Would it still be profitable if bitcoin goes down to $1 a bitcoin?

[sgk]

If bitcoins were $1:  I could either pay the electric company $10 a day to run my miners to generate 0.09 btc per day or just buy 10 btc for $10. 

I could have 10 bitcoins by buying or 0.09 bitcoins by mining.  Of course, the obvious choice is buying.

At $1 price, many miners would have turned off their rigs and the difficulty would drop, so you'd make much more BTC than 0.09 by mining.

[envy2010]

The 2048 blocks still have to be solved at high difficulty before a readjustment, regardless of how many miners turn off their rigs. If enough miners shut down due to lack of fiat income, the readjustment could go from weeks to months to years as the block times get longer and longer (and confirmation times also get VERY long, essentially killing the coin).

[taipo]

Lets take a miner with a single Antminer S1 - 180 Ghs who decides to continue mining even though its only $1 USD per BTC. Also keep in mind the price would probably decline to $1, not just go from $440 to $1 in one day and stay there forever.

Current Difficulty: 8,853,416,309
Current BTC per day: 0.01022
Current BTC USD$: 400 ( is more, but $400 for this exercise )
Income for this miner in USD$: $4.00

As other mining operations shutdown - go bust, the difficulty and network hashrates and difficulty would plummet at first, then taper off gradually dropping, but the BTC mined per day would react to the balance between the difficulty and may counter balance the drop in $$$ value.

So lets half the stats:

Difficulty: 4,426,708,154
BTC per day: 0.02044
BTC USD$: 200
Income for this miner in USD$: $4.00

Half it again:
Difficulty: 2,213,354,077
BTC per day: 0.04088
BTC USD$: 100
Income for this miner in USD$: $4.00

This time, divide by 10
Difficulty: 221335407
BTC per day: 0.4088
BTC USD$: 10
Income for this miner in USD$: $4.00

And divide by 10 once more to get $1
Difficulty: 22,133,540
BTC per day: 4.088
BTC USD$: 1
Income for this miner in USD$: $4.00

The point for miners is, its not the value in $USD per BTC, but the mining hashrate to difficulty balance, that matters.

If for example this ficticious event happens at $1 where difficulty drops to a million:
Difficulty: 1,000,000
BTC per day: 90.47
BTC USD$: 1
Income for this miner in USD$: $90.47

So you can see that as long as mining continued, blocks would continue to be discovered and at a faster rate but would be worth less in the conversion to cash. Transactions would still take place, although probably take longer to process. etc etc.

And as things go, if this last event did happen, miners who had exited the game would turn their miners back on again until the difficulty went up sufficient enough for them to be earning ( in the case of the Antminer S1 ), $4.00 a day again.

By no means a perfect example, but just a scenario and how it could pan out.

[kthejung]

If bitcoins were $1:  I could either pay the electric company $10 a day to run my miners to generate 0.09 btc per day or just buy 10 btc for $10. 

I could have 10 bitcoins by buying or 0.09 bitcoins by mining.  Of course, the obvious choice is buying.

At $1 price, many miners would have turned off their rigs and the difficulty would drop, so you'd make much more BTC than 0.09 by mining.

great job of unnecessarily exploiting a different angle.  If there was a reason to mine rather than buy at $1, then the difficulty would go back up and therefore this whole made-up scenario is senseless; as it always was.

[taipo]

If you bothered to read the whole thing you would see that was covered as well.

Apologies kthejung, I see you weren't talking to me.

[sgk]

If bitcoins were $1:  I could either pay the electric company $10 a day to run my miners to generate 0.09 btc per day or just buy 10 btc for $10.  

I could have 10 bitcoins by buying or 0.09 bitcoins by mining.  Of course, the obvious choice is buying.

At $1 price, many miners would have turned off their rigs and the difficulty would drop, so you'd make much more BTC than 0.09 by mining.

great job of unnecessarily exploiting a different angle.  If there was a reason to mine rather than buy at $1, then the difficulty would go back up and therefore this whole made-up scenario is senseless; as it always was.

I could argue that you're trying to be rude, but I'd rather continue the discussion in a sane manner.

Some people prefer mining over trading. Maybe not you but some do. They don't want to go through all that KYC bullshit. They also don't trust exchanges with their BTC, you don't know when you can be Goxed. Mining keeps your BTC with you without being seen by government.

[fattypig]

Would it still be profitable if bitcoin goes down to $1 a bitcoin?

Definitely no. As there would be no point in mining. You would pay more for electricity to keep your computers working. There's no profit in such approach. Then, what would be the difference between USD and BTC?

Everyone would do that and you can turn back on after difficulty adjusted ..

[mikerbiker6]

The 2048 blocks still have to be solved at high difficulty before a readjustment, regardless of how many miners turn off their rigs. If enough miners shut down due to lack of fiat income, the readjustment could go from weeks to months to years as the block times get longer and longer (and confirmation times also get VERY long, essentially killing the coin).

If this change in price happens very fast, maybe miners don't notice it before the next difficulty change.
Miners turn of their equipment but there are only a few blocks left till difficulty change.
This is also a possible senario.

[nickenburg]

I dont think it would be profitable anymore,
But thats why it can never reach such a price anymore.
The cost to mine them is to much, so less people will sell bitcoins.
Because they will sell at a loss otherwise.