Is a very large miner trying to corner the mining market?

[kendog77]

Think about this for a second.

A very large, well financed mining company could do the following:

- Hoard many mined coins for a while.
- Deploy a massive amount of new hardware, which pushes the difficulty up substantially.
- Dump many hoarded coins on the market at once and push the price of BTC down.
- Laugh all the way to the bank as many smaller, less financially secure competitors fold, thus leaving a bigger slice of the BTC mining pie to themselves.

KNC and BitFury both likely have enough resources to pull off the above scenario and drive many competitors out of business.

[qwk]

Think about this for a second.

A very large, well financed mining company could do the following:

- Hoard many mined coins for a while.
- Deploy a massive amount of new hardware, which pushes the difficulty up substantially.
- Dump many hoarded coins on the market at once and push the price of BTC down.
- Laugh all the way to the bank as many smaller, less financially secure competitors fold, thus leaving a bigger slice of the BTC mining pie to themselves.

KNC and BitFury both likely have enough resources to pull off the above scenario and drive many competitors out of business.

Market manipulation comes at a price.
That price has to be paid by the manipulator alone.
The profit, though, does never go to the manipulator in its entirety.
That's why, in a nutshell, market manipulation is not profitable.

[kendog77]

Think about this for a second.

A very large, well financed mining company could do the following:

- Hoard many mined coins for a while.
- Deploy a massive amount of new hardware, which pushes the difficulty up substantially.
- Dump many hoarded coins on the market at once and push the price of BTC down.
- Laugh all the way to the bank as many smaller, less financially secure competitors fold, thus leaving a bigger slice of the BTC mining pie to themselves.

KNC and BitFury both likely have enough resources to pull off the above scenario and drive many competitors out of business.

Market manipulation comes at a price.
That price has to be paid by the manipulator alone.
The profit, though, does never go to the manipulator in its entirety.
That's why, in a nutshell, market manipulation is not profitable.

Agreed, but it in case, it would be short term pain for long term gain if they were able to take out most of their competitors.

[SMB-2525]

Irrespective of whether a particular operation "folds" the hardware is an asset that will be kept working by the creditors for as long as it cash flows positive.

[RoadStress]

KnC is too stupid to do that. Bitfury can do that, but they are not too stupid to dump a lot of coins to crash the market.

[g-uid]

Quite a smart tactic. I would think twice before dismissing major players the likes of KNC.

They've shown in the past just how sneaky they can be with their own clients, so if the attack makes sense and they have the cash to carry them (they do -- see their recent Venture Capital funding rounds) then why not do something like this to wipe out their competitors?

[kendog77]

Irrespective of whether a particular operation "folds" the hardware is an asset that will be kept working by the creditors for as long as it cash flows positive.

True, but you could cripple your competitors ability to invest in R&D for next generation mining hardware, which is essentially a death sentence in this industry.

[fewcoins]

Yes, This has already happened! I have joined in on the selling just hoping to not get crushed!! All the miners & big holders of BTC are trying to crash the price to below $100 so they can buy more!

[bassclef]

Quite a smart tactic. I would think twice before dismissing major players the likes of KNC.

They've shown in the past just how sneaky they can be with their own clients, so if the attack makes sense and they have the cash to carry them (they do -- see their recent Venture Capital funding rounds) then why not do something like this to wipe out their competitors?

Because it would require more staff and a large amount of risk. These ASIC companies are already stretched pretty thin.