Let's say I was using a system with two graphics cards. I'm sort of inclined to try out this whole mining thing.

Find the wiki page where they have all the graphic cards listed and their hashing speeds and then go to http://deepbit.net/stats.php and enter it at the top right side, see how much you'll get per day and multiply with the price.

 

[Kludge]

If I am correct in thinking that you do some BitCoin mining, would you mind posting the specifications for a cost-friendly mining rig? I was looking at some prebuilt systems which tend to cost between $1000 and $2000. That seems high…

Furthermore, I won't suppose you would know approximately how long it would take mining BitCoins before you recovered your initial investment/the cost of the rig? Let's say I was using a system with two graphics cards. I'm sort of inclined to try out this whole mining thing.

I've put together 4 rigs with 8 5850s @ $2k (no cases or OSes are being used) for a mining output of 14-22 BTC (at current price of $8.70, translates to $121.80-$191.40 per day -- you can figure out time to pay off initial investment ). I'd give you my list but 3/6 of the parts I used are out of stock. All that matters is the video cards. They consume the majority of the build budget, and almost the entirety of the electricity budget. Here's what you'll want for mining with 2+ cards:

*2Ghz+ dual-core processor. Don't bother considering Intel.
*MoBo with crossfire support (and on-board power/reset button for convenience's sake if you opt out of using a case)
*Suitable power supply. Should be Active PFC with 80+ efficiency. 550w+ is suitable for a mining rig with 2 OCd 5850s (and nothing else!).
*ATI graphics card. I got my 5850s at $145 through MIRs making it a no-brainer, but stock issues with ATI cards are becoming pretty difficult to work with. Whatever you do, don't buy Visiontek. I'm using ASUS cards which have excellent build quality. It OCs very high and stays under 60*C even on the hottest days (with the help of two window fans and another high velocity fan on the desk with them ). Sapphire cards also have excellent build quality and performance. Check out https://en.bitcoin.it/wiki/Mining_hardware_comparison for the essential gfx card stats.
*A suitable line going up to your mining rigs. Seriously, don't neglect to understand what your breaker's rated at. Had I put all 4 computers (and fans) on the one 15a-rated line going to the room they're held in, I'd either have tripped the breaker or burned down the house.
*No more than 1gb of RAM.
*Any hard drive with at least 10gb capacity (20gb+ if you use Vista/Win7). Don't pay retail for tiny hard drives. See if you can buy used off Craigslist or Ebay first. The hard drives will hardly be used. Alternately, you can run Ubuntu (and any other Linux distro) off a USB drive.



Outside of that, you'll want a reliable Internet connection where the PCs are, probably VNC software (I've been testing with UltraVNC with decent success), as well as a good 4+ port KVM switch to make installation super-easy. I grabbed a $30 4-port Rosewill switch off Newegg -- great buy.

Once the hardware's assembled, get familiar with MSI Afterburner (free -- don't forget to downclock your mem speeds!), install ATI SDK - this enables OpenCL processing on graphics card, 2.1 recommended (free), and of course, the ATI graphics driver - 10.11 recommended (free). You'll need to find a miner to use, too. If you don't want to mess around with a command line, GUIminer's very easy to use.

Another quick note -- if you mine in Crossfire, set the -f parameter on your miner to a minimum or 80. Play around with it. Setting that parameter high may improve performance if the cards are working independently, too. You'll probably want to join a pool, too. I personally use BTCmine.com due to the pool features, ability to set pool owner's cut, and owner's very watchful eye to prevent scoring system exploiters, but there's a good list @ https://en.bitcoin.it/wiki/Pooled_mining

P.S. I now claim .5% of whatever you mine. Don't forget to make regular payments to 1H8wCNyS1m7Zu1fCyfQbCDALJcQ2VCU5Ho

 

[hazek]

P.S. I now claim .5% of whatever you mine. Don't forget to make regular payments to 1H8wCNyS1m7Zu1fCyfQbCDALJcQ2VCU5Ho

lol