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Title: Why doesn't BTC price eventually rise with mining difficulty Post by: Captimiz on March 18, 2017, 08:38:55 PM Which it should, as its mining which helps add more bitcoins to the market.
Title: Re: Why doesn't BTC price eventually rise with mining difficulty Post by: STT on March 18, 2017, 08:50:26 PM Price is free market. The cost of any commodity can fall below its available free market price, the force to determine a correct level is with the market not with the miners difficulty which is why difficulty is adjustable I think. Its very normal for operations to become unprofitable unfortunately, thats really a task for bitcoin to negotiate
Title: Re: Why doesn't BTC price eventually rise with mining difficulty Post by: -ck on March 18, 2017, 08:58:00 PM Which it should, as its mining which helps add more bitcoins to the market. Mining adds a fixed amount of bitcoin regardless of the amount of mining hardware thrown at it and the difficulty so difficulty and total hashrate is almost completely dissociated from the amount of bitcoin generated (it can only transiently affect it for up to 2 weeks but then the network balances out.) Additionally the perceived value of bitcoin is related to its perceived economic utility, affected by trade of/with bitcoin, and this has absolutely nothing to do with the mining process itself. The only relationships between mining and the value of bitcoin are indirect, related to the fact that miners tend also to be traders of bitcoin, and investors of money into mining hardware/entities/securities trade with bitcoin to do so. Confidence in bitcoin can be affected by the existence of miners/mining hardware/hashrate/investors into mining hardware, but again this relationship is only indirect.Title: Re: Why doesn't BTC price eventually rise with mining difficulty Post by: jonald_fyookball on March 18, 2017, 09:29:52 PM Which it should, as its mining which helps add more bitcoins to the market. Well, it does correlate but you have the causality reversed. Supply and demand control the price. Miners compete to stay in the game given those parameters. (and the mining difficulty is a consequence of that.) Title: Re: Why doesn't BTC price eventually rise with mining difficulty Post by: Yakamoto on March 18, 2017, 09:34:28 PM Which it should, as its mining which helps add more bitcoins to the market. It does.Inefficient miners get forced out while the miners with the lowest bottom line continue to survive and make money. That's how it works. It trades equality for efficiency. Investors and speculators, along with everyone else, dictate the value most of the time. Miners adjust or sell it for what they can at the absolute minimum to keep themselves alive, and if they get it sold, they continue onwards. If it fails to sell, they fall off, difficulty falls are miners get turned off, now it becomes cheaper to mine. It all works, technically. Title: Re: Why doesn't BTC price eventually rise with mining difficulty Post by: erpbridge on March 18, 2017, 11:39:30 PM Which it should, as its mining which helps add more bitcoins to the market. It certainly does. That is one of the reasons that the price didn't drop below 500 this time. If the price dips below 500, then the miners can't profit by running their gigs. Price will always rise when the mining reward halves and difficulty increases. Title: Re: Why doesn't BTC price eventually rise with mining difficulty Post by: Hydrogen on March 18, 2017, 11:54:46 PM How bitcoin is traded on exchanges hs the biggest impact on price.
News stories have the biggest impact on how crypto is traded on exchanges. Mining difficulty isn't something that factors into the price of btc much. Bitcoin traded on exchanges is a double edged sword. On one hand it allows the price of bitcoin to go from $15 to $1,000 within the span of 5 years or so. On the other hand, in times of uncertainty like the current doubt & fear with forks, the price can also decline. Title: Re: Why doesn't BTC price eventually rise with mining difficulty Post by: bncbnc on March 19, 2017, 06:51:10 AM Which it should, as its mining which helps add more bitcoins to the market. It certainly does. That is one of the reasons that the price didn't drop below 500 this time. If the price dips below 500, then the miners can't profit by running their gigs. Price will always rise when the mining reward halves and difficulty increases. Title: Re: Why doesn't BTC price eventually rise with mining difficulty Post by: ImHash on March 19, 2017, 07:11:13 AM Actually mining difficulty should have much greater impact on price other than the already psychological impact that it has on determining the market price. if you are buying 1 bitcoin for $1000 then tell me if you can mine 1 bitcoin investing in mining? people often compare things like scarcity and supply and the amount of work required to obtain something and if you can easily obtain bitcoin all by yourself without the need for large investment in mining field then others would never pay $1000 for the coin that you mined by spending $100 or $200.
Tell me how many TH per second is needed to mine 1BTC and the average electricity cost of it? In my opinion bitcoin is very much cheap and the real price is not yet in sight. |