Bitcoin Forum

Why is the hashing power curve following a nice hockeystick curve?
If prices drop, wouldn't there be less incentive to mine them?
http://bitcoin.sipa.be/speed-lin.png

Not sure I understand the question , but the price of bitcoin has never been linked to network hash rate.
The reason the hash rate increases like that is because of moors law, which is constant and exponential
. The reason Btc prices fluctuate so much is because there is more speculative trading back and fourth than actual use of Btc in the economy. Although if you look at an logarithmic curve of the price , the value has actually matched that kind of patten to a degree. You have to understand that the 1,200 price was a tremendous bubble , there was no economic reason to support that kind of price yet. Everyone gravitates towards this idea that the price of Btc should follow supply and demand logic based on its production , ie how difficult mining is ... But that is only half the equation , you have to have economic volume and velocity on the other side , people have to spend it for goods and services , and there has to be a compelling reason to demand they spend Btc as opposed to fiat for that good or device , we don't really have that yet.
 

Precisely, and I don't understand the constant part.
Why would it be constant?
There need to be people/entities whom will buy and install miner hardware regardless of the current price.
So therefore my question.
Do the miners know something the rest don't know?
Why would they mine bitcoin if the price is decreasing?

Miners are a magnanimous lot that they don't mind paying for the expenses to make it possible for people who don't/can't/won't mine to be able to acquire Bitcoins for fiat. Miners are what keeps Bitcoin going, without miners, there'd be no Bitcoin. Respect the miners.

So  all  miners are ideaologic and don't mine for profit?

OP is asking why are miners still buying and deploying such tremendous amount of hashrate when today the btc price is only $500, about half of ATH a few months back.

Answer is simple, miners do NOT give a shite about rising diff or anything else. Why would they? They have barely high school math, most can't even do simple multiplication or division. They have $$ signs dancing in front of their greedy eyes, Get Rich Quick! It's only after they get in and realize they need more firepower to compete against each other, so they buy more rigs. Mutually Assured Destruction at work. One side builds bigger farm, now the others have to catch up or their investment will make much less. The cycle continues until someone chickens out and declares bankcruptcy as happens now quite often.

There are two points to consider.
First is the lag, due to the previous preorder BS, there has already been a huge lag between the decision (and maths) of a purchase and its deployment.
What made sense 6 months ago looks silly today. Fortunately those days are all but gone so we rejoin reality in a few months time.

The second point is power, that is the main point. We are not quite there yet but miners are still profitable. Forget getting what you paid back for your miner as its not always relevant.

What is relevant is
Does it Make more than it costs to run?
If yes then it mines, if no it will be switched off.

A tiny fraction of miners that buy the right equipment at the right time end up with more coins than they began with.  (coins after mining)-(coins before mining)= profit.    It has absolutely nothing to do with fiat money.  However, it is true that most miners do not fully understand this and think that they made a true profit from mining because they ended up with more fiat money than they began with; they would have made more fiat money if they would have bought the coins and held onto them until the price rose.

But the lure of mining gets a lot of people... including myself, who owns 6 Antminer S1's.  (bought in middle March, will make back exact btc's I've spent)

It's probably that all those pre-ordered machines are finally being delivered, now that they're no longer cost-effective. See Butterfly Labs lawsuit.

Miners realize that mining will be 100% centralized by the end of 2015 which in turn will have a huge impact on the bit coin economy.

Can I have that crystal ball you have, because mine isn't working.   :P

Seriously, I need to plan a year ahead accordingly.

Mine is working perfectly fine and he is right.

bit coin mining will be completely centralized by 2015 along with bit-coins, and bitCoin..

But bitcoin mining will be fine/decentralized.

there are plenty of people that need to turn undocumented income into legit income...

That miners isn't profitable :)..

no profit at all?

interesting comment ;D
so, the winners are Bitcoin ASIC manufacturer, right? ;D

At some point the hash rate will follow the BTC price. Marginal miners will quit if electricity is more expensive than mined coins, which happens when the BTC price falls.
When BTC goes up the miners will be turned back on.

Now this effect is too small to show. Lots and lots of new ASICs flood the market.

Mining will be crashing starting in June. By end of year there won't be many survivors except for the manufacturers mines.

I think this would only be true if electricity wasn't such a limiting factor. Soon KNC will need a nuclear power plant to power their farm.

I know,   and the farm is paid off with the customers pre order money mostly.

Haha, or a water dam.
But why is KNC mining in the first place, I thought they were only selling the hardware.

Another thought, at a certain point KNC will have a whole lot of pre-order hardware, just before they ship it out.
Could this lead to a 51% attack.
https://www.youtube.com/watch?v=Kjtgp5h-jEY&list=PLzctEq7iZD-7-DgJM604zsndMapn9ff6q (https://www.youtube.com/watch?v=Kjtgp5h-jEY&list=PLzctEq7iZD-7-DgJM604zsndMapn9ff6q)

*listen*

Knc only have like 2000 neptunes? Only additional 6ph.  Thats assuming both batches

6ph will hardly be a blip on the radar by time the neptunes finally ship.