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Open Source Radeon Gallium3D OpenCL Stack Adds Bitcoin Mining

timothy posted about a year and a half ago | from the top-priority dept.

Bitcoin 140

hypnosec writes "The open-source Radeon Gallium3D OpenCL stack has been modified to support Bitcoin mining through the use of mining application 'bfgminer.' To mine Bitcoins using the open source GPU driver, one must use Tom Stellard's non-stock branches of Mesa, LLVM and libclc OpenCL library. Further, bfgminer must be patched as well. Once the patches are applied and modified code of the stack is used, users will be able to mine Bitcoins using the Radeon HD 5000 and Radeon HD 6000 graphics cards; however the cards have to be pre-HD6900 Cayman in case of the HD 6000 series."

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Will increased exposure make the market rational? (2)

h4rr4r (612664) | about a year and a half ago | (#43422311)

Bitcoins in a rational market would cost only as much as they cost to make with perhaps a small premium.
Competition for commodities drives the market price down to near cost in a rational market. I wonder if increased competition will do that to this market as more and more way to mine get distributed. I doubt it though, but time will pop the bubble anyway.

Re:Will increased exposure make the market rationa (1)

serviscope_minor (664417) | about a year and a half ago | (#43422357)

Bitcoins in a rational market would cost only as much as they cost to make with perhaps a small premium.

The supply is limited, so you can't just produce more.

doubt it though, but time will pop the bubble anyway.

What bubble? Plenty of people perform transactions using bitcoin to pay for goods and services every day and go away happy. How is that a bubble?

Re:Will increased exposure make the market rationa (1)

h4rr4r (612664) | about a year and a half ago | (#43422411)

So they are all mined out?
Then what are the big miners doing with all those ASICs?

You can still mine Bitcoins, so they should not ever cost more than it costs to mine another one.

The bubble is the absurdly high price vs the cost to mine/create one.

you do realize the difficulty increases? (0)

Anonymous Coward | about a year and a half ago | (#43422537)

As each bitcoin is "mined", it becomes more work (and more expensive) to "mine" the next one. As long as this difficulty increases faster than the decrease in compute cost then the cost of mining another one will increase over time.

Re:you do realize the difficulty increases? (1)

h4rr4r (612664) | about a year and a half ago | (#43422587)

Yes, but the cost of mining one right now is what exactly? It is likely a 100 times less than what they are selling for. Which means in a rational market if I wanted a bitcoin I would either mine it myself or hire someone to do so. That would depress the price because my need was met at so much a lower price.

That is how rational markets for commodities work.

Re:you do realize the difficulty increases? (1)

bhlowe (1803290) | about a year and a half ago | (#43422705)

You can buy a bunch of equipment and hire someone to set up the mining process.. but nobody is going to mine them on their own equipment and hand them over to you as their "employer" unless you're paying them what the coins are worth. Bottom line: As the coins get harder to mine, all the coins go up in value. So people are factoring in the expected rise in value into their current value.

Re:you do realize the difficulty increases? (1)

h4rr4r (612664) | about a year and a half ago | (#43422741)

If this was true we would not have just seen a $100 drop.

The current price of coins is held up by people hoarding them. When they unload the price will drop like it did today.

Re:you do realize the difficulty increases? (0)

Anonymous Coward | about a year and a half ago | (#43423383)

Bitcoins are not a renewable commodity to be created, but a limited resource that gets progressively harder to extract. In the short term they are extracted relatively easily, but in the long term, they are in a finite supply.

What happens when supply is fixed and demand grows? Value goes up.

Re:you do realize the difficulty increases? (1)

h4rr4r (612664) | about a year and a half ago | (#43424177)

Or demand finds an equivalent good.

Bitcoins don't seem to have any good unique properties.

Re:you do realize the difficulty increases? (1)

Cigarra (652458) | about a year and a half ago | (#43424477)

I think you're right. What stops Litecoin, for example, to become an alternative currency similar in value to Bitcoin?

Re:you do realize the difficulty increases? (1)

h4rr4r (612664) | about a year and a half ago | (#43424553)

I would imagine their choice to use scrypt. Which personally makes it better, but it sure will piss off the ASIC miners.

Re:you do realize the difficulty increases? (2)

tchuladdiass (174342) | about a year and a half ago | (#43426221)

Simply because Bitcoin was the first to get major market mind share. It is like the million dollar home page -- this was someones home page which had a 1000 x 1000 grid of pixels, and he was selling them for $1 each (effectively selling advertising space on his home page). But since it had gained a lot of exposure it was worth the $1 per pixel, whereas no one else could pull the same trick a second time (since they would have the mind share).

Re:you do realize the difficulty increases? (1)

h4rr4r (612664) | about a year and a half ago | (#43426825)

But he can't even pull that trick again.
At some point the trick of bitcoins will suffer the same fate.

Now you would not use his home page, just setup your own site for advertising. All the bitcoin alternatives will likely do the same thing to bitcoin.

Re:you do realize the difficulty increases? (1)

Jawnn (445279) | about a year and a half ago | (#43424637)

Very aptly explained. This is why Bitcoin is nothing like a commodity, where external conditions can and do influence the availability/supply and thereby, the price. No such conditions exist, at least none with any significant impact on the cost of producing the commodity. Given that, Bitcoin looks a hell of a lot more like a pyramid scheme than a commodity. Those who "got in at the bottom", when the cost of mining was a very small fraction of the value produced, made out like, well... like bandits. By design, the Bitcoin "system" will never see a period like that again. The only thing that changes then, is the demand, and good lucking forecasting that one, suckers.

Re:Will increased exposure make the market rationa (1)

serviscope_minor (664417) | about a year and a half ago | (#43422633)

So they are all mined out?

Won't happen: the supply rate decreases over time and approaches but does not reach zero.

The bubble is the absurdly high price vs the cost to mine/create one.

How much is the cost? It's gone up a lot. You have to buy either a stack of cards (expensive) and a lot of electricity, an FPGA (hugely expensive) and a moderate amount of electricity or an ASIC (if you can even find one) and a small amount of electricity.

If I wanted to purchase something in bitcoins, the easiest thing to do, also factoring in the value of my time is to buy some on MtGOX and then use them.

Re:Will increased exposure make the market rationa (2)

Sarten-X (1102295) | about a year and a half ago | (#43423347)

How much is the cost? It's gone up a lot. You have to buy either a stack of cards (expensive) and a lot of electricity, an FPGA (hugely expensive) and a moderate amount of electricity or an ASIC (if you can even find one) and a small amount of electricity.

You can also build a particle collider and turn lead into gold, but that doesn't raise the price of gold to a few billion dollars per ounce. The cost that matters is the cost of people's effort to get a Bitcoin. If people are actively hoarding Bitcoins, the price rises until a cheaper long-run investment is to buy the mining equipment. If people are selling off Bitcoins, then the cost that matters is what they're selling them for.

Re:Will increased exposure make the market rationa (1)

Anonymous Coward | about a year and a half ago | (#43422487)

The supply is limited, so you can't just produce more.

The system has a limit built in, yes, but production is not meant to completly cease for quite some time still. It will simply get exponentially harder, which will increase the bitcoin actual, objective worth (which is currently far, far below its going price).

What bubble? Plenty of people perform transactions using bitcoin to pay for goods and services every day and go away happy.

Plenty of people perform illegal transactions. Extremely few, from an economic standpoint, legitimate goods are being traded for bitcoins.

How is that a bubble?

This is a bubble, because Bitcoins have NOT gained sufficient traction to be a serious currency; they are a mere commodity. Since a commodity is being traded for far,far more than its objective worth (the work involved in producing it, i.e. the hashing) it is a bubble and a rationnal market will drive the price down.

Bitcoin is not immune to basic economics, no matter how rose-colored your glases are.

Re:Will increased exposure make the market rationa (1)

Joce640k (829181) | about a year and a half ago | (#43422691)

It will simply get exponentially harder, which will increase the bitcoin actual, objective worth

Does that not sound like a pyramid scheme to you?

The people on the ground floor get rich, everybody else does a lot of work for practically zero return.

Then there's the manipulability of the 'price' of bitcoins. All it takes is a story on the web to crash the price (see story earlier today), then another story will bring them right back up again - there's no regulation so insider trading carries no penalty! Does that sound like somebody, somewhere might be ripping people off? It sure sounds like it to me.

The more time passes, the more I suspect bitcoin is just a clever con game deigned to make the creators very rich.

Re:Will increased exposure make the market rationa (1)

Anonymous Coward | about a year and a half ago | (#43424345)

No, it doesn't sound like a pyramid scheme at all.

Newcomers aren't paying anything to existing members, there's no downline or referral type scheme, and there's no recruitment requirements.

It's more like someone who bought into a tech stock early. They had the foresight/luck to be an early adopter and are now being rewarded for it.

Re:Will increased exposure make the market rationa (0)

Anonymous Coward | about a year and a half ago | (#43424783)

Same thing happened with gold and diamonds. Imagine that.

Re:Will increased exposure make the market rationa (1)

UnknownSoldier (67820) | about a year and a half ago | (#43422547)

> What bubble?

"Those who fail to learn the lessons of the past are condemned to repeat them."

http://www.activemanagersresource.com/images/TI/anatomy-of-a-bubble.png [activemana...source.com]

--
"EVERY civilization eventually collapses."

Re:Will increased exposure make the market rationa (0)

Anonymous Coward | about a year and a half ago | (#43422885)

So far that's been the case, but that does not mean that it has to be. Most of the things which have caused previous civilizations to collapse have been dealt with, the only thing that's possibly going to cause it would be asteroid hit or stupidity of the masses.

Re:Will increased exposure make the market rationa (1)

Kaenneth (82978) | about a year and a half ago | (#43427557)

“Two things are infinite: the universe and human stupidity; and I'm not sure about the universe.” - Albert Einstein

Re:Will increased exposure make the market rationa (0)

Anonymous Coward | about a year and a half ago | (#43423705)

Heh, compare [blockchain.info] .

Now let's see where it goes next.

Re:Will increased exposure make the market rationa (0)

Anonymous Coward | about a year and a half ago | (#43422571)

What bubble? Plenty of people perform transactions using bitcoin to pay for drugs and "services" every day and go away "happy."

You had a typo and forgot some punctuation.

Re:Will increased exposure make the market rationa (3, Interesting)

maeka (518272) | about a year and a half ago | (#43422617)

What bubble? Plenty of people perform transactions using bitcoin to pay for goods and services every day and go away happy. How is that a bubble?

What bubble? Plenty of people performed transactions for houses in 2006 and went away happy. How was that a bubble?

What bubble? Plenty of people performed transactions of dot-com stocks up through early 2010 and went away happy. How was that a bubble?

Re:Will increased exposure make the market rationa (1)

h4rr4r (612664) | about a year and a half ago | (#43422641)

Hey, people love tulip bulbs. They will never not love tulip bulbs.

Re:Will increased exposure make the market rationa (4, Interesting)

Sarten-X (1102295) | about a year and a half ago | (#43422679)

What bubble? Plenty of people perform transactions using bitcoin to pay for goods and services every day and go away happy. How is that a bubble?

People bought and sold houses during the housing bubble, and used dot-com companies every day in the dot-com bubble. Use has little to do whith being a bubble or not. The notion of a "bubble" is where the price of a commodity far exceeds its actual value. Yes, this can even apply to foreign currency like bitcoins. People are buying bitcoins more as an investment than for actual trade, so the price climbs higher, making everybody happy.

Then something happens. A few more big thefts, or a flaw in the protocol is discovered, or an economic externality makes people sell off just a few coins at less-than-market price, so they're sure to sell quickly. Other investors see the price fall, and they worry about the bubble starting to burst, so they sell quick, too... and that makes the price drop more, and the cycle repeats, sending the price crashing back to a price on par with its actual value.

The problem is that Bitcoins have very little intrinsic value. The value of national currencies is based on the stability ogf the government backing it, ultimately reflecting the currency's use for paying taxes and other government charges. Bitcoin isn't backed by a government, though, and even the prices for day-to-day trade are effectively just national currencies with an exchange rate and transaction fees applied. When the bubble finally bursts, Bitcoins' value will hover around the cost of the electricity & equipment to mine them, so investors can write off the purchase as a slight loss or slight profit.

Like all bubbles, there are some get-rich-quick millionaires who made a fortune getting in early, but their money will effectively come at the expense of those who come in later, buying the bitcoins they're selling off. Someone's always left holding the bag.

Re:Will increased exposure make the market rationa (1)

DrXym (126579) | about a year and a half ago | (#43422949)

Even today the bitcoin value took a shit, nearly halving in value. It's clearly a bubble, or rather it's a crowd sourced ponzi

Someone suggested Bitcoins should be called Dunning-Krugerands given the sort of people who think "investing" in this scam is a great idea.

Re:Will increased exposure make the market rationa (0)

Anonymous Coward | about a year and a half ago | (#43423539)

Someone suggested Bitcoins should be called Dunning-Krugerands given the sort of people who think "investing" in this scam is a great idea.

So you're a professional economist then? Most people I've heard mention the Dunning-Kruger effect are other amateurs who read about it on Wikipedia and now consider themselves experts on the subject.

Re:Will increased exposure make the market rationa (1)

khallow (566160) | about a year and a half ago | (#43424657)

So you talk to a lot of professional economists on the internet? Do tell!

Re:Will increased exposure make the market rationa (0)

Anonymous Coward | about a year and a half ago | (#43425731)

I'm not the layman accusing an entire market of the Dunning-Kruger effect.

Re:Will increased exposure make the market rationa (1)

DrXym (126579) | about a year and a half ago | (#43424871)

You don't have to be a professional economist to recognize that a "currency" that collapses and loses half its value in the space of minutes is a bad investment.

Re:Will increased exposure make the market rationa (0)

Anonymous Coward | about a year and a half ago | (#43425689)

If you're only investing based on risk with no regard for return, then every investment is worse than guaranteed fixed-rate funds. High-risk investments like this are part of a balanced portfolio, and for everyone who didn't just greedily pile on the latest bubble it's still a profit anyways. Did you expect after FinCEN recognized digital currencies, the price would simply raise to the correct number but no higher - with no correction?

Scare quotes around "currency" is fair, though - I'd agree at the moment it's behaving more like a commodity.

Re:Will increased exposure make the market rationa (1)

DrXym (126579) | about a year and a half ago | (#43426519)

Sorry, but the risk of bitcoin is right up there with "pyramid scheme" or "ponzi". Unless you were somebody who had bitcoins before the hype and chose the precise moment to exit, you are not going to see any return. That is because there is nothing to "invest" in.

Re:Will increased exposure make the market rationa (0)

Anonymous Coward | about a year and a half ago | (#43424007)

When the bubble finally bursts, Bitcoins' value will hover around the cost of the electricity & equipment to mine them, so investors can write off the purchase as a slight loss or slight profit.

You have it backwards. The price cannot be much higher than cost of mining. That's ludicrous. It can be lower though.

What keeps this bubble growing is that the mining cost increases at an exponential rate. However, there will be some point it becomes obvious that the value will be permanently lower than the cost of mining. The mining will effectively stop then and then you'll see the real burst.

Having the price follow mining cost would be an extremely desirable property, though. You'd get that e.g. with an infinite supply of mineable coins. The problem is that you can't make cash quick with such a system :)

Re:Will increased exposure make the market rationa (1)

Sarten-X (1102295) | about a year and a half ago | (#43424583)

The price can easily go far higher than the cost to mine. Consider gold. It costs well under $1000 for a large-scale mine to produce an ounce of gold, but because people are willing to pay a high price (hovering around $1500/oz) to get it now, the price is higher. It's the same with Bitcoins. People want them now, so the price risees. What keeps the bubble going is hype, making people want to get coins as quickly as possible, before the price rises even further.

Re:Will increased exposure make the market rationa (1)

h4rr4r (612664) | about a year and a half ago | (#43426879)

Until someone decides to sell, then the bubble pops.

Re:Will increased exposure make the market rationa (0)

Anonymous Coward | about a year and a half ago | (#43424051)

"The problem is that Bitcoins have very little intrinsic value."

You could say this about many currencies - the US Dollar is made of paper, which has little intrinsic value. But if by intrinsic you mean backed by a philosophy and institution with coherent standards and ethics and a means of enforcing them - ie a gov't, then by that measure bitcoin arguably has more intrinsic value than the dollar, hence the rush to own them.

Bitcoin's value emerges from the philosophical and technical grounds on which it is constructed. Like any currency, it is an abstraction of wealth, but unlike others it is decentralized, and difficult if not impossible to forge or spoof. It has the backing of "The Internet", in other words the new global information order, which is quite a powerful institution indeed. I would say Bitcoin has quite a lot of intrinsic value in this sense.

Re:Will increased exposure make the market rationa (1)

Sarten-X (1102295) | about a year and a half ago | (#43424737)

I mean value that won't diminish over time. As long as the US government accepts taxes at a certain rate with the dollar, the dollar will have some use. There's a reason to keep some dollars on hand. This is the intrinsic worth of any currency: The promise that if you accept it, you'll be able to spend it again later for something equitable. All currency is just an intermediate step in bartering. I sell my skilled labor today for my dinner next week, but in the middle I get a paycheck.

Bitcoins, though, have nothing that uses them naturally. Stores accepting them now use them as just a surrogate for other curriencies, so there's no reason to keep them on hand. Just convert what you need at the time of purchase, and never worry about a bubble bursting and losing the value of everything you've saved. Of course, if you have no reason to keep Bitcoins on hand, neither does anybody else, so why even accept them in the first place?

And that boils down to the only intrinsic wealth that Bitcoin has: its anonymity. Supposedly it's untraceable, which makes it valuable for those who care about having untraceable commerce, but that means the aforementioned promise of future use is limited to a small number of people. For most people, they're inherently worthless, being currently only an investment vehicle ridign a bubble.

Re:Will increased exposure make the market rationa (1)

roman_mir (125474) | about a year and a half ago | (#43424159)

When the bubble finally bursts, Bitcoins' value will hover around the cost of the electricity & equipment to mine them, so investors can write off the purchase as a slight loss or slight profit.

- disclosure (if you need it), from my point of view gold is the real money, not US dollars, not Bitcoins, not Euros, not any fiat.

however

I disagree with your premise that Bitcoins have no intrinsic value (just like I disagree with the notion that gold doesn't have intrinsic value, it obviously does or that the US dollar has intrinsic value, it obviously does not)

Bitcoins do have intrinsic value, which is tied to the value of the Internet or generally networking and being able to pass information around computer networks.

What is the value of Bitcoins? Ability to transfer purchasing power almost instantaneously from one part of the world to any other without suffering any government and banking regulations, delays, banking uncertainty in general.

The ability to transfer money around without it being subjected to various government controls is the intrinsic value. Now, can it be taken away? I suppose it can be reduced by governments of the world uniting to crash Bitcoins by attacking the exchanges.

So exchanges will have to operate in the black market rather than in the open, but exchanges cannot be destroyed or controlled, some will, but there will be many of those that will satisfy the market need to transfer purchasing power around.

Notice that there are stores that sell in Bitcoins but they also often cite the current exchange rate to whatever currency and they take a little commission to cover the fluctuation or maybe there is some cost of doing business via an exchange for a merchant.

What do you think they do? They have an account on an exchange, the moment they get a Bitcoin as part of a transaction they transfer it to an exchange and get some of their preferred currency deposited into their account with the exchange instead of the Bitcoins. But that means Bitcoins are like VISA only it's without debt and it's better from POV of transaction costs and regulations obviously.

Bitcoins do have value and it's different from what you propose.

Re:Will increased exposure make the market rationa (0)

Anonymous Coward | about a year and a half ago | (#43425431)

- disclosure (if you need it), from my point of view gold is the real money, not US dollars, not Bitcoins, not Euros, not any fiat.

Bitcoins do have intrinsic value, which is tied to the value of the Internet or generally networking and being able to pass information around computer networks.

What is the value of Bitcoins? Ability to transfer purchasing power almost instantaneously from one part of the world to any other without suffering any government and banking regulations, delays, banking uncertainty in general.

How's the weather there on Mt. Stupid [smbc-comics.com] ?

Thinking gold is a viable currency is an indication that you don't understand economics. You should avoid commenting on economic matters until you at least understand why I would say that.

Intrinsic value means value other than as a trade good. Your claim that Bitcoin's value as a "unregulated currency" even if accurate does not mean it has intrinsic value. That you would use the jargon this incorrectly further indicates that you probably don't understand what you're talking about. This is in addition to your unstated assumption that governments can't regulate bit coin which is completely unsubstantiated (especially since bitcoin relies on their existing a digital paper trail for the history of every bitcoin from it's creation through it's current owner.)

In short, STFU before someone less informed thinks you know what you're talking about and forms an assenting opinion thereby propagating you idiocy.

Re:Will increased exposure make the market rationa (1)

serviscope_minor (664417) | about a year and a half ago | (#43424279)

Someone's always left holding the bag.

Maybe, but if the bag is small enough then it doesn't matter.

Imagine that there was only a single Zimbabwe dollar bill. The way people trade is to move that single dollar bill round very very very fast. $1e9 trades have been made but when it suddenly loses all its value, the person at the end was holding a $1 bag, and they've lost a tiny bit.

My point is what matters is how much bitcoin is used for trading versus how much is used for investment (i.e. hoarding).

If bitcoin the amount of money that has circulated around the bitcoin network is substantially larger than the amount of money instantaneously stored then basically there is not much of a bag to be left holding. I.e. the amount of money lost will be vastly smaller than the amount of successful transactions performed.

Of course, the relative sizes count a lot.

But yes, there is significantl volatility which means some people will make money and some will lose, especially "investors". The people just involved in circulating them round and round will still happily buy stuff.

Re:Will increased exposure make the market rationa (1)

khallow (566160) | about a year and a half ago | (#43424709)

As an aside to this, I noticed when I was researching Bitcoins, that there will at some point be a transition from being rewarded for creating money to being rewarded for computing transactions. At that point, the people with the massive computing power are going to have incentive to throw at least some of these Bitcoins into the market just to generate more trade volume.

Re:Will increased exposure make the market rationa (1)

maeka (518272) | about a year and a half ago | (#43425249)

At that point, the people with the massive computing power are going to have incentive to throw at least some of these Bitcoins into the market just to generate more trade volume.

Bitcoin's exchange rate against the USD has no bearing on its utility as a token of exchange.

With fast enough exchanges and sufficient enough liquidity ("enough" being the key word) the total amount of Bitcoins in circulation doesn't even have a large impact on trade volume. Bitcoins don't get consumed in the process of trading.

Therefore I don't see how those with massive computing power (for generating income through transaction processing) benefit by selling previously-hoarded coins. If anything they benefit by not selling their coins, maintain artificial scarcity and thus high exchange prices since they get paid in coin.

Re:Will increased exposure make the market rationa (2)

SMACX guy (1003684) | about a year and a half ago | (#43424377)

When the bubble finally bursts, Bitcoins' value will hover around the cost of the electricity & equipment to mine them, so investors can write off the purchase as a slight loss or slight profit.

"Energy is the currency of the future." --CEO Nwabudike Morgan, "The Centauri Monopoly"

A currency based on something solid, pretty much impossible to fake, and hard to get confused about. Compare that to national currencies base on different people's varying fuzzy perceptions of the stability of the issuing government. Sounds pretty good, actually.

I think you're right (it'll stabilize at that price) but others think it'll deflate. This'll be interesting to watch. And damn useful to have a pocket change, for those usenet server subscriptions which don't take paypal anymore.

Re:Will increased exposure make the market rationa (0)

Anonymous Coward | about a year and a half ago | (#43424235)

Please define "Plenty"; because I don't think it means what you think it means.

Re:Will increased exposure make the market rationa (0)

Anonymous Coward | about a year and a half ago | (#43422379)

No, but time will.

The market is irrational because non-financial people are heavily invested in a currency market. They don't know it's not ok to do a sell order with a $250 trigger and a $150 minimum. It causes the market to crash if it hits $250 when you own 250,000BTC...

Re:Will increased exposure make the market rationa (1)

OneSmartFellow (716217) | about a year and a half ago | (#43422577)

Hmm, let's test your thesis the really simple way

Dollars/Euros/Rand in a rational market would cost only as much as they cost to make with perhaps a small premium.

Lesson: A medium of exchange (aka currency) is NOT necessarily a commodity.

Scarcity of the commodity vs. demand for the commodity drives the market price up or down in a rational market. I wonder if increased competition will do that to this market as more and more way to mine get distributed. I doubt it though, but time will pop the bubble anyway.

Lesson: I produce very few boogers, so they are scarce, BUT, importantly, there is to my knowledge zero demand for my boogers, so they have no value whatsoever. The number of bitcoins that will ever exist is finite (21,000,000), if the demand for them goes up, so will their price (or "value" if you wish to call it that).

Re:Will increased exposure make the market rationa (1)

h4rr4r (612664) | about a year and a half ago | (#43422597)

No those are currencies, not commodities.

You cannot right now produce legal USD or Euro. You can produce bitcoins though. Once all the bitcoins are mined then you will be right, but for now there is no scarcity at all.

Re:Will increased exposure make the market rationa (1)

Lazere (2809091) | about a year and a half ago | (#43422785)

That's not exactly right. You aren't producing the bitcoins, the chain is. You're simply awarded bitcoins for doing work. Not once in this transaction do you ever actually create the coins. Besides, bitcoins are being made a a far slower rate than the USD or Euro.

Re:Will increased exposure make the market rationa (1)

h4rr4r (612664) | about a year and a half ago | (#43422919)

Semantics. The coins do not exist in the market until the mining is done.

There are far more people who want USD or Euros, nor does anyone do fractional reserve banking with bitcoins.

Re:Will increased exposure make the market rationa (1)

Terrasque (796014) | about a year and a half ago | (#43424137)

but for now there is no scarcity at all.

Then why don't you just drum up a few hundred thousand bitcoins and sell them? You'll be bloody rich, AND you will have the pleasure of crashing BitCoin market and show everyone how right you are and how wrong they were.

From here [wikipedia.org] :

Currently, 25 bitcoins are generated every 10 minutes. This will be halved to 12.5 BTC within the year 2017 and halved continuously every 4 years after until a hard-limit of 21 million bitcoins is reached within the year 2140.

To compensate for increasing hardware speed and varying interest in running nodes over time, the proof-of-work difficulty is determined by a moving average targeting an average number of blocks per hour. If they're generated too fast, the difficulty increases.

So the supply is rather fixed globally. If the demand is higher than the supply, there will be scarcity, and prices will rise. They might bounce up and down while the market adjusts, but as long as the demand is higher the average price will rise, until it's high enough that the demand is at the same level as the supply.

The market is rational (1)

grimJester (890090) | about a year and a half ago | (#43422613)

Bitcoins in a rational market would cost only as much as they cost to make with perhaps a small premium.

They are probably mined as much as is economical to do. The main sign that this is happening is that mining without the latest generation of GPU is uneconomical. Any short term speculation that drives the price higher just makes it a better deal to mine more.

At the other end it's easy to imagine a situation where bitcoins aren't useful enough to be worth mining and the price drops below the cost to make them. As long as they're convenient for illegal transactions this won't happen.

Nothing rational about this (0)

Anonymous Coward | about a year and a half ago | (#43422773)

Bitcoin clients are not doing work as you say. Even SETI is at least doing something logical, albeit looking for a needle that may not exist or communicate in any way like we do in an infinite haystack.

Bitcoin uses up technology that would be better used on important distributed computing projects like big data for the people or gene sequencing. It merely creates another fiat currency, or the equivalent of one, only its not even viable as an alternative currency.

Such a shame..

Re:Nothing rational about this (1)

h4rr4r (612664) | about a year and a half ago | (#43422971)

These are not resources that would be used on SETI if bitcoins did not exist.

What would solve that is SETIcoins.

Re:Will increased exposure make the market rationa (1)

pla (258480) | about a year and a half ago | (#43424495)

Bitcoins in a rational market would cost only as much as they cost to make with perhaps a small premium.

You mean like US $20 bills, which cost 7.5 cents each to print? Or more like pennies (worth 2.5 cents of copper) or nickels (worth 7 cents of copper)?

Though ironically enough, as an unregulated market, Bitcoins do have a value near their production cost, as measured in electricity. As the difficulty goes up, people switch to more energy efficient mining techniques (from CPU to GPU to ASIC) or quit mining altogether as it becomes unprofitable.

Re:Will increased exposure make the market rationa (1)

h4rr4r (612664) | about a year and a half ago | (#43426917)

Go try and make your own $20 bills.

Bitcoins now consume $100+ of electricity to make?

That only makes me think worse of them.

Re:Will increased exposure make the market rationa (1)

Molochi (555357) | about a year and a half ago | (#43428223)

There is an article on the USA Today site regarding Bitcoin, what it is, and today's crash. USA Today is about as mainstream of coverage as you're going to get, so I would expect other mainstream newsources' articles and reports to be similar.

I read its tone as implying a $10 per bitcoin value (or less) as the norm with the recent spike attributed to horders and speculators that are purchasing coins. That article also mentions a boom/bust in 2011. However it also makes the case that the increasing difficulty at producing new bitcoins and the ultimately fixed number of bitcoins will continue to encourage hoarding rather than using bitcoins. As bitcoin reaches the conciousness of more people I would expect volitility to continue with many booms and busts.

I feel that as a product it is grossly overvalued at $120, but don't see any rationality on the horizon. I have little doubt that the price will climb again as new speculators get in line to buy en mas and crash as the old speculators cash out en mas.

Woops (1)

ADRA (37398) | about a year and a half ago | (#43422315)

Re:Woops (1)

DrXym (126579) | about a year and a half ago | (#43422967)

Bu-bu-but it's such an amazing investment!

Re:Woops (1)

Richy_T (111409) | about a year and a half ago | (#43424839)

What was the price three weeks ago? Three months?

Re:Woops (1)

DrXym (126579) | about a year and a half ago | (#43426545)

Ah right, so if you are endowed with psychic powers or extreme luck you can exit with money. Such a wise investment. A bit like investing in a pyramid scheme, hoping that you can build enough chumps below you to be one of the few to exit with a profit.

Re:Woops (1)

Richy_T (111409) | about a year and a half ago | (#43428415)

Unless you got in in the last 10 days or so, you're probably still looking good. Though it remains to be seen what happens when MtGox reopens in a couple of hours.

still won't compete with ASICS (0)

Anonymous Coward | about a year and a half ago | (#43422345)

The mining biz is going to FPGA or ASICs
That's where the power consumption trade-off is best.

Re:still won't compete with ASICS (3, Insightful)

skids (119237) | about a year and a half ago | (#43422601)

That's where the power consumption trade-off is best.

Well, at least this useless craze is adding more economic drivers for power-efficient compute
power, but I think we already had plenty of those drivers.

Otherwise it's kind of dispiriting to see the continued drain of computing and intellectual resources
by the financial sector, be it bitcoin using CPU cycles better used for medicine/science
or very smart people and advanced equipment chasing dollars in HF trading shops.

Sigh.

When you spend more time keeping core than you do playing, the game is broken.

Re:still won't compete with ASICS (0)

Anonymous Coward | about a year and a half ago | (#43428439)

You sound like someone who's bitter because their losing.

ASICs may have caused the crash (1)

grimJester (890090) | about a year and a half ago | (#43423525)

I just checked a comparison of mining hardware [bitcoin.it] and a mining profitability calculator [bitcoinx.com] . In essence, with the current prices ($120 last checked), GPUs are no longer profitable but a dedicated ASIC will pay itself back in less than a year even at $3/bitcoin.

Incidentally, I just realized how space based solar power could transfer the energy down to Earth. Just mine bitcoins in space, transfer them down and buy the electricity here.

Re:ASICs may have caused the crash (1)

pushing-robot (1037830) | about a year and a half ago | (#43424031)

Except they try to maintain the rate of payouts by scaling the difficulty. The more people mine, the more difficult mining becomes.

In other words, it's an arms race. If you have better miners than your peers, you can grab a bigger slice of the pie. But once everyone has the same equipment, you're back where you started (and out a lot of money on gear).

On the other hand, anyone not able to afford specialized hardware will be pushed out of the mining game. The rumor mill is already pointing suggesting Litecoin as a possible Bitcoin replacement, as it has a crypto algorithm designed to resist hardware acceleration and thus keep small miners competitive with big iron. Then again, it's best not to underestimate human ingenuity when piles of money are involved.

Re:ASICs may have caused the crash (2)

Richy_T (111409) | about a year and a half ago | (#43424913)

But this is somewhat by design. More hashing power means a healthier Bitcoin network. The point of the mining reward is not to be egalitarian in distributing new bitcoins but rather to encourage the networking effects that are needed.

Re:ASICs may have caused the crash (0)

Anonymous Coward | about a year and a half ago | (#43427873)

But if the hashing is no longer generating bitcoins, what incentive is there to keep the miner hardware running?

Re:ASICs may have caused the crash (1)

Richy_T (111409) | about a year and a half ago | (#43428383)

Transaction fees.

Re:ASICs may have caused the crash (1)

Molochi (555357) | about a year and a half ago | (#43428371)

There has been an expectation that dirt cheap ASICs would drive down the price once the work units to produce a bitcoin were adjusted for them. Personally I think there has been some monkey buisness going on here as shipping of them supposedly began in November-December of 2012. A $150 ASIC box is reported to produce 100x as much as a dedicated Videocard. Did that value get adjusted today? Finally?

IMO, the current value of a bitcoin has nothing to do with the cost to produce it or it would be in the $10-20 range, and that would still be a profit for the majority of people that mined them.

Re:ASICs may have caused the crash (1)

grimJester (890090) | about a year and a half ago | (#43428599)

IMO, the current value of a bitcoin has nothing to do with the cost to produce it or it would be in the $10-20 range, and that would still be a profit for the majority of people that mined them.

Plugging in the numbers, the 7750, which is the most energy efficient of the GPUs listed, needs a $25 price to break even if the hardware is free. That assumes a $0.15/kWh energy price, so if the majority has electricity in the 7-12 cents/kWh range you might be right.

Money laundering (2)

Lew Perin (30124) | about a year and a half ago | (#43422363)

That's Cayman as in Cayman Islands, right?

as easy as all that, wow. (0)

Anonymous Coward | about a year and a half ago | (#43422403)

as easy as all that, wow. Say I didn't watch to apply patchs and modify some code, how easily can I start mining bitcoins?

Re:as easy as all that, wow. (2)

Yebyen (59663) | about a year and a half ago | (#43422687)

Then you use the fglrx driver that is packaged in ubuntu and ppa:bitcoin/ppa

The news is news because Gallium3D is open source. I do not know if this means that GPU mining with ATI cards on FreeBSD is possible now, but I would speculate that yes, it is.

amd series 5000 HD? (0)

Anonymous Coward | about a year and a half ago | (#43422407)

does this mean that my $50 Radeon HD 5450 1GB 64-bit DDR3 PCI Express 2.1 x16 can mine bitcoins and blocks and stuff? it will probably take weeks or months to find a block though. lol

Does it work without a dekstop? (2)

TheCarp (96830) | about a year and a half ago | (#43422467)

I didn't look, don't know if they addressed it. I setup a miner a while back (should have kept it going...damn). What really took the most time setting it up, was that I didn't know it couldn't be done without a desktop running!

If I build a compute node, the last thing I want on it is a desktop. I don't want to have to login and start up the program....I want it to run on a headless box, and start from init.d or whatever the kids are using after I chase them off my lawn.

Re:Does it work without a dekstop? (1)

Yebyen (59663) | about a year and a half ago | (#43422707)

I am not 100% sure about this, but you can usually trick those programs that want to connect to a display using xvfb.

It might not work. I use this trick to do headless capybara-webkit testing. Worst case scenario, you need to launch a real X-server with a display. You should not need a monitor (I could be wrong about this too), but you do need to fool the graphics card into letting you access its hardware for OpenCL purposes.

Re:Does it work without a dekstop? (0)

Anonymous Coward | about a year and a half ago | (#43423767)

This is an artifact of AMD's driver. Nvidia OpenCL does not require X11 installed at all. My understanding is that AMD is working on it but they are not exactly rolling in the dough to hire developers for the effort.

Editor.sh (5, Insightful)

jomama717 (779243) | about a year and a half ago | (#43422503)

#!/bin/bash

for submission in ${submissions[@]}; do
  if [ ! -z `echo $submission | grep -i "Bitcoin"` ]; then
    post $submission;
  fi
done

Re:Editor.sh (0)

Anonymous Coward | about a year and a half ago | (#43424149)

Slashdot editors could be holding bitcoins anonymously and posting these stories strategically. During a major correction, mention an awesome new miner.

MH/s? (1)

Murdoch5 (1563847) | about a year and a half ago | (#43422575)

With two 5830's in XFire I can hash at 520 MH/s, will this increase that?

Re:MH/s? (1)

Yebyen (59663) | about a year and a half ago | (#43422737)

Try it and see, will not likely cost you more than a couple dollars in lost mining revenue.

Re:MH/s? (1)

n7ytd (230708) | about a year and a half ago | (#43424633)

With two 5830's in XFire I can hash at 520 MH/s, will this increase that?

Before I dumped all my hardware and got out of the mining business, I was getting 300MH/s from each of my 5830s in non cross-fire mode. I had one card that could run solid at 330MH/s, but the others became flakey at anything over 305 or so. Try slightly overclocking?

Re:MH/s? (1)

Murdoch5 (1563847) | about a year and a half ago | (#43425617)

Hmmm I'm getting 270 on the high end on each card with out pushing a hard over clock, they are slightly overclocked. I'd rather play it safe, I'm not trying to make any real money doing this.

Great timing! (0)

Anonymous Coward | about a year and a half ago | (#43422651)

Now that Bitcoin's crashed horribly this is a great time for Slashdot to start posting fawning, uncritical articles about this massively pointless 'currency' to pump the value back up with hype.

Is the proprietary firmware required? (0)

Anonymous Coward | about a year and a half ago | (#43422727)

Since it's not mentioned, it probably is...

Wasteful (2)

gumpish (682245) | about a year and a half ago | (#43423475)

I wonder how many megatons of CO2 will be put into the atmostphere due to people mining bitcoins by the time it's no longer profitable.

Re:Wasteful (1)

Cajun Hell (725246) | about a year and a half ago | (#43424409)

I wonder how many CO2-eating tree saplings you can buy and plant, with a bitcoin.

Re:Wasteful (0)

Anonymous Coward | about a year and a half ago | (#43425005)

CO2 sequestering trees.

Re:Wasteful (1)

amorsen (7485) | about a year and a half ago | (#43426001)

Irrelevant, the amount of bitcoins are independent of the effort spent to find them. Even if it did, it would still be irrelevant because increasing the supply of currency does not increase the supply of real goods, as the Spanish learned while colonizing South America.

ASICs own the bitcoin mining market already (0)

Anonymous Coward | about a year and a half ago | (#43423597)

GPUs are nice and all, but 90% of the bitcoin mining market is now done by custom ASICs.

yawn (2)

jds91md (2439128) | about a year and a half ago | (#43423795)

Bitcoin? Really? I thought news is information that someone cares about. 10 years from now people will chuckle or roll their eyes at the thought of Bitcoin. In 20 years, people will go "huh?" --JSt

Re:yawn (0)

Anonymous Coward | about a year and a half ago | (#43424483)

If you're so confident, why not short bitcoin?

Re:yawn (1)

maeka (518272) | about a year and a half ago | (#43425417)

If you're so confident, why not short bitcoin?

For someone to short there has to not only be a robust market, but also a person (or people) taking equal and opposite long positions you can borrow from.

Do any of the trusted and established exchanges offer shorts?

Re:yawn (1)

gatfirls (1315141) | about a year and a half ago | (#43426687)

"trusted and established exchanges", you're a funny guy. The best you'll get is " > 1 month old, hasn't been hacked or down today, and is slightly less shady than others". I love the response to it being a speculative bubble is "well if you are so sure Mr. Smarty Pants why don't you take a short position and be part of the speculative bubble" without a hint of irony. It's also pretty funny that most of these people think they are doing something new or original because the underlying object is made by computers.

Minecraft add-on (0)

Anonymous Coward | about a year and a half ago | (#43424121)

They need to make a minecraft add in that allows you to mine bitcoins in game, so you can actually have a job mining bitcoins...

I wonder what the OSHA rules on Creepers would be....???

TFA: Only 5XXX & 6XXX cards with lower perform (0)

Anonymous Coward | about a year and a half ago | (#43424957)

1. Lower performance than proprietary drivers? No miner in their right mind will use this OpenCL mod.

2. FPGA and ASICs are quickly relegating GPU mining to the scrapheap.

3. Fuck bitcoin.

4. That is all.

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