Is it time to throw in the towel?

[InternationalHat]

GPU miners will always put their hash to work somewhere, and provided with that demand, the market will always supply them a means to do it.

I'm not sure I follow. The market must demand the supply of GPU-mining "work" as I understand it not the other way around. This holds true even if that demand presents itself in the form of future speculation of value. If that value does not translate - especially with current coins, you won't be able to just always mine with a GPU and exchange the proceeds for a profit.

 

[Digital Viper-X-]

I'm not sure I follow. The market must demand the supply of GPU-mining "work" as I understand it not the other way around. This holds true even if that demand presents itself in the form of future speculation of value. If that value does not translate - especially with current coins, you won't be able to just always mine with a GPU and exchange the proceeds for a profit.

I think what he means is new algorithms will show up that can utilize GPUs, they actually have already.

Scrypt-N is a popular one right now. (You cannot mine this on current or the next gen of Scrypt Asics)

 

[Carbon_Rod]

I think what he means is new algorithms will show up that can utilize GPUs, they actually have already.

Scrypt-N is a popular one right now. (You cannot mine this on current or the next gen of Scrypt Asics)

But InternationalHat's argument still holds water with the proliferation of coins using new algorithms. You can create all of the Scrypt-N coins you want, but if the market doesn't recognize any of them as being valuable, then GPU miners are still faced with the same issue... what to mine that will provide enough revenue to overcome the costs of power and still provide profit over and above that will make it worthwhile GPU mining in the first place.

 

[Spidey329]

I think what he means is new algorithms will show up that can utilize GPUs, they actually have already.

Scrypt-N is a popular one right now. (You cannot mine this on current or the next gen of Scrypt Asics)

I think Vertcoin might be the best bet. I've read that the developers said that as soon as ASICs come out, they'll hard-fork it to make it resistant again.

 

[LZ_Xray]

I'm not sure I follow. The market must demand the supply of GPU-mining "work" as I understand it not the other way around

Man this is going to be a really shitty wall of text because I really have nothing better to do right now. So here goes nothin




It really doesn't. A market can be created from either end, supply or demand. We're just very used to thinking only from the demand side when we're in fact surrounded by examples of markets being created by supply.

The current altcoin market was created by the supply of unused GPU mining power (booted out of the game by SHA-256 asics) in addition to the desire on the part of the miners to use it. Miners want to mine. After a coin was created that gave miners a way to use what we already had, we gave the coin value by our work on it and desire to keep working on it. There is no reason in the world to think that this will not continue until some outside force stops it.

The market definition of the "Value" of something is basically what goods or services others in that market will exchange for it.

Bitcoin: The only coin The World values in and of itself is BTC itself. Even that's still shaky. Altcoins have value only relative to BTC. Some altcoins can be exchanged directly for fiat, but if you watch, their fiat value is still dictated only in relation to BTC. If BTC itself for some reason just went away the huge majority, if not all, of the value of the rest of the crypto market would go with it. In other words, BTC itself is the only coin that has life unto itself.

The World has placed some value on Bitcoin "external to the crypto system" by its willingness to trade you a house or a Tesla for Bitcoin. If you try to trade Dogecoin for a house or a Tesla, The World will say "Sure! How many Bitcoin is a Dogecoin worth?"

If you mine any coin by any means... You are always mining Bitcoin.

Altcoins: Altcoins have value only as "work" within the crypto system. They don't have any value unto themselves like Bitcoin does, but that's not saying they don't have value. The difference is they have value to "us", the miners. They have value because of the services we the miners are willing to trade for it (GPU work). That gives them value relative to Bitcoin, so we can exchange them for Bitcoin, which we can then exchange for houses and Teslas.

Miners have created value for altcoins "internal to the crypto system" by our willingness to trade our work for them. In some strange future when no one wants to mine with GPUs or mine non-asic algos anymore, then altcoins will cease to have value and everyone will just mine Bitcoin.

 

[_r2h]

I think a lot forget that this market is extremely speculative. Sometimes it's wildly profitable and sometimes you just barely pay the bills. Been this way in speculative markets for a long time.

 

[InternationalHat]

Man this is going to be a really shitty wall of text because I really have nothing better to do right now. So here goes nothin




It really doesn't. A market can be created from either end, supply or demand. We're just very used to thinking only from the demand side when we're in fact surrounded by examples of markets being created by supply.

The current altcoin market was created by the supply of unused GPU mining power (booted out of the game by SHA-256 asics) in addition to the desire on the part of the miners to use it. Miners want to mine. After a coin was created that gave miners a way to use what we already had, we gave the coin value by our work on it and desire to keep working on it. There is no reason in the world to think that this will not continue until some outside force stops it.

The market definition of the "Value" of something is basically what goods or services others in that market will exchange for it.

Bitcoin: The only coin The World values in and of itself is BTC itself. Even that's still shaky. Altcoins have value only relative to BTC. Some altcoins can be exchanged directly for fiat, but if you watch, their fiat value is still dictated only in relation to BTC. If BTC itself for some reason just went away the huge majority, if not all, of the value of the rest of the crypto market would go with it. In other words, BTC itself is the only coin that has life unto itself.

The World has placed some value on Bitcoin "external to the crypto system" by its willingness to trade you a house or a Tesla for Bitcoin. If you try to trade Dogecoin for a house or a Tesla, The World will say "Sure! How many Bitcoin is a Dogecoin worth?"

If you mine any coin by any means... You are always mining Bitcoin.

Altcoins: Altcoins have value only as "work" within the crypto system. They don't have any value unto themselves like Bitcoin does, but that's not saying they don't have value. The difference is they have value to "us", the miners. They have value because of the services we the miners are willing to trade for it (GPU work). That gives them value relative to Bitcoin, so we can exchange them for Bitcoin, which we can then exchange for houses and Teslas.

Miners have created value for altcoins "internal to the crypto system" by our willingness to trade our work for them. In some strange future when no one wants to mine with GPUs or mine non-asic algos anymore, then altcoins will cease to have value and everyone will just mine Bitcoin.

I wasn't disputing that supply can help to create a market. It still requires demand. Without that, supply is meaningless. Where that demand come from is equally important from a fundamental standpoint if you're investing/trading depending on the term of your position.

However, I'm most interested in the psychological reasoning for the relevant actors who believe that future GPU-mined altcoins present a real opportunity for profit or more importantly investment over the long-term into the future. These are the people providing at least partial demand for that supply. You provided some explanation of that so thanks.

My point above was more that further increasing the supply of altcoins without ensuring broad-based and resilient demand is not a strong recipe for anything other than pump and dump type behavior. I believe, maybe wrongly? people are aware of that at this point. For instance - you yourself would likely admit that you wouldn't want to hold a long position in something where you expect a need for yourself and anyone like you to basically stop using it at some point in the near future, right? Many of these altcoins have no use other than as an intermediary trade medium. When the actors using it move on to another coin out of belief that their GPU mining ought to have value, demand must fall for the first coin (the moving-from coin). This action alone should destroy most speculative demand as hold behavior would be discouraged - which is something that had propped up some of the altcoins for a bit. It has done so to a reasonable extent, but much less than I believe rational with the information at hand. Even hedging risk vs reward, there is enough information available to show that most of these altcoins do not have the make-up to be anything other than a copy - IE they don't provide substantial expectation of value to non-miners vs BTC.

Bitcoin/altcoin has provided an almost academic environment for studying market psychology which is pretty cool. It's been interesting to watch.

 

[MacLeod]

So is bitcoin or whatever it's called now already over.......again? So it's all the rage and everybody is gonna get rich and it drives up the price of AMD cards sky high for like a month then the bottom drops out then about 2 years later it's all the rage and everybody is gonna get rich and it drives the price of AMD cards sky high and now the bottom is dropping out? I'm shocked.

 

[_r2h]

So is bitcoin or whatever it's called now already over.......again? So it's all the rage and everybody is gonna get rich and it drives up the price of AMD cards sky high for like a month then the bottom drops out then about 2 years later it's all the rage and everybody is gonna get rich and it drives the price of AMD cards sky high and now the bottom is dropping out? I'm shocked.

Speculative market. Supply and demand. Nothing about what is happening is shocking to anyone, except the ignorant.

 

[LZ_Xray]

I wasn't disputing that supply can help to create a market. It still requires demand. Without that, supply is meaningless.

Agreed. Any market always requires both in the end. The distinction is only between which provides the stimulus to create the market.

However, I'm most interested in the psychological reasoning for the relevant actors who believe that future GPU-mined altcoins present a real opportunity for profit or more importantly investment over the long-term into the future. These are the people providing at least partial demand for that supply. You provided some explanation of that so thanks.

My point above was more that further increasing the supply of altcoins without ensuring broad-based and resilient demand is not a strong recipe for anything other than pump and dump type behavior. I believe, maybe wrongly? people are aware of that at this point. For instance - you yourself would likely admit that you wouldn't want to hold a long position in something where you expect a need for yourself and anyone like you to basically stop using it at some point in the near future, right? Many of these altcoins have no use other than as an intermediary trade medium. When the actors using it move on to another coin out of belief that their GPU mining ought to have value, demand must fall for the first coin (the moving-from coin). This action alone should destroy most speculative demand as hold behavior would be discouraged - which is something that had propped up some of the altcoins for a bit. It has done so to a reasonable extent, but much less than I believe rational with the information at hand. Even hedging risk vs reward, there is enough information available to show that most of these altcoins do not have the make-up to be anything other than a copy - IE they don't provide substantial expectation of value to non-miners vs BTC.

Bitcoin/altcoin has provided an almost academic environment for studying market psychology which is pretty cool. It's been interesting to watch.

All correct to the letter IMO. With infinite divisibility, portability, and renormalization (the Satoshi, mBTC etc.) there's no reason to have a currency other than BTC. I don't think altcoins bring anything to the external market, which is showing it by providing zero demand for one, but they bring a lot to the internal miners. I also believe most miners view altcoins as just profit vehicles rather than anything with a lot of traction, but I think altcoins will always be around to serve that purpose. Internally, their broad and resilient demand is thousands of geeks with powerful GPUs that probably know more about the nuts and bolts of cryptomining than anyone else.

The above may sound bad to a lot of people but there's many many examples of this internal/external market behavior all over the place and it's perfectly healthy.

 

[LZ_Xray]

So is bitcoin or whatever it's called now already over.......again? So it's all the rage and everybody is gonna get rich and it drives up the price of AMD cards sky high for like a month then the bottom drops out then about 2 years later it's all the rage and everybody is gonna get rich and it drives the price of AMD cards sky high and now the bottom is dropping out? I'm shocked.

Sounds just like... every other economy on Earth right?