Bitcoin Forum

Can someone explain...

Currently there are 144*25BTC mined each day, 3600 BTC.

The daily volume traded is far larger than that.

If a miner wants to sell his coins, he has to dump them at the current price even if he wants more - say because he spends more than that on his equipment.

There are many other users/non-miners also selling their coins. Drowning out the miner's coins in the 'ker-fuffle'..

How will the miners set the price floor, if other users are prepared to sell their coins for less ?

aren't miners simply selling on the market, i've read on here, that they don't like to deal with private user
miners can earn more if they sell on localbitcoin, you can see many there, that are selling above the market price
anyway i doubt they can dictate anything with that amount, the price is dictated by whales most of the time

Miners can not keep selling coin below cost of production indefinitely. To make money, your first task is to figure out which ASIC manufacture can produce ASIC miner the cheapest and buy up all the coins 20-30% below the current production cost.

This. When miners keep selling under costs of production they are just betting or hoping that the price will go up later. The thing is, when someone leaves because they can't find profit for a while, someone else will profit since as soon as a big player leaves the difficulty will go down. There's always someone out there that meet all the requirements to profit from mining.

This sounds like the miners are not setting the Price Floor.. ?

It sounds like the Price is setting the Miner's 'Expenditure Ceiling' ? (If that's how you say it..  :P)

Like the 'inverse' of what I thought.

Don't think that only miners' set the price floor, as there are many aspects which might put a "?" to your question itself because if it would have been just limited to them and if everyone would have dumped as you said because their equipments charge them a lot more than their earnings, then the current stability that we are seeing in the markets would have dropped to that Economics Professor's prediction of $10/BTC...

Miners setting the price floor? Just the opposite of what i've heard. Miners need to cover their cost of production. So they need to look for the good deals. Selling the bitcoin at current market prices is the deal.

Miners are not a special class of Bitcoin owners. They have no special privileges or rights. If they want to sell immediately, they have to take the current price or less, just like everyone else. If they want more for their bitcoins, they can ask for more and wait and hope, just like everyone else. They have no direct control over the price.

However, mining and miners do have an effect on the price. Mining introduces more bitcoins into the economy, diluting their value. Over the next year, the number of bitcoins will increase by 9%, so the effect of mining can be expected to reduce the price by 9% over the next year, though other factors may cause the price to do something else.

Note that miners don't have to sell their bitcoins to have this effect. Mining and buying are substitutes for each other. Any bitcoins that a miner keeps could be considered bitcoins that are not bought. In short, miners increase supply by selling or reduce demand by holding. Either way, the effect is limited to 9% over the next year.

Yes, mining seems to be a waste of time and resources at the time being. However, despite the trading I do and buying and selling of bitcoins which happens around me, I use my spare phone which I don't use anymore (Because I upgraded to Samsung), I use my old Iphone for mining :P I just put it on charge all day and it keeps mining, I pay attention to it sometimes. Its obviously waste but I find joy in it too

Yes, I have heard about that app. I have even heard about an app which is like flappy bird, and you get money to play the game. If you are ranked high in the world high score board, you are paid in bitcoins:D :o That is such a smart idea, integrating crypto currency rewards with gaming. A smart way to lure young bloods with potential.

There are a lot of apps and games in the play store market which allow rewards and even game time in bitcoins, however the fraction of bitcoins is very less but still its nice to get some, especially if you are a bitcoin fanatic. This results in 2 things. First, the player is hooked onto the game for rewards, and the developers gain money without heavy investment in rewards.

Who said the miners set the floor on BTC price?

To a small extent they make a market (determine a price) because they're receiving brand new coins, but their volume is a drop in the ocean of bitcoin transaction volume in a day. The real price is set by the volume of buyers vs. sellers.

Pretty delusional thought, Mining is the backbone and fundamental of a POW coin and without any miners that mine blocks then there will be no confirmation at all. Mining is not a waste of resources because unprofitable miners has shut their miners off (unless they decided to hodl and mine for lost ) and at this rate miners is pretty much profitable considering that they are using the latest ASIC and nor is a waste of time because all you need to do is to pinpoint it to a specific pool and let the miners run .


The sad fact is that the price is heavily manipulated by traders and "hype" basically hype has drove the price up since the Greece Incident

the market cap of bitcoin is still relatively low, so it doesn't take a lot of selling to get the price to go down these days.  Once it becomes a more established currency, this will be much less of an issue.

Yes, you are right.
And this is the way that the whales manipulate the market prices of Bitcoin.

I would've thought an industrial scale miner is going to have an ongoing off market deal set up with buyers. Far too much hassle to dick around selling fractions to private individuals if you're making hundreds or thousands of coins a week and there are plenty of heavyweights who want to buy away from exchanges.

Mining is not a waste for a lot of people, a lot of people seem to be making gains monthly. This youtuber has got a nice coozy small mine on his backyard, its pretty cool, he's got a couple antminers, and he's making at least 2 BTC or 1.5 monthly. Cool gains which may be worth tons in the future if he holds.

https://www.youtube.com/watch?v=T_ylVOLvoiY

Lets not forget 80% of miners sell coins which is really helping in the distribution. The chain reaction of bitcoin distribution has already started infact the price dropping and all the panic sales helps further by distribution, the whole system is working perfectly in my eyes.

Price of bitcoin will be determined by the price of everything else ie supply and demand.

And it's price will be increased by the process of hoarding and perfect market manipulation.
I just hate those whales.