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Proper Bitcoin mining.....

How to buy, profit and invest in crypto currencies or NFTs
murraypaul
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Re: Proper Bitcoin mining.....

#521306

Postby murraypaul » August 10th, 2022, 11:13 am

Urbandreamer wrote:We have a different opinion about the future.... but the present, I can't dispute your points.


I've been waiting for that future since ~2012/2013. Still waiting. In the meantime, payment systems have moved on. You can buy things by just waving your phone at a machine. Which is sort of what Bitcoin enthusiasts then were arguing for. It just didn't need the Bitcoin bit.

Then there is the debasement of our currency. I think that we are all aware that there are tough times ahead. I personally think that the money printer will be turned on in an attempt to ease the pain. Isn't that a "first world" issue and are not most printing money (or using QE)?


But that is an argument for using it as a commodity/store of wealth, not as a currency. That is a different argument, and up to this point, taking a long view Bitcoin has been a good investment.

murraypaul
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Re: Proper Bitcoin mining.....

#521308

Postby murraypaul » August 10th, 2022, 11:14 am

Mike4 wrote:Similarly the only way to spend BC in a shop that only accepts Sterling is to use an equivalent arm's length currency exchange translating service, which Lightning would appear to be. Is that right?


If the shop only accepts sterling, you couldn't use Lightning. (Although you could use a Bitcoin-backed debit or credit card.)

The shop would have to specifically accept Lightning payments.

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Re: Proper Bitcoin mining.....

#521421

Postby Urbandreamer » August 10th, 2022, 5:16 pm

murraypaul wrote:
Urbandreamer wrote:This might come across as trying to score points, but it really isn't.

You are clearly very pro-Bitcoin, and even you haven't actually used it as a currency.


Ok, I just bought a ebook using bitcoin. It was painless, but not instant. This is because the payment was on-chain.
If you have a small amount, here is a link to the book. In £'s it cost me £1.67.

https://shrypto.com/product/how-to-not- ... m=referral

murraypaul
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Re: Proper Bitcoin mining.....

#521528

Postby murraypaul » August 11th, 2022, 8:52 am

Urbandreamer wrote:Ok, I just bought a ebook using bitcoin. It was painless, but not instant. This is because the payment was on-chain.
If you have a small amount, here is a link to the book. In £'s it cost me £1.67.


How much was the transaction fee?

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Re: Proper Bitcoin mining.....

#521534

Postby Mike4 » August 11th, 2022, 9:30 am

murraypaul wrote:
Urbandreamer wrote:Ok, I just bought a ebook using bitcoin. It was painless, but not instant. This is because the payment was on-chain.
If you have a small amount, here is a link to the book. In £'s it cost me £1.67.


How much was the transaction fee?



You have to pay a fee in order to pay for something with bitcoin?

That alone kills it as a currency, Id suggest. Visa etc figured out really early that people would not use the service if they had to pay a fee to conduct a transaction.

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Re: Proper Bitcoin mining.....

#521585

Postby Urbandreamer » August 11th, 2022, 11:19 am

Mike4 wrote:
murraypaul wrote:
Urbandreamer wrote:Ok, I just bought a ebook using bitcoin. It was painless, but not instant. This is because the payment was on-chain.
If you have a small amount, here is a link to the book. In £'s it cost me £1.67.


How much was the transaction fee?



You have to pay a fee in order to pay for something with bitcoin?

That alone kills it as a currency, Id suggest. Visa etc figured out really early that people would not use the service if they had to pay a fee to conduct a transaction.


There is a transaction fee. That's why there is a network at all. It's also true of the likes of Visa, and usually even when you withdraw cash from your current account via a ATM. In those cases, you as a user don't see the fee. Instead it is paid by someone else, ie the vendor or your bank (who must get the money from it's customers somehow). Fee's to Visa were recently topical, with Amazon stating that they were going to refuse Visa payments, until Visa reduced the fee.
https://www.bbc.co.uk/news/business-60022166

How much is the fee? Well it depends

Lightning transactions are usually a couple of Sat's, less than 1p. On-chain transactions are usually significantly more expensive. How much depends upon congestion, and to some extent how much you want to pay*. The fees are actually specified in bitcoin.

The wallet that I used "Muun" hid all the complicated stuff, but it cost me a relatively expensive 3121 Sats (61p) to spend 8500 Sats (£1.66).

However I have made other transactions (moved bitcoin or entered it into the whirlpool).
I paid 275 Sat's to transfer 105577 Sats into Whirlpool. I didn't do it today, but if I had that's paying 6p of the £21.17 transferred or 0.26%. For comparison google claims that Visa charges 0.25% though unlike bitcoin, fees are capped in the EU.

So, it's more a case of "who pays" rather than is there a cost. Indeed it can be argued that it's the poor mugs who pay in cash that are overcharged as the vendor must increase the prices for all so that they don't lose money on Visa transactions.

*This is hidden from most users of bitcoin but you can specify a fee rate. As the number of transactions per block is limited, low fee transactions are dropped if they are out competed. Hence if you want to get a transaction through in a given time, you can boost what you are willing to pay. Ie I also paid 3404 Sat's to receive 20743, a very expensive fee that I was willing to pay to prove that I understood the process.

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Re: Proper Bitcoin mining.....

#521646

Postby Mike4 » August 11th, 2022, 1:53 pm

Urbandreamer wrote:
Mike4 wrote:
murraypaul wrote:
Urbandreamer wrote:Ok, I just bought a ebook using bitcoin. It was painless, but not instant. This is because the payment was on-chain.
If you have a small amount, here is a link to the book. In £'s it cost me £1.67.


How much was the transaction fee?



You have to pay a fee in order to pay for something with bitcoin?

That alone kills it as a currency, Id suggest. Visa etc figured out really early that people would not use the service if they had to pay a fee to conduct a transaction.


There is a transaction fee. That's why there is a network at all. It's also true of the likes of Visa, and usually even when you withdraw cash from your current account via a ATM. In those cases, you as a user don't see the fee. Instead it is paid by someone else, ie the vendor or your bank (who must get the money from it's customers somehow). Fee's to Visa were recently topical, with Amazon stating that they were going to refuse Visa payments, until Visa reduced the fee.
https://www.bbc.co.uk/news/business-60022166

How much is the fee? Well it depends

Lightning transactions are usually a couple of Sat's, less than 1p. On-chain transactions are usually significantly more expensive. How much depends upon congestion, and to some extent how much you want to pay*. The fees are actually specified in bitcoin.

The wallet that I used "Muun" hid all the complicated stuff, but it cost me a relatively expensive 3121 Sats (61p) to spend 8500 Sats (£1.66).

However I have made other transactions (moved bitcoin or entered it into the whirlpool).
I paid 275 Sat's to transfer 105577 Sats into Whirlpool. I didn't do it today, but if I had that's paying 6p of the £21.17 transferred or 0.26%. For comparison google claims that Visa charges 0.25% though unlike bitcoin, fees are capped in the EU.

So, it's more a case of "who pays" rather than is there a cost. Indeed it can be argued that it's the poor mugs who pay in cash that are overcharged as the vendor must increase the prices for all so that they don't lose money on Visa transactions.

*This is hidden from most users of bitcoin but you can specify a fee rate. As the number of transactions per block is limited, low fee transactions are dropped if they are out competed. Hence if you want to get a transaction through in a given time, you can boost what you are willing to pay. Ie I also paid 3404 Sat's to receive 20743, a very expensive fee that I was willing to pay to prove that I understood the process.



I am a card merchant retailer myself so I get to know quite a lot about the fees.

My point was not that *no-one" has to pay a separately identifiable Visa transaction fee when they buy something and use Visa to pay. Yes the fee is buried in the overheads of the business but few corner shops would give a discount for cash over Visa. I certainly don't.

If the average spod gets a separate additional bill for spending their BC, he or she will pretty quickly revert to using Visa I predict. I certainly would.

(Edit to get the terminology right.)

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Re: Proper Bitcoin mining.....

#521704

Postby Urbandreamer » August 11th, 2022, 5:17 pm

Mike4 wrote:Yes the fee is buried in the overheads of the business but few corner shops would give a discount for cash over Visa. I certainly don't.


I'm not a lawyer, but would hesitate to defend such an action. It certainly would be illegal in the UK to charge more for Visa, so any defence would have to be based on the difference between "discount" and "surcharge".
https://assets.publishing.service.gov.u ... update.pdf

Since it's not the merchant who charges for the cost of paying in bitcoin, the regulations wouldn't apply.

Of course merchants are not required to accept Visa any more than bitcoin. They do so because not doing so would reduce their turnover. More so with Visa than bitcoin.

While we are on the subject of transactions, how many remember concerns over using the likes of Visa for online purchases 20 or so years ago? Concerns about giving someone behind a glass screen your account details. That doesn't happen if you keep your own crypto keys. When you transact, all that is exposed is the transaction between two parties. Neither party can use any information provided to access any "account".

Moving to the present day, no need for 2 factor authentication, if you hold your own keys. Possibly purely a technical point as you both need internet access, however you don't need the ability to receive a SMS. My bank demands I receive a SMS and offers no other alternative. Others offer card reader authentications and it's possible that some allow the use of Google, Microsoft authenticator or YubiKey but I don't know of them.

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Re: Proper Bitcoin mining.....

#522489

Postby 1nvest » August 15th, 2022, 3:14 am

When you see the expanse of some mining farms, along with all the cooling that involves, and scale that around the world - little wonder we've had a hot summer (global warming).

The larger farms grew exponentially by reinvesting chunks of what they earned/mined into expanding their mines (hardware). Bitmain for example has row after row of warehouses filled floor to ceiling with hardware. Earned $4 billion in 2017 of which large amounts were reinvested back into additional hardware.

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Re: Proper Bitcoin mining.....

#522502

Postby GoSeigen » August 15th, 2022, 7:32 am

Mike4 wrote:
I am a card merchant retailer myself so I get to know quite a lot about the fees.

My point was not that *no-one" has to pay a separately identifiable Visa transaction fee when they buy something and use Visa to pay. Yes the fee is buried in the overheads of the business but few corner shops would give a discount for cash over Visa. I certainly don't.

If the average spod gets a separate additional bill for spending their BC, he or she will pretty quickly revert to using Visa I predict. I certainly would.

(Edit to get the terminology right.)


Fees are far down the list of problems, though excessive/more than alternatives. This discussion is missing the key issues spectacularly.

There are three fundamental and insurmountable problems with bitcoin for it to ever replace existing (non-trustless) currencies in everyday transactions:
1. Transactions take far too long to clear.
2. Impossible to meet required transaction volume.
3. Outrageously inefficient in terms of energy use.

Thus bitcoin will only if ever be of use for large, infrequent transactions. It will NEVER fulfil the fantasy of replacing so-called fiat currencies.

GS


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