I'd sell this to you, but you would not like the price. The implied volatility (a major factor in options pricing) is through the roof. 6 month volatility cannot be compared to any other asset.

So for example, if you wanted a Put for 1000 btc at 9$ strike price for 12 months, it would likely cost you 7000$. That is, the only way to profit on the trade is for the price of bitcoins to be below 2$/btc,

Even a far out of the money strike, like a $3 strike put, would likely cost you $1500 to cover 1000 btc, not leaving much roof for profit.

12 months is just too far out, considering the volatility, to make buying puts profitable unless you are sure it is going to 0.

The 3$ one is too high priced, the other one is pretty much what I assumed them to cost, a bit lower (closer to 5000$). And I want a European one.

too high priced? Put all the variables into an options calculator and it would price a $3 strike price put with 12 month expiration at around 2.50 ; keep in mind traditional option pricing uses a 6 month or 12 month implied volatility figure - which in the case of bitcoins is off the charts.

Pricing is obviously a bit tricky in this case. And I am not sure if you can use regular volatility figures in this case, because of the dynamic of it. It's either going big or it's (going home) busto.

Can you not do a short sell with someone with the option to give back at any given time? And just pay them interest? On MtGox you can set an over the odds buy order which wont be full filled until the price hits, which would act as insurance (IE, if they hit $20 you auto buy 1,000 worth). I'm not sure how safe this is with intelligent market manipulators though/and mtgox mechanics.

The problem with short selling is the unlimited downside. When the prices are rising and hit 30$ or w/e, I am ****ed. With options I am only out of the premium.

But on MtGox you can put an order in to buy @$20 I think, which will stay on the books until it's full filled, so you set your own maximum loss. It's not ideal though (a lot of risks still) but might be worth considering. You'd need to borrow BC under and arrangement of x% interest and you can give them back whenever you want though.

There would still be a difference, because I could get stopped out at 6M and at 12M we are at 0, so I lost when I would have won with options. I completely want to erase that risk, because I do think that the currency is a great idea, the execution is not optimal though.

I will look into it a little bit though.

Not optimal?

A buy order at 20 would get filled immediately. There are thousands of Bitcoins available for cheaper.

Here is an article that I saw on a Bitcoin investor. He has an interesting methodology to determine the potential value of Bitcoins; he has some obvious flaws in his analysis as Bitcoin will not become a 100% solution and there are enough problems with the conversion out of Bitcoins in the short term to make it difficult.

http://falkvinge.net/2011/05/29/why-...-into-bitcoin/

My observation is that it is really tempting for those that have made money in the run up to try to take profits and push the currency down.

The thing is, people who made money in the runoff only need to sell off a small portion to pay for their investment. Then they let the rest ride, since it will be worth $1000 in 2 weeks.

That article is one of the best examples of a Kool-Aid drinker I've ever seen. Notice he had absolutely NO negative things to say about it?

I wonder if he's just smart enough to get a position, pimp the hell out of it, then get out. Perhaps that's all it is.

did read half of this thread but still haven't figured out whether or not investing in mining-rigs is +ev.

are the golden mining-times already over?

If you have the equipment to use, and it's decent or you can get a decent video card for cheap, do it.

Buying a complete new system is not going to be a great investment unless the price goes way up. And in that case, you were better off just buying coins now rather than wasting time mining them.

guess what people would have told you 6M ago?

The answer will always be YES, but that only shows that it is impossible to say. You can probably still make bank here, but how much? No one knows.

spurious, i'd like to hear your reasoning why you believe bitcoin will be around $2 a year from now

I wonder how many econ/finance/cs professors are mining. They are in a very advantageous position in that many of them already have the computing power and even if they dont make any money they could still win by getting an interesting paper or two out of it.

Not really, CPU mining is dead. It's all about the GPU. Not sure if the computers they would have access to would be able to compete (I think the biggest supercomputer in the world was only capable of hashing at 1/4 the total network or so, and probably uses a TON of electricity).

I could see a paper with making an FPGA miner or something. Although I'm not sure it would be that interesting of a paper unless they did something truly unique.

Having access to a top line 20 node cluster or whatever that is already built seems like a big advantage. FLOPS--->GPU is just card based anyway, right? And profs could probably right a grant proposal for graphics cards.

Are actual mining operations much larger than what an academic computation based group has ?

Electricty was free in the computational lab I worked at. The university payed for it regardless of how much you used.

Most papers are uninteresting, so that isn't a big issue.

It takes less than 2 minutes out of my day to deposit checks into an ATM at a branch of one of my banks. I could do it faster in a deposit slot but I like the nifty little scan printout of the check along with a paper trail.

Surely it would take at least a bit of time for you to process incoming BTC?

You gotta go the bank, which I pretty much never do. I still have random 20-100 dollar checks lying around that I've never got around to depositing via a mix of laziness and forgetting. I've carried checks from friends for months and just handed them back for dinners/bar tabs when rather than making a trip to the bank.

chase and usaa let you deposit by taking a picture with your phone. boa/the rest are otw to this.

I have no idea what type of systems the academic computation groups have, but just to give you an idea, a top CPU gets about 20 MHash/s (Xeon X5355), while a top GPU gets 750MHash/s. Put 3 of those in one rig, and you have 2Ghash/s.

I don't know the exact details but the GPUs I guess have 4000 mini processors in them, and the AMD ones are set up very well for the types of operations needed for hashing, so they are really well suited for the job. I might be wrong on why they are so much better, but it's a significant difference.

There could be a good reason to order a bunch of cards and write a proposal but I just don't see it. It's something that a ton of people are doing, it's proven, its not unique, it's not complex. It's just brute force. Could I order a bunch of scissors and publish a paper on cutting my lawn with them?

But you have more experience so I'll yield to you if you have some idea that I can't think of.

There is no processing. It just shows up in my account. I give them my address, and I get the money. Now if I need to convert it to USD, sure, it takes time. And it certainly would be a bigger pain.

Humblebrag alert.