Some pondering: I've been thinking about the recent super-bull market in BTC. Let's assume for a moment that BTC goes to $1000. That would mean with around 10M BTC issued, the Bitcoin economy would be the $10B in size. That is a very sizeable and noticeable event that governments would likely start to take notice and act, similar to Wikileaks, Piratebay, etc. Remember, Bitcoins compete directly against central banks' monopoly as a currency issuer, which is the most powerful financial tool all governments use manipulate their fiat currency and economies. Any major governmental reaction and the resulting negative publicity and loss of confidence would likely knock back the price of BTC significantly. Therefore it is unlikely under the present governmental and financial conditions that we'll ever see BTC at $1000, or at least not for long. It is much more likely that the for either dying lack of interest in Bitcoin or way too much of the wrong interest the price of BTC will hover a bit above the marginal cost to mine BTC at best. So what is the marginal cost of mining Bitcoin? At 50BTC per block mined it was estimated to be $3-4 about 6 months ago, depending on the local electricity costs of running GPUs. The difficulty has increased by about 30%, and the rate of Bitcoin mining will halve to 25BTC/block in about November 2012. I don't think fees make up any significant amount of mining profits, yet. The major destabilising unknown is the marginal cost of mining using FPGAs. It would be very interesting to determine the ratio of GPU to FPGA miners. Let's however assume the worst case GPU costing, and we get a marginal cost of around $8 to mine a BTC. This doesn't include the capital costs of buying, maintaining, and housing the GPUs or FPGAs. It looks like people are paying a 50% premium at the current price of $12/BTC. Your thoughts? Gary -- -- Zero State mailing list: http://groups.google.com/group/DoctrineZero ----- End forwarded message ----- -- Eugen* Leitl <a href="http://leitl.org">leitl</a> http://leitl.org ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.ativel.com http://postbiota.org 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE