Bitcoin Forum

Greed.

No. False design. Inflation. Miners can't change the number of coins they mine, not their fault at all.

You are a god damn fool.

These corporations are setting up shop pumping out more bitcoin than they even have a demand for.

No miners, no Bitcoin.

Just for our education and amusement, how much more bitcoin are they pumping out these days, than say in 2013?

So much more. Way more gigahashes worth of Bitcoin.

Inflation is the biggest factor at the moment. It takes a ton of new money each day to keep prices at the current level.
Great thing about it, shows that we are still in the early stages of Bitcoin. Imagine where it will end up stabilizing in a decade after halving a couple times.... :)

you  are the fool for not knowing more hashrate doesn't produce more coins. The inflation of 3600 coins every 24hours is a hard number and does only change every 4 years. Hashrate has nothing to do with the emission.

Bitcoins design is faulty from economic standpoint. Logical mistakes in it. Inflation kills it.

So much lolz.  Thx

A bunch were kicked offline tonight. Fear not!

https://bitcointalk.org/index.php?topic=923056.msg10132602#msg10132602

Going to have to weigh in on this - without us miners, no bitcoin, and quite frankly with the sub 250USD price, it makes it not profitable to mine.

Traders mess with the price of a commodity that will either make it, or be ruined by the greed of people without skin in the game.

 >:( ???

produce coins with miners not too much affected of price inflation

Oh, common, we are not that bad  :-[

While the coin generation is slower than before because of halving.  I think he does have a point though - in the past, individual miners mine the coin - quite a lot of them keep the coins.  Now, corporation is mining the coin, but they are dumping it.

I think this is the biggest problem facing bitcoin right now.  Selling pressure + non profitable mining is not a good situation in this very pivotal time.  Unless difficulty drops significantly, I don't see any incentive on why miners would be taking a loss if the price continues tanking.

miners need to be able to sell their coins. Why mine otherwise?

Miners do wield too much power in the market this late in the game. But it's not their fault for selling what they produce. The fault is inherent to bitcoins' high emission of new coins.

Miners should not be such a great force in the market to not drag the price down but in bitcoin they are that's why it always will drop back down. Bitcoin isn't scarce at all so it has not much value. It's a totally overhyped coin.

no miners killing bitcoin also

Miners are just keeping the price down until next halving.

brilliant design for a coins' economic fundamentals, isn't it?

The ball is at the altcoins court now.

It is very early in the coin's history.

no, no,

the true killer is endless short trader and exchanges

So how do you expct us to pay for our electricity, do you have a place that accepts bitcoin where I can purchase my electricity? how about internet, what internet companies accept bitcoins. Its not the miers fault. No Miners means No transactions get processed. If not for miners you idiot there would be no bitcoin.

Its the coin dumping merchants, the chinese unethical mining equipment manufactures, and last but surely not least it the developers of bitcoin sitting on their asses waiting for a damn handout. DEVELOPERS GET OFF YOUR ASS and do SOMETHING, DO ANYTHING to get this coins value to go up. ITS IS your responsibility to raise awareness to your project, it is your responsibility to create a demand for bitcoin, it is YOUR responsibility to do your job. We are investors in your project, in your dream. If this were a fortune 500 company you would be broke and all your investors would have sold your stock and left your company. You and others need to realize whose responsibility it is to work this project. We pay you as investors and you do your job pure and simple. I want to see some facebook adds promoting Bitcoin, some google ads promoting bitcoins use, we need an a merchant area where only bitcoins are used, we need an Auction site, we need a lot of simple things that you can do. Takle some of that fortune we gave you and pay some web designers a team dedicated to running these kinds of things, STOP sitting on your ass waiting for the people who invest in your prtoject to do the work for you!!!!  You have the money thats for sure to put these programs together. USE IT TO STRENGTHEN YOUR COIN. . I want to see developer counters on all the bad press we get in bitcoins. FOR GODS SAKE DO SOMETHING!!!!!

Maximum pain soonish.   8)

I agree with you and also not many people are going to mining now because it's not profitable since they can't compete with big farm miners. What this did is, rich got even richer and little guy lost their slightest chance of making any money.

Wtf are you talking about? Why don't you do something? Why you want someone else do something? You can't change the world by waiting! Start be the change you want to see in the world! Don't wait for someone else to do it!

Bitcoin is not their project! It's OUR project! We are all in it! And as long as big companies were late to our project they will try hard to make it cheap so they can recover what they don't have because they were a little late!
Stop crying and start doing something!

I agree. The miners should be expected to sell at least a portion of the bitcoin they mine in order to pay for their expenses like electricity. This is especially true considering how much electricity the overall Bitcoin network uses to secure itself

I run a Prisma.. a few between my partners. They break even in 6 days... each month...

Guess it depends what you pay for power :P

Hmmm, kinda like the fiat system, amirite?

They cant "pump" out more than anyone else.  25/10min

You are aggravating me,let me begin to tell you why.

When you paint a picture of the average miner what does his set up look like?Does his set up look like a HANGER FILLED WITH MINING RIGS?

So...So what if that is the most bitcoin THEY can produce. The point is,THEY ARE PRODUCING BITCOIN AT A ALARMING RATE.

The average miner cant even make 25 bitcoins in a single month. You know,the miners everyone is saying "without them,their would be no bitcoin." You know,the modest miners,them. I don't even know why you wrote that it just frustrates me,whats the point?They are raping bitcoin and you don't even see it.

You don't understand how currencies work, especially deflationary ones like Bitcoin, so please, don't act like you know everything, especially when you're very, very wrong.

You and Bitcoin devs need to learn how business and investments work
You have a bbusiness, and idea a project you get investors money and YOU not the investors do the work PERIOD thats life and thats business. I did my part I invested My part of the deal is over. It is NOT "OUR" project it is their project, their vision their dream. We just are the financers. As a financer I want them to make my investment worth while not sit on thier ass with their hands out :) If I want to do all thier work might as well just start my own coin huh??? "you cant change the world by waiting" that si a perfect line to be directed to the developers who are "WAITING" for you and me to make thier already full wallets overflowing.


I kind of see your point now so your title should actually be Large Scale mining outfits are killing b itcin. not miners in general, But I hate to tell you , but you will never get the large scale boys to give up, they have to much invested and right now they are nt making huge profits. they havge no choice but to dump the coins at 260 bucks a pop, the electricity they use can be upwards of 70,000 USD a month in costs, how can they pay that.

What i agree with is these huge farms are certainly not doing anything for the difficulty and make it only harder and harder to mine but I think that is thier point. They want to certalize a system that was supposed to no be centralized. By owning the most hardware in a group you in a sense control the difficulty you control the ability for everyday nobodies to get involved. You have the feeling of controlling something like the big banks do. JMO

Where the fuck did you assholes come from all of a sudden? If you think there's a better way of maintaining an network, implement it, Bitcoin is open source, that's the reason why devs don't bow to your every whim, if you want to make changes you need to download the code yourself and get to it. Something tells me though you guys definitely don't have the expertise to even organise something like that let alone code which is why you're here bitching at the developers instead.

yes, Regardless of the past now or in the future,The miners are necessary,At this time, the biggest trouble is that arbitrage coin dealers  !

Oh get over yourself bro what are you doing for bitcoin NOTHING where is your mining pool, your merchant site, where is your casino, what are you doing to help bitcoin, Hell do you have even a basic informational site, a facebook group what do you have?? YOU HAVE Nothing so so dont bitch at us like you are all high and mighty. Oh my bad you have a very basic website store that does not sell anything people need or wants in order to sue bitcoins to buy them. HAHAHA

I have an informational website
a facebook group
I hold seminars all over the Philippines to raise awareness (FREE OF CHARGE)
I have a mining farm
I have trading accounts.
I have 2 projects in the working because those other projects just got finished

I am doing something

and I do know how to code thank you :) dont judge a cover bro.


This is how investments work no matter if your pea brain wants to accept it or not, YOu start a project from an idea, you get investors to give you the money to get it to work, and YOU not the investors do the work to make it happen, if it fails YOU are responsible to pay the investors back. Thats where bitcoin problem is they have a bunch of investors and absolutely NO responsibility to pay them back, so they can easily sit on thier ass and wait for people like ME ( NOT YOU) who are willing to work hard to come up with ideas, and programs to make thier dream a reality. they have no advertising, nothing promoting that the Bitcoins devs are responsible for the past 2 or maybe even more years, no facebook ads no google ads, NOTHING they are doing nothing, probably have other jobs and this is just a hobby to them.

What are you even ranting about? O_O

No, they are not.
Miners are producing new bitcoins at a predetermined rate (+/- few %). That fact was known at the very start of the Bitcoin network.

That's where Bitcoin network self-adjustment comes into effect.
Difficulty doesn't drop by some king of magic, or God intervention. If mining is not profitable for some miners, they will stop mining. Less hashrate on the network - difficulty drops, and miners that are still mining get more coins.

I have a lot to lose, when Bitcoin fails, but I still enjoy this threads. A lot to laugh about.

Actually in this world there are plenty of things you can do where you'd earn less than invested. It's called bad business.
Now, if you, BTC miners, would wake up, stay one week away from your precioussssss mining systems, then try to think clear, you'll see that a lot of you should do what cex.io/ghash.io did (I will assume that they were legit, I don't know for sure, I don't want to start another discussion about that.) : pause; stop. Because it's not worth it. At least for most miners.

There are technical details on how this could be done to not harm the network, but after "the big step", even 5-10% of the current network would be as good as the current full network (as block speed and rewards).

Of course, then there would be issues to be prevented, like 51% attack, but as I don't see the network go down to 5-10% it's not worth talking about the rest.

A lot to laugh about, indeed.
But I'm getting a little irritated by the uninformed making statement like 'Unless difficulty drops significantly, I don't see any incentive on why miners would be taking a loss'. What is this? I read that over 10 times, thinking I misread something.

I don't know, there are always a lot of opinions out there, that don't make sense to me, but are repeated a lot.
If you look at it from a mathematical perspective, the statement make sense. If you have the same hardware and are currently at a loss, there are 3 ways to get back in the winning zone:
1. price goes up: you can sell your btc for more money
2. difficulty goes down: you produce more btc
3. you pay less for your energy

Why people think, it has to be number 2, I have no idea.

Bitcoin price is going down. When the price will reach 1 BTC = 100 USD, the miners won't be on profit and they will stop their working.

Seems like a reasonable floor. I'd take it to re-buy in.

there are people who talk about 10 USD because nobody is buying at this time and there are no BIG stupids whales anymore :)

cough cough, BTC adopts POS so theres that, it would work without miners.

No, miners are securing the network! The lower price is caused by recent events which are undermining the confidence of bitcoin holders, such as the missing coins in bitstamp and BlockChain, the random number issues etc!there are endless issues coming out every day!

Well that does make a bit of sense in that, difficulty is a proxy for the number of miners/amount of hash, if the 3600 BTC a day pie is shared between less miners then they get more pie each.

They are the one maintaining the network so why blame them? If for any reason bitcoin fails, it is purely the design and fault in the system that allow people to manipulate.

CEX.io  suspended their services. So, the miners are jumping from boat :)

this is ridiculous, you are guys are so overwhelmed by greed that are putting the blame on the backbone of this thing, the miners that gives you the last argument to keep using bitcoin, muh network, its over there is better tech than bitcoin.

Miners keep bitcoin alive while killing bitcoin too ::)

Miners keep bitcoin alive while killing bitcoin too ::)

Shhh.  Don't let him in on that little fundamental secret.  It appears he's quite confident in his own ignorance. :)

This!

and irritated with post like this (if he=me). I know that 'secret', see my previous post https://bitcointalk.org/index.php?topic=923018.msg10135314#msg10135314

Pay attention, please.

there will no profitable for any miner because the expenses will be higher than the revenue

Uhh.  You realize you re-iterated what I said in my excerpt that you claimed was false. Lol.  I don't even know where you're going with this....I clearly stated dropping price forces miners out, and the price may not recover if miners drop out unless the difficulty drops enough for miners to jump back in.

Reading is fundamental, my friend.

^
Ok, NOW you are clearly stating that we indeed are telling the same thing. Your previous wording was confusing (english is my 3rd language, and I really did read that over 10 times), that I tought you are saying difficulty is kind of changing on it's own will.

they have no choice but to sell coins to meet costs, the question on my mind is how does anyone still think proof of work was a good idea

That is the basic goal of mining - mining cost aproaching the cost of mined coins! Miners have to sell the coins, so coins can circulate to the market.
That equilibrium happened with GPU mining back then in 2011, now has to with ASICs.

I'm pretty sure that if the price was going the other way hard, there would be whines about the miners hoarding and not putting fresh coins in circulation.  ::)

I doubt it - this is certainly not true for the 'corporate' miner

Bitcoin is fine. Miners help give it value.

You noobs need to get used to price fluctuations.

I'm sorry you all bought higher than the current spot price, and therefore cannot sell your bitcoins for a profit, but everyone here knows Bitcoin, as an investment, is high risk. You ALL knew that.

Many people are doing just fine with the current price. Sure, a higher price would be nicer, but some of us bought BTC at $5 and $10 and $20 each. Or GPU mined a ton of bitcoins.

The noobs are panicking and making a noise about their losses. Ok. Then maybe you're not ready for bitcoin.

Here's a novel suggestion, use Bitcoin to buy and sell things. That's what a lot of us do. Ask people if they accept bitcoin or are willing to accept it. Don't just camp out on the exchanges all day. Use it for goods and services. Satoshi gave us this gift of bitcoin. It's amazing technology. Use it.

Proof of Work is terrible idea, I vote for abandoning it completely especially offline, where I wanna be paid for doing no work whatsoever.  ;D

Yeah, nothing has really changed though, it's still the little guy getting ground into the floor. As the price goes lower more people feel the pain and then they start to get angry - some of that anger is boiling over on this thread.

Some people feel that they were duped by all the "To the Moon!" ranting when the price was high, they believed that by getting in they'd be early adopters before the masses got on board... now they're thinking that the masses won't get on board... the dream is over, bitcoins bought between $500 - $1000 are worth less than $250, corporate miners are depressing prices further as they sell into weakened demand... yeah they are mad, angry and hurting.

Tough times for some folks... tough times.

 :-\

One thing is clear: Bitcoin is many people's first investment. What people are experiencing with the price drop happens every single day in other investment markets. People must learn the hard way.


Watch this video from the ol' days MtGox, and pay attention to the price. Remember, this was BEFORE the big spike up over $1000.

https://www.youtube.com/watch?v=K2ku1A5Ox8U


People panic. Prices go up and prices go down. It's all part of the game.

Most of the postings atm can be described in one only word: Panic
Y'all can go over to the dumping part now, instead of extending your pain.

haha. Well said.

Thanks! Just watched it in some other thread on this forum, and was mesmerized by how price was dropping before the 2013 craze. I'm holding my breath and observing the whole picture to unveil.

The price drop in 2011 was especially painful. >$25 per BTC to <$5 per BTC. That one really hurt.

And yet, mining continued.  :)

Yes, mining continued because the electricity bill was OK for that year, 2011.
 Now, you have to spend a lot of money on electricity and hardware otherwise you won't make any profit.

You have the cost of the mining computers, storage space, and energy for cooling and powering the mining machines.

The profit in bitcoin mining is all about making sure that the selling price (or stored trading value) of the mined bitcoins is greater than the cost to mine them in the first place.

As the Bitcoin mining profitability is all about getting the hash rate (speed of calculation) high enough, while the cost of hardware and energy is low enough. Even so, because bitcoins become more difficult to create, the existing hardware (no matter how large its current hash rate) will quickly obsolete.

You cannot mine  by using your PC anymore.


If 1 BTC = 5 USD = NO miner :)

That's funny. Run a room full of overclocked GPUs in the middle of summer, then wait till you see the electricity bill.

I will mine, and so will others. In fact, I've never sold a single bitcoin that I've mined, and I've been mining since 2010.

Low difficulty? No problem. Open the Bitcoin console and type "setgenerate true" and keep the hashes coming.

People are panicking now, because the price is falling. When price rises again, people will feel differently.

Mining isn't going away.

you will be on loss. I am not sure why someone would do that.

One miner alone can earn up to 1-2 BTC per month

calculate yourself :    http://blockchained.com/profit/index.php

The fixed daily supply nature will make exchange rate's rise and fall much dramatic than traditional currency, since the supply can not be adjusted to demand, exchange rate is the only variable

But this is considered as the best feature of bitcoin, just by looking at exchange rate you will know the demand is weak currently. With fiat money it is much more difficult to see the demand since FED is changing the money supply all the time

It's only a loss if I sell, and I have never sold. I mine because I like to mine.

Good food for thought. A few other points to consider. The rate at which bitcoin supply increases is known and predictable to a fairly precise degree. The rate at which the supply of new dollars increases is neither known nor predictable. (The Fed doesn't change the money supply, but your point still stands.)

Also consider the velocity of bitcoin, which is often overlooked by speculators.

In a strange way, bitcoin has far more in common with the US dollar than with other traditional currencies or even cryptocurrencies, insofar as bitcoin has a quasi-reserve status, much like the US dollar, treasuries, and gold.

maybe you are an eccentric millionaire and you want to have some "fun" (i am not sure where it is the fun to mine..in the end, it's your choice) BUT 99% from miners are doing it for pure profit. They mine, the mining has a cost and they sell for a price.

If they get a lower amount than the costs, that means bankrupt.

Miners to da Mooon!

You're right.

(And you're not the first person to call me "an eccentric millionaire." haha.)

As you said, 99% of people mine for profit. This is probably true.


Who are the rest? I don't know. I suspect there are a few people located in countries with currency and capital controls who mine as means of diversifying their assets. They can't buy bitcoins at a good rate or dollars at a good rate or anything at a good rate except for the state-imposed currency, but they can buy mining equipment.

There are also probably a few people who use ill-gotten money to purchase mining equipment as a means to launder their cash, whereby they create fresh bitcoins.

you said "investment". BTC was 1000 USD a year ago. Normally you should have sold your BTC at that time.

This is an investment, the action of investing money for profit.

 You cannot launder cash if you buy mining hardware which will be useless in 6-9 months it's like you trow the money away and the laundering assume that you will recover the these money.

 There are much better ways to real launder the cash. :)

He's no fool. People need to eat and will secure their well being, mining under a crashing price is not on their interests. In any case, if you call the greed card, Satoshi should have predict this scenario, hence design flaw.

Let's have hope tho, the war ends at 0.

25 bitcoins are created every 10 minutes regardless of the number of miners on the network.

How exactly are miners / mining killing bitcoin?

Well, as far as I understand the biggest miners could actually "kill" the blockchain if most of them shut down their operations at the same time. Especially if they did it shortly after a difficulty update.

I'm shocked by some of posts in this thread.

Let's look at a few examples:


Having a predictable supply of money is good.  Having the ability to inflate the money supply if necessary is also good.  Inflating the money supply irresponsibly is bad, but inflation itself needn't be.  


Lmao, what?  Dunce cap?


Not even close.  Inflation didn't stop the ridiculous rally to >$1,100, did it?


Mentioned above, the ability to inflate a currency when necessary is extremely beneficial.  Only irresponsible inflation is bad.


Hilariously stupid comment.


There's really nothing useful or informative about this assumption.  We already know that mining tends towards an equilibrium between difficulty and price.  Since we've been near equilibrium for some time now, we can expect the difficulty to drop if the price continues to drop (which it will, and it already has).

I'll stop there.   Those were just from the first page, and I didn't even make it all the way down.  Based on this, I'm almost just tempted to say people in general are too stupid to form their own economy, at least democratically.  Democracy --> mediocrity.

Only to the extent that it would take longer to reach the next difficulty adjustment.  Yes, mining is tending towards centralization, but it's in no way centralized enough such that transactions would never confirm if the big miners called it quits.

If everyone is not careful, fear will kill Bitcoin!

This I don't know. What I can actually see is the ridiculous explosion of hashing power (https://blockchain.info/charts/difficulty?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=) deployed throughout 2014 (hover your mouse over the flat line, note that pre-2014 the trend was already exponential).

As I said I don't know how many oversized mining operations (http://bitcoinomics.net/wp-content/uploads/2014/11/ASIC-Mining-640x353.jpg) are out there. If there are just 6-7 of these and they are 90% responsible for this last year's difficulty spike Bitcoin is screwed, as stopping them would mean that mining a new block would take hours instead of 10 minutes. And mining 2016 new blocks to reach the next difficulty readjustment would take forever. This would mean game over, because in this scenario transaction confirmation would take days or weeks, thus rendering the coin unusable. If there are tens of thousands of operations like these I guess Bitcoin's future is safer and could still ultimately prevail.

At any rate, these big miners need to dump their fresh coins to cover their operational costs, thus pushing the price further down and slashing their margins even more. So we know they will be shutting down soon. I believe we're about to see how it all pans out  :)

Nah to hell with that,unless its drugs I'm not buying anything with my bitcoin I'm trying to cash out.

Is this you? (https://bitcointalk.org/index.php?topic=897395.0)  :D Watch out for these wild mood swings.

If you are going to attack me you should at least educate me,you keep redirecting.

I know for sure small miners are not producing a lot of bitcoin it has already been said a few times in this thread,so I don't see a argument.
Wait,I see the argument it is the argument you make up just to argue. Petty.

Im not talking about the small miners,I'm talking about the corporations with hangers filled with these huge towers rigs.
All they are doing is producing as much bitcoin as they possibly can even if they aren't going to sell all of them they don't give a fuck.

It has also said here that they manipulate price,so how am I wrong?

No miners no bitcoin,no shit.

But these miners I am talking about are like the bitcoin hiv.

Stop it,you are going to make me blush.

😊

This is funny. I assume you are being sarcastic here, but the sad thing is not everyone understands that hash rate doesn't change how much Bitcoin is mined.

so do you think that the bitcoin halving next year will help this to be established?

I don't know ,since the "experts" have been wrong. So what the hell would I know,I just take a guess,just like the "experts". You know,the guys that set up those elaborate graphs that all end up being wrong?

Anyway. Um. My guess is bitcoin will recover. I hate to say it but,you know,when I bought in at 350 I said to myself. "Bitcoin is in a downtrend why am I buying now?" Oh,my impulsive tendency got the best of me again. Anyway. Uh. Lets see,where were we? Yes the halving the halving.

I don't think it will even matter to be honest unless by that time we have a larger network of bitcoin adapters. So what if it halves ?Yes it will be more difficult to obtain/produce but so what if it has no use anymore right?

Dude, seriously... Shut up. Chill. Listen. And read up.

assuming all the mined coins get sold instead of needing 800k new $ daily to keep the price stable we will only need 400k, still looks pretty grim to me

'the joint' knows what he's talking about. Listen to him.

Far more than just mining killing BTC price atm.  You think the fella that stole 5.5 million worth of BTC from bitstamp gives a rat's ass what he sells at?  Or hashie.co, or any of the myriad other hack-jobs, HYIP ponzis and whatever other scams that are constantly going on in this space.

Observe how pessimistic the newer members are compared to the elder members.

they are not pessimists. they live in reality. if the miners will stop the mining , there will be NO Bitcoin.  because in this scenario transaction confirmation would take days or weeks.

 Who will validate the transactions?:)

You're misinformed. Mining isn't going to stop because the price drops. It could drop to $10 per BTC and there'd still be plenty of hashing power to "validate" the transactions. There'd be many desperate and despondent miners, very angry miners, but the network will not suddenly stop because the price drops.

Also, I suggested that the newer members are generally more pessimistic than the elder members, not that they were pessimists. It's understandable, because they bought bitcoins at a higher price. I feel for them. We've all been there. I am a pessimist to my core, but I am not pessimistic about mining. You have to realize that the panic that's taking place right now, many of us have experienced this several times before. We're not as vocal about it, because we know it will pass. Another reason there's so much despair and pessimism about the price is that for many new members, this is the first time they've invested in anything, and they're not used to the pain of losing. How many of these newer members lost equity in the real estate bubble or the tech bubble or the stock market crash of 1987? Essentially, they invested more than they could afford to lose, and they lost. Tough, but that's why good investors are so obsessed with risk.

On the upside—to be an optimist, haha—after these kind of brutal corrections take place, people typically regret selling and typically regret not buying more when the price was low. Most investors are bad at investing. They follow their emotions, behave irrationally, and follow the herd. For such a contrarian group of people that bitcoin miners are, I'm a little surprised they don't have contrarian investing stratagems instead of buying high and selling low like they usually do.

We replace pessimism with narcissism.

 :D

The miners won't work on loss. Now, many of them are doing that and it's 1 BTC = 230 USD
Why do you think that Cex.io stopped their biz today? I guess they had around of 60% from network... :)

I didn't think about it like that. Spot on.

Silverback alpha bitcoiners be sitting back eating fruit, juveniles and betas be gibbering and flinging poop at every bush they see twitch. Silverbacks know a tiger when they see one, and will stride over and brain it with half a tree, until then let the rest of the troupe gibber.

mad paint skillz yo. :D


Not too sarcastically, nicely illustrative.

Poor Satoshi, he looks rather sad. In my mind I've always pictured him as Dilbert's garbage man.


https://www.youtube.com/watch?v=PDH3XuxF_Qw (https://www.youtube.com/watch?v=PDH3XuxF_Qw)

Way to put me in my place... I guess?  You first go on to say that my statement was an 'assumption,' which in fact it is anything but.  Then you further reinforce this by simply reiterating exactly what I said as fact.  

So yeah.  I don't know why you chose to re-quote me if you simply agreed with what I said.  And I never claimed any of my post was earth-shattering news, but rather just pointed out the obvious for those who quite ostensibly are unaware, and somehow think this is due to inflation.  

Cool pretentious attempt at a counter-rant though, brah.  You so erudite!

This new generation of bitcoiner is quite sad...

http://weknowmemes.com/wp-content/uploads/2011/10/double-facepalm.jpg

I personally guarantee that there will be 3.5Th - no matter what the price is  ;)
Yea, any my equipment is has already paid off.
Yea, and my electricity is free.

As many other have pointed out, the miners have no control on the amount of new bitcoins that are produced.  Except for temporary fluctuations due to the delay in  the difficulty adjustment, here will be about 3600 BTC made each day, no matter what the miners do.

The miners can influence price, however, by holding some of their coins, instead of spending them.  But that is best understood as if each miner Joe were two persons, "Hasher Joe" who does the actual mining and sells all his coins, and a "Hoarder Joe" who buys back some of those coins with some of the money that Hasher Joe made. 

Hoarder Joe is an investor like any other.  He has no more obligation to buy coins than any other investor.  He has the right to decide when and how much to buy or sell, seeking maximum profit.   So, it does not make sense to demand that  miner Joe should hold more of the coins that he mines.

If miner Joe is now dumping coins that he mined months ago, he should not be citicized for that; he should be thanked for having retained them at the time, since by doing so he helped support the price at that time. 

It's very refreshing to see some old-timers here share their experiences with the previous booms and busts the price went through. It is truly depressing that the price is falling right now, but as long as the BTC is worth something, I'm staying, sinking ship or not. (The value of the Blockchain itself is worth several times more than whatever highs the marketcap ever got)

This is incorrect. The miners have costs that are based in fiat, electricity. They need a way to pay for these costs, they use the bitcoin they mine. If the bitcoin they mine does not cover the electric costs then they will stop mining. Even if they plan to pay for their electric costs out of separate funds and to hodl the bitcoin they mine, they would still stop mining because they would be better off buying the bitcoin on an exchange

That doesn't mean mining will stop, just that the network hashrate will go down. Transactions were validated just fine at 4B difficulty and 4M difficulty.

The only worrisome thing is then what happens to all the hashing power that gets turned off. If 1/2 the network drops out Bitcoin will still confirm just fine, but you now know there's the same amount of hashing power out there that's dark and is likely available for firesale prices.

If the price were 10 $/BTC (as it was a couple of years ago), the miners as a whole would receive only 36'000 $/day.  At 0.10 $ per kWh (say), that could pay for 360'000 kWh per day, or 15'000 kW.

Therefore, in that situation, almost all of the current miners would have pulled the plug; but there will be still be the equivalent of 10'000 (say) ASIC rigs in use, each consuming 1 kW and doing 1 TH/s, and their owners together would make 12'000 $/day of profit.  The total network power would then be 10'000 TH/s, or 10 PH/s.  Which, surprise, is about 10$/220$ of the current network power.

Yes, we should make good efforts to keep track of as much of that as possible.

It would take time for the miners to stop mining and when the hashrate would drop by that much then it would take a very long time for the next 2016 blocks to confirm.

if there are 10,000 miners that means 1,2 USD per miner/day and 36 USD profit per month.  :)
 ...also, the kWh price is different.
example :  New York  =  USD $0.20/kWh which will double your cost estimations.

You can even triple the estimated profit. let's say 100 USD per month or 200 USD...would you "mine" for this amount? :)
How would you buy new hardware in 8-10 months? from what profit?

Your statement is contradictory. If takes much time for miners to pull the plug, the difficulty will ramp down more slowly.

Those miner with free electricity will sit comfortably with their mining rig. Those with expensive electricity will stop the mining and buy coins instead. And those who want to make fiat money through mining will all quit

99.9% wants to make fiat money from their work :)

That's why I didn't associate your name with your quote.


The point is that it's a poor context in which to explain the state of the market.   It basically equates to "there's selling pressure because people aren't buying" and "mining is less profitable when it's less profitable."   Both of these statements are obvious, yet neither necessarily means anything about market health (i.e. whether it's a 'good' or 'bad' situation).  It's also like saying "selling pressure + non profitable mining is not a good situation in this very pivotal time which can be defined as a period of selling pressure + non-profitable mining."

A point I would concede is that non-profitable mining can lead to additional selling pressure if miners panic and race for the exit to salvage whatever ROI they think is left.


I don't agree with what you said inasmuch as I don't agree that "selling pressure + non-profitable mining" is the biggest problem facing Bitcoin.  I wouldn't, for example, draw the conclusion that "buying pressure + profitable mining" are Bitcoin's greatest advantages.  The rally to >$1100 met both of these criteria, but all it did was introduce intense market instability as a result of a gross mismatch of monetary input and output.  Price and personal performance are not in any way direct indicators of market health.


We all ride high horses.  I refer you to this: https://bitcointalk.org/index.php?topic=923018.msg10142913#msg10142913 (https://bitcointalk.org/index.php?topic=923018.msg10142913#msg10142913)

Miners are the best part of bitcoin.  It's what made bitcoin even possible.  The problem with mining is that it wasn't very well considered for the lay person.  There should have been more invested into preventing ASICs from taking over.

But don't blame miners.  Blame the technology devs.

Yes; but then (as of now) the economics will strongly favor large miners, so there may be just one company with all the 10'000 rigs, collecting all the 36'000 $/day and making 12'000 $/day of profit.


... which means that almost all the mining will be done in places with cheap electricity.  This would be the case anyway, even if the price was stable at 300 $/BTC or 3000 $/BTC.

If each 1 TH/s rig makes only 1,2 $/day of profit, it may not be worth upgrading.  If it dies, another one like it can be bought cheaply from the miners who had to close shop.  There may not be enough demand to motivate the design of new ASICS.  If a substantially more efficient chip becomes available, a company with 1000 rigs may buy a couple of them per week.

i blame karpeles and the buying bots.  prematurely raising prices and making everyone think bitcoin was going to $10k for no reason.  bitcoin is not expensive to mine for the asic manufacturers.  the equipment itself is worth very little and they sell it to us at a very high premium basing peak price numbers and our sucker greed of potential profits. lots of people lost money and confidence.  bitcoin should have been sub $100 until the next halving. 

The price reduction is good. It spreads out the coins and also forces to think of alternative systems.
Its dawning on the general holders that mining is promoted by a few groups with vested interests.

The bitcoin is preparing for the 0.1 W/GH miner machines arriving in the market in some months. Hahaha

The problem is that you can't make big transaction with a small capitalization or trade amount.

Going down in the price to 140$ would be healthy and a rebound of this bear market.

Mining turned out to be a dumb idea.  We have about 10 mining pools that control over 75% of the network anyways.  You don't need a mining reward, the large owners of bitcoin will protect their interests.  Proof of stake without any stake reward is the future.

Building up the blockchain can built value. So good that the bubble is bursting. over the next 5 years the reward will be decreased anyway.

Well CEX.io has already suspended their cloud mining services because of the current drop in price.
http://dcmagnates.com/cex-io-suspending-cloud-mining-service-as-weak-bitcoin-prices-take-their-toll/ (http://dcmagnates.com/cex-io-suspending-cloud-mining-service-as-weak-bitcoin-prices-take-their-toll/)
Miners are also facing a tough time.

If bitcoin price is falling that doesn't mean it is dying if there weren't any investors coming in that would mean it is dying. Mining farms being built is good for bitcoin, it means more capital is coming into the bitcoin economy.

The demand is falling, and selling pressure is far outgaining buying volume.  Companies can invest in bitcoin, but if they're merchants, it doesn't do anything to help.  Merchants themselves could give a damn about bitcoin in its premise...as all they do is cash out to fiat and dump it on the market the second they receive payment.   It's simply just another medium for them to ultimately receive fiat and maintain company cash flow...just like a credit card or paypal payment.

  Mining simply isn't profitable anymore, so there's the second problem.  If a lot of miners are forced to drop out the game, then it hurts the blockchain and flow of the technology.  But if there's no turnaround in price then there's no way around it, as majority of miners have to cover personal expense and equipment simply isn't cheap.

This is going to be a very vital and interesting time for bitcoin.  Halving rewards doesn't happen until next year, but the question is...will there be enough buying demand from new individual investors (not merchants) to keep the prices bouyant enough to survive until then?  I said it about 2 weeks back, but oftentimes technology only gets a certain window of time to 'make it or break it,' and I believe this is the time that will either make or break bitcoin for good due to public perception, which isn't easily changed for such a new speculative and vital market...especially if most of the news is negative.

They don't do that, actually.  When they sell a 100$ item 'paid with bitcoin', they just get 100 dollars in their bank account.  That is why it is so easy to convince them to 'accept bitcoin'.  It is the payment processor's job to handle the bitcoin and convert it to dollars. 

Bitpay and Coinbase must have been running into huge losses with the recent price drops: they must accept bitcoins as if they were worth the current market price, but can only sell them hours later on Bitstamp. 

as any bubble, Bitcoin is goin down. it's something normal.

Bitcoin is on since 5-6 years ago. Only 1 MIL users worldwide including China. This is a fact.

There are no newcomers and that's why the price is falling. It will fall much more when the big exchangers will start selling their Bitcoin.

as any bubble, Bitcoin is goin down. it's something normal.

Bitcoin is on since 5-6 years ago. Only 1 MIL users worldwide including China. This is a fact.

There are no newcomers and that's why the price is falling. It will fall much more when the big exchangers will start selling their Bitcoin.

The other reason: I guess maybe the future crashes BTC, because whales can make money from dump and short. They don't need make money from going up.

First, miners, now merchant adoption? At this rate, every little action we take is gonna kill bitcoin.

How many times does it need to be restated that (Merchant Adoption != Falling Prices), Payment Proccessors dont sell their coins on the major exchanges, they sell them OTC where they could sell at a premium relative to the market price! Have you guys ever seen the listings for high-volume buyers? They would buy thousands at a time and not even flinch.

Now they're crashing the TSX, bastards....

http://www.ctvnews.ca/business/miners-help-push-tsx-down-as-world-bank-revises-global-growth-1.2187648

 ;)

Well, BitPay sells a lot through exchanges like Bitstamp and Kraken:

http://www.walletexplorer.com/wallet/BitPay.com

2015-01-12 21:21:37  -500.  Kraken.com
2015-01-12 21:12:22  -500.  unidentified wallet [44eaace4eb]
2015-01-07 19:14:24  -900.  Unidentified wallet [00a5eacf79]
2015-01-06 03:18:47  -300.  Kraken.com
2015-01-06 03:18:47 -1000.  Unidentified wallet [44eaace4eb]
2015-01-05 16:21:19  -500.  Unidentified wallet [44eaace4eb]
2015-01-05 16:21:19  -200.  Kraken.com

If you keep scrolling those pages you will see similar payments to Bitstamp (before the hack).

I haven't looked into the Coinbase wallet (available at the same site).


That [44eaace4eb] wallet may be some private whale, but may also be some part of an exchange's input wallet that the site has not yet identified as such.

If the OTC market price was higher than the exchanges, then why would they sell at the exchanges at all?

For lots of 500 and 1000 BTC, the OTC price cannot be much different than the open market price, since a broker could easily buy or sell that amount in the exchanges and make a lot of money from arbitrage in the OTC market.

Merchant adoption might not cause falling prices, but increased adoption could cause long term holders to use their existing stockpiles of BTC for purchases. I know I've made a couple purchases at Newegg using BTC since they've introduced it, whereas I wouldn't have sold BTC before to pay with fiat. I don't think that would cause anything like the current downturn though.

I'm not even sure there needs to be a reason for it. People have been skittish for awhile now, if people are worried about a long-term downtrend it wouldn't take much of a movement to send everyone to the exit before the bottom falls out.

Well i dont have a ton of BTC so im not worried and I trust the technology long term.

But 99% of lucky early adopters must be shitting their pants as we speak, specially if they didn't sold at the 1K milestone. All of these are potential sellers now.

I dont know if this has been mentioned in the thread yet, but regarding the topic....

Its true to a point. Miners nowadays are being forced to cash out a much larger portion of btc mined than theyve ever had to historically.
While the rate of coins mined stays roughly unchanged. The simple fact that theres MW's upon MW's of power that the large farms have to pay every month, means they have to cash out a shitload of coins, they get dumped on the exchange and forces price even lower.
Obviously this is outpacing demand substantially, otherwise the market would just buy it all right back up. This also causes an avalanching effect as the price gets lower and lower, because the miners have to cash out more and more coins.

Back in the 2011 days, miners werent forced to cash out such a large portion due to electricity costs, sure there were farms here n there that did have to do it ... but because there were so many garage miners / hobbyist miners that participated, most of us just hoarded the coins.

The mining landscape is vastly different now ...


But that doesnt change the fact that demand is substantially lacking in BTC at the moment, this is the true reason for its price decline. Another china like bubble hasnt come along yet from a different country, in fact the china bubble may be its last 'holy shit this part of the world has just found out bout btc...' type bubble ever to happen. Whats needed from here on out is a solid merchant acceptance foundation(which it has grown substantially since the years previous), consumer demand(which is nearly flatlined) OR... a major country's currency to go belly up and citizens flock into safe havens, like precious metals / bitcoin .. etc..(which is only a matter of time).

As bitcoin continues to go down, miners n farms will shutdown, diff will drop drastically ... which opens up Bitcoin to its Achilles Heal - being 51% attacked. Thats probably what scares me the most at this point. If people just start 51% it at will... 'The experiment' will have failed.

What pisses me off further is the devs just have ignored the 51% problem, relying on peoples good hearts at a few points in Bitcoins past and now its price fallout and possible subsequent 51% exploitations happening all the time... will be the ultimate example of irresponsibility destroying something potentially revolutionary. 

No miners no bitcoin :D

No bitcoin no miners.  We kill bitcoin and problem solved.  ;D

The price has always fluctuated. Just returning to normal til the next take off.

I would agree with this. However the long term effect will be a net positive for bitcoin. We will see long term holders start to sell their bitcoin which will cause pressure on the price, however it will also cause the distribution of bitcoin to be much more even which will cause more confidence to be put into bitcoin because there will be less fear that few people will control the markek

---

I think over the long term the miners will likely sell the majority, if not all the coins they mine for fiat in order to pay for their electric costs. This will probably also cause the price of ASICs to drop dramatically. It has been speculated in many threads that over the long term the difficulty will track both the price of bitcoin and the price of electricity

Price falling because Supply > Demand.
The real question is WHY Supply > Demand.

It's unlikely for Demand to drop drastically in short period of time.
Therefore, the main suspect is Supply.
What could be a reason for Supply to increase drastically?
GenTarkin's hypothesis of miners needing to sell more coins to cover costs is plausible, but unlikely.
Miners are not stupid to shoot themselves in the foot by over-saturating the market.
More likely is that somebody is dumping a great number coins (possibly in distress).

P.S. Also, some large miners quitting is a good thing for me - they quit, I get more coins.
I don't care what they worth in fiat right now, I hold them for a long run.
P.P.S. To all 51%-attack-phobists, even if 90% of miners drop out, this attack is still very improbable.

I would think so, since if just regular mining at 49% of network is more profitable than any odd few tx you can forge/double spend at 51%, and it's not worth mining, then due to low unit value, then basically it's just trying to be even more inefficent than mining.

The only time it makes any twisted sort of sense, in that it doesn't just have you burning a million an hour in electricity for nothing, is when price is leading the difficulty by some huge amount, but in that situation, mining gear is probably at such a huge premium that your opportunity cost in not just selling the stuff has an accountant somewhere turning purple.

Bitcoin is in a downward spiral like any commodity crash....miners have to pay their debts by selling bitcoin....as bitcoin goes down it takes more bitcoin to satisfy their debtors so they sell more bitcoin reinforcing the loop. Once the weak miners are washed out of the system and there is a supply shortage the price will go up...rinse and repeat.

Miners are in control of whether it is profitable to mine bitcoin. Take half the mining machinery offline, and the other half will generate twice as much bitcoin per hash.  It's that simple. 

The speculators are also in control of whether it is profitable to buy bitcoin.  If they offer twice as much money for the same amount of bitcoin, then the miners will miss out on their share of the additional money until they double the cost of production by spending twice as much money on hashing. 

The extent that Bitcoin has value as a currency or for being actually useful is one thing; but right now the seller side of the market is dominated by the price of production and the buyer side is dominated by speculation.

And the price of producing a bitcoin can be no higher (or the miners are losing money) and no lower (because then the miners aren't making money) than the speculators are willing to pay the miners to produce it.

We shall see a departure from this model only if and when Bitcoin has actual value for its usefulness as a means of exchange or storage of value.

Cryddit

miners will start "mining" Altcoin :)

If you took half the miners out and the other half generate twice the bitcoin per hash then that would mean they did it much more cheaply so  they wouldn't have to sell as much bitcoin to pay the bills and the market would stablize.

We all know that every bitcoin will be mined there is no stopping that. But if bitcoin catches on world wide an is truly excepted by all. Then that means that there will be less coins than people in the world that want them. This could cause price inflations or discretions.  It will ultimately become just like all other currency's in the the world.

without bitcoin miners will increasingly bleak
Ponzi who killed bitcoin,

I can tell you why supply > demand, and it has absolutely nothing to do with miners.

1. Fewer people are getting into bitcoin than before, so there is less new demand. I know this from personal experience.
2. Now that merchants are accepting bitcoins, people are spending down their hoards (large or small) and not replenishing.
3. Speculators are giving up and cashing out.

The impetus for these factors is the prolonged drop in exchange rate initiated by the bursting of the China bubble followed by the Mt. Gox fiasco. Eventually (or hopefully), the price will have dropped to a sustainable value based on actual usage, where the it will stabilize or perhaps begin rising again as adoption continues to increase.

What is it with this this ponzi scheme conspiracy theory?I just don't understand...

Maybe you have heard the term "competition" before.
If not, look it up on wikipedia.
It is not that simple.

If you (OP) think miners are killing it, ask them to stop instead... Let's see how this Bitcoin Protocol works afterwards? Do you think that without miners, even a single block will get generated? And if that won't happen, how will you get your transaction show to the network and get confirmed? Maybe a few are interested in dumping as it has become non-profitable since the low price, but that doesn't mean that everyone's the same, a few dump, a few collect...

Yes,miner selling coins is a factor that cause the price fall, But Bitcoin can't survive without miner that is the only way to "mint" coins.

Also, many miners have a full node running and that is the base installation of the Bitcoin network.

miners in general are not killing bitcoin. It is centralized miners that do not give a shit about bitcoin which are killing it, such as BFL, KnC, Cointerra, etc.

Independent miners are a different story, most of them believe in the bitcoin economy, as proof when the block reward was 50BTC this was never a problem, and now that it is 25 BTC we have a problem.

The reason for the problem is that bitcoin mining is becoming centralized, and that is a very bad thing, small independent miners need some hardware vendor that does not mine for himself, and that believes in the bitcoin economy to provide open source hardware to only independent miners at low cost, otherwise bitcoin mining  will continue to get centralized which is a terrible thing.

In the bitcoin world:
centralization is your best enemy.
decentralization is your best friend.

Why don't they just mine and hold? Man, must be great if you actually own 100k BTC after a year of mining. But no... dumping. Short sighted vision is what's killing Bitcoin.

Except that you must dump 'em if you've invested milions in hardware and have huge electricity bills to pay.

a miner MUST change the hardware yearly if not often than that. how can he pay the bills?

in the near fuure, the mining will be only in China :)

I still say that half the "problem" has been that we got onto 28nm ASICs too quickly. There was an unexpected oversupply of fab capacity in 2013. This lead to prices being slashed by half or a quarter, maybe 12 months before the next node or half node ramping up pushed prices down, as had been the case in the past.

I know we were behind the curve, for Moores Law, but, there wasn't expected to be enough VC or community money to catch up much before the 2016 reward halving.

What happened instead, with 28nm becoming unexpectedly cheap, was a stronger ASIC gold rush than might have been "organic" for bitcoin at the time. Many companies sprang up, and over-reached. This lead to relative oversupply, and thus prices attractive enough to attract huge commercial scale developments.

However, this might not have been all bad... since the innovative way Bitfury did 55nm, meant it competed well with most 28nm, so if it had not had that competition, we'd have a very pronounced monopoly of Bitfury hardware mining right now. However, BFL mayyyy have been able to do a 3rd or 4th revision of their 65nm, maybe even managed a 55nm shrink of it that was very short development time, and had that shipping from stock from early 2014, but the pressure and focus had switched to 28nm by mid 2013. Antminers would probably be about same proportion as now.

Anyway, this might be considered to give us 5x the hash we "should have had" by now, but it's not really that figure that counts, more the fact that it encouraged such overextension of commercial size mining ops and hardware investment. We might have had most of the same players, they'd be running 5x less hash, but they'd maybe only have half to a quarter as much debt to service. Bitcoin ASIC manufacturing might have become a more sustainable industry, rather than the apparent penis model, i.e. shoot your load and die.

Miners are the reason bitcoin are getting into the chain at the first place, how;s that killing, isn't that the opposite?

The problem supposedly is that currently there are too many miners operating in marginally profitable conditions and allegedly dumping coins on the market.

Well the mining ecosystem was designed to be a closed-loop feedback system with an inherent lag. Anyone who has studied control engineering will understand what is happening now. Eventually some miners will bail out and close shop and there may be less dumping of coins. I say may, because I don't really believe it is the miners doing the dumping. I am a small miner myself, with just under 50 TH/s and I have not sold a single coin since November.

I think we will start seeing consolidation of mining from the data centers that can afford to operate under these conditions. As smaller miners and farms throw in the towel and sell their equipment I see big data centers taking over even more of the network without formal acquisitions. Smaller mining operations just can't function at a loss for so long. just my .02.

Looks like this massive price deflation is going to kill them :D.

I find the reaction from some folks when they realize that BTC is pure capitalism hilarious.

The good news is that ignorance can be cured with education.
The bad news is that ignorance is seldom the only issue.

The good, the bad, and the ugly.
Welcome to Earth!

YMMV
:)

A miner Joe who keeps some of his bitcoins can be seen as two persons in one.  During the day he is Joe the Hasher, who mines bitcoins and sells all of them, pays the bills, and pockets the profit in dollars.  When he gets home he becomes Joe the Investor, who may buy  back some of the coins with some of the profit that the Hasher made.

The point is that Joe the Investor is just like any other investor.  He will buy, hold, or sell by the same reasons that motivate any other investor.  He has no more moral obligation to buy than any other investor. 

So it does not make sense to demand that miners keep their coins, or to curse them for selling them.  It is their right to seek their profit according to their estimates of the future price, like any other person on the planet.

I think bitcoin is not being implemented more quickly because it is still somewhat complex to use it. Once software and platforms become as easy as using a dollar or credit card, the reduction in transaction costs will attract more users, especially for international transactions where costs are high. The execution of a simple to use multisig trustless transaction will make international purchases a reality but these things take time...always longer than you think. Until then the speculators will make this a roller coaster ride.

imagine that your are a miner with a lot of BTC and you close your shop. what will you do? will you keep the useless BTC or will you cash it out as soon as possible? Yes, you will cash it out because it's a about a lot of money. In end, the money are better in a bank then in a "cold storage" from where it can disappear overnight :)

Yeah It is still really early in coins history.!!