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It doesn't work quite the way you think it does.
Mining involves repeatedly computing the double SHA-256 hash of the block header until a hash is found that is less than the target value. Before each repetition, the block header is modified in order to come up with a different hash. There are three values in the block header that the miner can modify before computing a hash: the timestamp, the nonce, and the merkle root hash.
The nonce and the timestamp values are trivial to change, but the merkle root hash is much more costly to change. So, I imagine that all miners do it the same way: change the merkle root hash only after all of the possible combinations of timestamps and nonce values have been tried. If not, then perhaps they should. (Note: I'm not an expert on mining software)
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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 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. |
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What's also a big problem is the so called btc whales, not the investors, but the innovators. They use their Bitcoin for all sorts of twisted things, instead of just investing to get bitcoin to a higher level. It's all about greed, just like the fail of communism, the system is perfect, yet man isn't...
One day, I would like one of you Don Quixotes to actually name a "whale", and show how they used "their Bitcoin for all sorts of twisted things". I doubt it will ever happen because I doubt that these Dr. Evil's exist. |
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Your premises are flawed. Very little of what you wrote can be substantiated by facts. You need to show some supporting evidence before you can claim that others are lying. But the fact is that MASS ADOPTION WILL NOT COME with actual volatility.
Like it or not, that is not a fact. Since your entire argument is based on this supposed fact, you will need to prove it before anyone can accept your conclusion. any currency needs a stable value to work. And bitcoin will never be able to do it, because IT'S NOT DESIGNED FOR THAT.
Your claim that "it's not designed for that" is simply not sufficient to support either statement. The problem is that, as a speculative asset, it's controlled mainly by speculators, whose are interested in high volatilities. This high volatility scares the mass, and without their support, bitcoin will not be a currency. I won't be able to buy oranges, computers or houses with them, because people will not accept this what they call "scam".
More unsubstantiated claims and speculation. The only solution would be to drive out the speculators of the market, but that's simply IMPOSSIBLE.
Is that the "only" solution to the supposed problem, or is it the only one that you can think of? Maybe a smarter person could come up with a good solution to your non-existent problem. the problem is BITCOIN distribution and value process, it's not designed to be a currency.
Oh, now it's a problem of distribution! The complaining about early adopters has been going on for years now and it is totally bogus. |
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10 minutes ago you had 1.7402113 BTC
Right now you have 1.7402113 BTC
10 minutes in the future u will still have 1.7402113 BTC
The only thing that changed is a third party's estimate of what that 1.7402113 BTC is worth.
Also, different people and sites have different estimates. |
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how much have you lost?
You don't lose till you sell. No, that's delusional. You have to value your assets at market. Let's say you had $1000 and you bought one bitcoin and now it is worth $200. There are two ways to look at it without being delusional: 1. You have $0 and 1 bitcoin, but "you don't lose until you sell". In this case, you lost $1000 when you bought the bitcoin. According to you, you have a bitcoin that has no value until you sell it. You have $0 plus a bitcoin worth nothing, so you lost $1000. You may gain some money back when you sell the bitcoin, but in the meantime you lost $1000. 2. Mark-to-market: you have $0 and $200 worth of bitcoins. In this case you effectively have $200 because you can exchange the bitcoin for $200. You lost $800. |
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Those 12 words are the key to recovering your bitcoins. Even if you don't remember where or how you set up your wallet, you can set up a new wallet using those 12 words to recover the bitcoins. Several wallets have that ability. Try electrum. My guess is that it is blockchain.info. Try entering your 12 words here: https://blockchain.info/wallet/forgot-password |
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Let me be the first to answer your question. TL;DR: Exchanges and prices are a lot more complicated than you think. There is no "current price". The prices on each exchange are different from those on every other exchange. What you are referring to as the "current price" is either: - the price of the last trade on a particular exchange, or
- an average of prices of trades on several exchanges.
So, it is not at all unusual that the price on your exchange is different than your "current price". Furthermore, there is actually no "current price" on an exchange. There are two prices: - the "bid" price, which is the highest price that buyers have advertised, and
- the "ask" price, which is the lowest price that sellers have advertised.
If you want to buy immediately, you can buy at the ask price. If you want to buy at a particular price your price gets added to the list of bids, and someone will sell to you at your price when it becomes the highest of all the bids. |
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When Coinbase asked you to confirm that you were paying $2999, why did you click YES? |
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Get over it. People were complaining about "early adopters" in 2011: https://bitcointalk.org/index.php?topic=25138.0. Now, those people that were complaining are themselves considered early adopters. As long as the value increases, people will be complaining about early adopters. At some point everyone reading this post will be considered an early adopter. |
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Am I the only one who doesn't get how miners think they have to shut things down the moment Bitcoin becomes unprofitable? Do gold miners quit mining because they haven't found gold in a few weeks and are not making much money?
What is the point to mining but to speculate, if I dropped out of crypto everytime I made a loss then the market would go nowhere. This is capitalism, nothing in life is certain and handed to you on a silver platter. Write it off on your taxes and hold your coins and hope for next month to make up your losses and then osme.
Asic manufacture has much lower cost than average miners. But I doubt they can continue production any longer if price stay this low. They will have to drop their prices, but as long as the price of the miner is more than the manufacturing cost, they will keep pumping them out. |
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Isn't that what I already said?
Well, I was nitpicking. The "problem" is the statement "Find a value of B such that ...", but the "hashing" is what miners do to find the solution. |
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Since this is the beginners and help section, lets nitpick a bit, shall we?
Sure. You don't mind if I "nitpick" your nitpicking, do you? No! Its not a mathematical problem and no solution to a problem is found. Its not even difficult to perform. This bad metaphor made it hard for me to understand PoW in the beginning.
The basic Idea is that the mining node (usually called "miner") is hashing certain information of the block.
And "hashing" is performing a specific set of mathematical steps, which could be described as "a mathematical problem", right? I hope you don't mind if I nitpick your nitpicking of the nitpicking. There definitely is a mathematical problem that is solved, and the problem is this:
Find a value of B such that SHA256(SHA256(B)) <= T, where B is the block header and T is the target value.
The only known method for finding a solution to the problem is brute-force guessing, so that is what miners do. |
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You try hard to make stupidity sound so noble. Do you make trades that you know are bad? Why not? You are a trader! How can you shirk your responsibility to trade even if you know you are going to lose money!
Of course I don't make trades that I know are bad, you won't know they will be bad until days or weeks later and can only go off your gut feeling or market analysis. How many people lost their shirts on Blackcoin thinking it was the next LTC? Does that mean everyone who lost money on that should exit the crypto game for good? Likewise, miners stop mining when they know they are going to lose money. But I will still buy a coin knowing full well I won't make money on it or recover my loss potentially weeks or months down the road. I'm just saying many miners have lost the speculative attitude of crypto, for all they know they could mine at a loss now but Bitcoins price could jump up 2x or 3x or more next month and instead of making ANY money/coins they will wish they had had those coins. Mining is a way to acquire bitcoins at a discount. Speculation on future value is a completely different issue. If a miner can acquire a bitcoin at a cost of $300 through mining, or they can acquire a bitcoin at a cost of $180 from a trader, they will stop mining and buy the bitcoin from the trader. |
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You try hard to make stupidity sound so noble. Do you make trades that you know are bad? Why not? You are a trader! How can you shirk your responsibility to trade even if you know you are going to lose money!
Of course I don't make trades that I know are bad, you won't know they will be bad until days or weeks later and can only go off your gut feeling or market analysis. How many people lost their shirts on Blackcoin thinking it was the next LTC? Does that mean everyone who lost money on that should exit the crypto game for good? Likewise, miners stop mining when they know they are going to lose money. |
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Judging from your post, I assume that you must have a room full of ASICs mining away, supporting the network. If not, then why not?
I don't mine, i'm a trader. But I don't walk away from trading just because I make a few bad trades, lose some money and call it quits. Why are miners expected to break even every single day 100% of the time any more than I am? If a mining company has been losing money for a few months straight then yes I would see the reason for shutting it down, but walking away just because they dipped into the unprofitably stage for less than a few weeks is silly. There are restaurants that can run in the red for months at a time before they finally shut down and their line of credit is dropped. If you claim to run a business then act like one and take the risk otherwise go get a job working for someone else. You try hard to make stupidity sound so noble. Do you make trades that you know are bad? Why not? You are a trader! How can you shirk your responsibility to trade even when you know you are going to lose money! |
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Am I the only one who doesn't get how miners think they have to shut things down the moment Bitcoin becomes unprofitable? Do gold miners quit mining because they haven't found gold in a few weeks and are not making much money?
Well, gold miners do shut down their mines if mining is no longer profitable. Judging from your post, I assume that you must have a room full of ASICs mining away, supporting the network. If not, then why not? |
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Considering that the daily volume is ~350,000 coins and total miner reward is 3,600 coins, it might be a small piece of the puzzle... but the lower the price goes, the more coins the miners have to sell to keep operating (space, electricity, network connection etc). Is it a vicious cycle?
No because even if miners eventually have to sell all their coins and that is still a small amount. |
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Check out localbitcoins.com
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I generally agree with all of that. But why I personally think price is the biggest determinant is because high price is what's attracting the average joe, not the technical aspect of bitcoin. Price has a larger impact on headlines than any other characteristics of bitcoin.
That kind of thinking is what causes bubbles. It is not sustainable and it is not beneficial to Bitcoin. The value of Bitcoin lies only in its usage and its utility. If usage and utility of Bitcoin grows, everything else (including price will follow). If usage and utility go to 0, then so will the price. |
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