Is low-spec, affordable crypto mining dead?

[CPUboi]

Now, i started interesting in crypto mining 3/4 years ago, and in those years i was never able (mostly for lack of money) to hop on the money-making train that bitcoin,ethereum,litecoin etc. etc. seems to be. All of that because i couldn't afford to buy a multi-thousand dollars mining rig.The problem, in my opinion is that crypto was presented as the ultimate tool to democratize profit and money, but seeing the current situation doesn't really looks like it, quite the opposite in fact: the crypto mining game is dominated by few companies with massive warehouses full of ASICs and specialized mining hardware. For someone that knows at least the basics of how crypto works, this is bad for two main reasons: 1) with ultra powerful hardware, the difficulty of the algorithm goes up, preventing small scale miners (like me) to enter the market in the first place 2) The biggest concern of them all: centralization; crypto was seen as a revolution because it didn't have any central entity/bank/government to control it, but when a company practically owns a considerable portion of the network because its one of the few that has the capital to do so, can you really say that it is decentralized?

And yes, there are other cryptocurrency other than bitcoin, but the major ones (ETH,LTC) suffers from the same problem as bitcoin, just slightly less so. Don't even get me started on dogecoin.

In my book, something is "democratic" when the majority of the population can benefit from it (and not just the wealthy ones), maybe crypto has been such a tool for a long time, but not anymore, and will never be again. There are new projects, that try to limit that, by building ASIC (or even GPU) resistance in the algorithm like the Haven (xhv) projects, but even then, someone with one or two GPUs (like me) is still gonna have an advantage over someone with only an old laptop to their name.

 

I would like to ear you opinions on that.

 

[bellabichon]

I'm going to say yes, it is dead, at least for the time being. The most approachable way to get into crypto for the average person is to build a rig with a gaming GPU, and to mine during the off-hours, but that's not really possible with current GPU prices.

 

As for the more philosophical perspective, I think the spirit of decentralization is still there, but you're right about how much is owned by a few small companies. Plus, exchanges aren't undercutting eachother to have the lowest fees, it's pretty much just settled at a point where it's moderately screwing the consumer. Crypto's volatility is also a large barrier in exchanging it directly for goods, for obvious reasons. 

[CPUboi]

6 minutes ago, bellabichon said:

I'm going to say yes, it is dead, at least for the time being. The most approachable way to get into crypto for the average person is to build a rig with a gaming GPU, and to mine during the off-hours, but that's not really possible with current GPU prices.

 

As for the more philosophical perspective, I think the spirit of decentralization is still there, but you're right about how much is owned by a few small companies. Plus, exchanges aren't undercutting eachother to have the lowest fees, it's pretty much just settled at a point where it's moderately screwing the consumer. Crypto's volatility is also a large barrier in exchanging it directly for goods, for obvious reasons. 

yeah, i mean as i see it, crypto just became the new stock market: few have the possibility to try, even fewer succeed and lots lose their money/time

[Eigenvektor]

Surprise: Something that requires an upfront investment allows rich people to profit more than others, making them even richer.

 

31 minutes ago, CPUboi said:

There are new projects, that try to limit that, by building ASIC (or even GPU) resistance in the algorithm like the Haven (xhv) projects, but even then, someone with one or two GPUs (like me) is still gonna have an advantage over someone with only an old laptop to their name.

Not sure how that is supposed to help. Whatever hardware you need to mine, people who have more money will always be able to afford more of it than people who don't. Meaning they will always outrun others in the long run.

 

The more hardware you have, the faster you can mine. There was never anything built into this system that would somehow put people with less disposable income on an equal footing. So the idea that cryptocurrencies would somehow be beneficial to income equality has always been a weird one to me.

[CPUboi]

Just now, Eigenvektor said:

Surprise: Something that requires an upfront investment allows rich people to profit more than others, making them even richer.

I mean that was obvious duh. As for the part about crypto as a tool to reach income equality, it could have been like that, but i understand that's pretty utopian concept now, but the premise of bitcoin was exactly that. Of course, advancement in technology,free market and capitalism came and screw that up completely

[Eigenvektor]

Just now, CPUboi said:

[…] but i understand that's pretty utopian concept now, but the premise of bitcoin was exactly that.

That concept has always been utopian. If I need to invest money to get more money, whoever has more money to begin with has an advantage. I don't see anything in Bitcoin's design that could've prevented this. Yes, anyone can mine. Yes, there is no central "government". How does that prevent people with more resources from getting even more resources faster?

 

Just because someone says "X will lead to more equality" doesn't make it so, unless they specifically include measures to prevent it. Even then people will probably find ways around it.

[CPUboi]

9 minutes ago, Eigenvektor said:

Not sure how that is supposed to help. Whatever hardware you need to mine, people who have more money will always be able to afford more of it than people who don't. Meaning they will always outrun others in the long run.

that's true, but take a cpu-only coin for example. It's not economically efficient to buy a shitload of computers and put them mining. yes, multi-cpu motherboards exists, but the beefiest ones have 2 sockets and cost a fortune

[CPUboi]

1 minute ago, Eigenvektor said:

That concept has always been utopian. If I need to invest money to get more money, whoever has more money to begin with has an advantage. I don't see anything in Bitcoin's design that could've prevented this. Yes, anyone can mine. Yes, there is no central "government". How does that prevent people with more resources from getting even more resources faster?

 

Just because someone says "X will lead to more equality" doesn't make it so, unless they specifically include measures to prevent it. Even then people will probably find ways around it.

ok, but take the very beginning of bitcoin: there was no gpu mining, ASICs didn't even existed back then, and you could mine even with the smelly ol' laptop you bought at a discount 2 years ago. Of course even back then a more powerful computer would have made more than the smelly ol' laptop, but the thing is, that everyone had the opportunity to mine bitcoin. nakamoto of course, couldn't have predicted what was going to happen in the coming years.

[Eigenvektor]

11 minutes ago, CPUboi said:

that's true, but take a cpu-only coin for example. It's not economically efficient to buy a shitload of computers and put them mining. yes, multi-cpu motherboards exists, but the beefiest ones have 2 sockets and cost a fortune

Of curse it does.

 

If the cost of one system and the money needed to keep it running leads to profit some time in the future, then two systems will lead to 2 ✕ profit in the future. So it absolutely makes sense to buy more of it, if you can afford it.

 

5 minutes ago, CPUboi said:

ok, but take the very beginning of bitcoin: there was no gpu mining, ASICs didn't even existed back then, and you could mine even with the smelly ol' laptop you bought at a discount 2 years ago. Of course even back then a more powerful computer would have made more than the smelly ol' laptop, but the thing is, that everyone had the opportunity to mine bitcoin. nakamoto of course, couldn't have predicted what was going to happen in the coming years.

It doesn't matter whether you mine with CPUs, GPUs, ASICs or pocket calculators. Whoever is able to throw more resources at it reaps more profits. Those profits can be reinvested to throw even more resources at it, making you even faster.

 

I don't think the inventor of Bitcoin could've been blind to the problem that "faster machine = more profits" inevitable leads to a race where people who start out in a leading position will continue to be in the lead.

[CPUboi]

what i was trying to say, is that nobody in their right mind would invest heavily in something that is not worth anything (and probably never will). the people you are talking about, that would have enough money to spend on something like this, simply will not do it for the simple fact that there are better options that are going to make you richer virtually instantly. Also, when the hardware is not profitable anymore is far easier to sell a GPU in the used market than a whole system, that probably isn't good for anything anymore.

[tikker]

1 hour ago, CPUboi said:

1) with ultra powerful hardware, the difficulty of the algorithm goes up, preventing small scale miners (like me) to enter the market in the first place

That's an intended effect of the algorithm's regulation. BTC and ETH aim for a specific number of blocks within a specific amount of time, so difficulty will scale with the total hashpower. It is what it is. Stocks have the exact same problem. I can't buy Amazon stock because my brokers don't allow fractional shares and I don't have $3000 to drop on one. If you can't mine, just buy the crypto directly.

1 hour ago, CPUboi said:

2) The biggest concern of them all: centralization; crypto was seen as a revolution because it didn't have any central entity/bank/government to control it, but when a company practically owns a considerable portion of the network because its one of the few that has the capital to do so, can you really say that it is decentralized?

Yes, because in a proof of work blockchain you can have 90% of the coins for all that matters and still have no influence. Crypto is decentralised with regards to those who verify transactions, not where the money is. Coins where the developer owns most of the coins are already "looked down on" a little and if large fractions in general end up locked up, then money won't flow and you'll either just get a store of value or the coin tanks because it isn't being used.

1 hour ago, CPUboi said:

I mean that was obvious duh. As for the part about crypto as a tool to reach income equality, it could have been like that, but i understand that's pretty utopian concept now, but the premise of bitcoin was exactly that. Of course, advancement in technology,free market and capitalism came and screw that up completely

Where did you get this from? I'm not aware that Bitcoin's premise ever was income equality at all. It was a decentralised solution to the double spending problem. It's aim was to be able to securely do transactions without having to trust a central entity.

1 hour ago, Eigenvektor said:

I don't think the inventor of Bitcoin could've been blind to the problem that "faster machine = more profits" inevitable leads to a race where people who start out in a leading position will continue to be in the lead.

I don't think you can get around this with any proof of work scheme like Bitcoin. You work more, you get paid more. Can't say real life is any different in that regard.

1 hour ago, CPUboi said:

what i was trying to say, is that nobody in their right mind would invest heavily in something that is not worth anything (and probably never will). the people you are talking about, that would have enough money to spend on something like this, simply will not do it for the simple fact that there are better options that are going to make you richer virtually instantly. Also, when the hardware is not profitable anymore is far easier to sell a GPU in the used market than a whole system, that probably isn't good for anything anymore.

Ah here it is, the hidden underlying doubt towards crypto Welcome to speculative investing. Whether it is stocks or crypto you are basically gambling and hoping the company/coin will do well. Crytpo is still very young and can be extremely volatile due to that and other reasons. It's a very risky investment and therefore you should never invest (in general) money you cannot afford to lose. It's a simple game really. Buy hardware for $X, make $Y per day, start turning profit in Z days if current trends continue. Are you willing to risk that? That's the only question you need to answer yourself.

 

Crypto is not a get rich quick scheme, nor is anything else. No investment will make you rich instantly and anyone who can put in more capital will get more returns. Sure, you can get that 1-in-a-million lucky and have decent capital in an alt or sleeping stock that goes x10 or x100, but that's very rare nowadays.

 

Bitcoin mining has been infeasible without ASICs for a long time now. However, anything down to 1000 series Nvidia cards, for example, can still mine ETH profitably in the current market so I disagree that you need "ultra powerful" hardware to mine.

[Eigenvektor]

2 hours ago, CPUboi said:

what i was trying to say, is that nobody in their right mind would invest heavily in something that is not worth anything (and probably never will).

Sure, it makes no sense to invest in something that isn't worth anything. Neither for rich people nor for poor people. But the whole point of cryptocurrencies is to be worth something. In fact Bitcoin was designed to be deflationary from the get go, meaning it was always meant to increase in value (Which incidentally makes it bad as a currency and good as an asset).

 

If you manage to design a coin that isn't worth anything and doesn't increase in value, rich people probably aren't going to invest in it. But then, why would anyone? It has to be worth something (if you manage to design a currency that is worth something and completely stable, you have a good job waiting for you).

 

If you create a (virtual) currency that works like a FIAT currency and people can essentially "print their own" then everyone will rush to print more. If there was no hard limit (like for Bitcoin) you would end up with extreme inflation that would render it worthless pretty much immediately (which is why you're not allowed to print your own money).

 

If you design it to be deflationary then no one is going to spend it, creating exactly the effect you get with Bitcoin right now (hoarding). Which is why FIAT currencies are designed to be as stable as possibly, but still slightly deflationary to incentivize spending.

 

I see no way to design a currency that is rock stable, makes you richer, does not incentivize hoarding and also promotes equality.

[airborne spoon]

there is plenty of altcoins you can mine with shitty hardware. raven only needs a 3gb GPU to mine it and the diff is still real low and the profits are almost the same as ETH