Crypto mining, good, bad, or just another gamble?

[marvinsc]

Here is Western Kentucky we have cheaper electricity than many other areas which it appears has made this area desirable to set up Crypto Mining operations. There are at least two in the County I know of, nondescript buildings with a lot of power input and large cooling fans. These compounds are surrounded by 8 foot fences with razor wire on top and no signs or addresses visable. I don't understand Crypto but I know where big $$ can be made, big $ can be lost.

[Cipher]

Crypto is a scam its elaborate but it may just be the essence of greedy people showing the world what bastards the super rich are.
its used by criminals. It purports to make money from nothing. I can barely recall Das Kapital but even Marx insisted money was at least a symbolic value of work.
If the oracle of Omaha eschews it you'd do well to follow his example.
the waste of resources in crypto mining name open pits and tar ponds look good.

[LAB3]

Crypto isn't any more or less a scam than any other Fiat monetary system. It's biggest drawback is the energy required to provide the "proof of work" required to earn the currency (mining)

Miners are in effect the ones who validate the transactions that happen on the network, this is the "work" they're performing instead of a centralized entity such as a bank. In order to get past the huge amounts of computing power needed to perform the "work" the next generation crypto could be based on a "proof of stake" concept.

Instead of solving a complex mathematical formula in order to validate a transfer "Miners" could put up some of their own crypto currency as a third party in something similar to an escrow account to "back up" the transfer of crypto funds between two separate entities while validating their transaction. Under that scenario about 0.5% of the current amount of energy would be required to "mine" new currency while still keeping the transfer decentralized.

Here's an article that goes into a bit more detail.

https://www.investopedia.com/terms/p/proof-stake-pos.asp

[Suzukian]

Crypto is a Ledger system no different from "Private Money" used in the old days. Crypto ultimately relies on a person(people), the one(s) on top of the Pyramid Scheme.

[LAB3]

Crypto is a Ledger system no different from "Private Money" used in the old days. Crypto ultimately relies on a person(people), the one(s) on top of the Pyramid Scheme.

The idea behind it is that nobody is at the top of the pyramid but just as with money whoever has the most can hold more influence.

[Suzukian]

And how has that worked out so far? I understand all about the keys, and the theory, but I've written code for a long time. I can tell you and you probably know that Casinos never lose a dime. They make usually a guaranteed 30% right of the top. A little bit apples to oranges, but Crypto is even easy to bilk people out of their money, nobody's watching, except the guy taking your money. Or did everything that just happened with Crypto didn't?

[Dogma]

Lots of misinformation out there about crypto, and a lot of bad people out there putting good money into bad projects. Well over 10000 different crypto projects and only a handful will ever amount to anything. Sorta like Internet tech companies were in the 90's. The serious projects have a chance of replacing or at least seriously modifying how finance is done. The banking system is ripe for more modern tech. But it's more than that, too. Anybody who wants to get involved with crypto should go very slowly. It's the wild West out there right now, but if you can navigate that, there's opportunity. Lots of opportunity to lose too.

[LAB3]

My son got in early and bought a Bitcoin mining rig, he racked up quite a few coins and sold the rig about eight yrs ago once everyone and their brother got into mining. For a couple of years worth of electricity use he did pretty well with it but as stated above, you gotta be savvy about it!

[Vmass]

My son got in early and bought a Bitcoin mining rig, he racked up quite a few coins and sold the rig about eight yrs ago once everyone and their brother got into mining. For a couple of years worth of electricity use he did pretty well with it but as stated above, you gotta be savvy about it!

There is still some time to make money with mining. However, I believe it is becoming harder as the halving gets closer to 0. I read an article that stated the next halving will bring the block payout down to 3 bitcoins. When that happens, the miners will start to chase fees.

Wait a minute, isn't a big part of bitcoin usage to avoid the middle man fees? So, when all bitcoin has been mined, will there be any value to owning bitcoin as the fee structure will surely need to be raised?

It is risky business, for sure. But if you want to play, it seems that buying shortly before halving occurs is the preferred timing. Next one is looking like May of 2024. BUT, with the next halving bringing the fee to 3 coins, will bitcoin see the bump as it has in previous halvings????

[LAB3]

I'm not really "up' on how a transaction is verified under a fee based system or how that would work, it's the open ledger aspect that intrigues me!

Everyone gets uptight over the privacy aspect of that, they don't want their wife, boss etc to know how much they're spending on liquor and hookers. The upside to that is being in a better position of being able to hold corporations, money managers etc accountable for their actions which is something that absolutely needs to be addressed.

As to having, that may have been part of the reason he got out. At that time he figured he was spending about $30 a month on electricity to run the miner and was being offered $400 per coin which put him at about the break even point. He sold the mining rig for more than what he paid for it since there was a several month backlog on getting a new one.

[Dogma]

will bitcoin see the bump as it has in previous halvings????

That's a good question. Its never been so closely correlated with other markets, and the world economy is undergoing huge changes and nations are having trouble with monetary policy and central banks are rushing toward CBDCs and there could be competing reserve currencies because fiat was weaponized a long time ago and world powers are realigning and...., so it's just about impossible to guess how things are going to go a year or two from now. You need a longer time horizon on any analysis to make a decision, I think. If we can all survive the next few years...

[Rob S.]

Anyone see the (6 part?) show The Anarchists? New age hippies want to live 'off the grid' in Mexico, all funded by crypto. Sad, but interesting.

[salty_monk]

Too late... the time to mine coin was 10 years+ ago before the big mining operations got involved. Back then you had to be pretty computer savvy to work out how to do it. I used to have an office with a back room with "free" electricity back then... 20/20 hindsight & all that.
It certainly isn't very green hence the new proof of stake... there is also one that uses radio transmissions as "proof of work" which is meant as a low bandwidth network for things like parking meters etc. Lots of ideas out there but nothing particularly safe (look at how the exchanges were being run!)