How do you incorporate this into your business model?
I jsut figured out it will be quite disrubpive - cashflows will at least half overnight.
I am anticipating that by the next block bounty drop block bounty will be < 50% of block reward due to fees, which will mitigate this to some extent.
Because the pros run the numbers and anticipate the bounty drop, they will not over invest in hashing infrastructure, and we will not race ourselves past the point of hash level collapse. I expect that some overzealous miners will bankrupt themselves, but that most of us can use a spreadsheet, and understand bitcoin well enough to anticipate the change.
Right now I make 600% RIO, that's not shabby as an investment, but it's unrealistic to expect it to stay that high. People who got in too early and now have outsized expectations will probably drop out, but still makes good business sense to invest in this if you are not terribly risk adverse.
My business plan is pretty simple:
while RIO > 200% :put 1/2 of net into expanding hardware
when ROI < 200% & > 50% : just keep what you got running, invest in more stable assets
when ROI < 50% keep running the numbers to make sure that keeping the rigs on is not losing money, then move to providing some other GPGPU service.
In reality I expect the ROI to stabilize a little over 200% for the next 12 months, and then slowly, over the next two years, as trust in the market increases, to move to 50%. 50% is not great ROI for an uninsurable investment, but it is surely good enough for pros to keep the lights on.
For this calculation I really don't care what the generation rate or USD price are, except as they multiply to a good ROI. For Pros the ROI is what determines the size of the mining pool, nothing else, and while everybodies calculations will be different based on their hardware and overhead, most of the miners will be making the same assessments, and creating a feedback loop by dropping out/buying in tending towards the most cost effective investments.