ASIC Hoarders on the Loose? Is a 2nd Skyrocket in Rig Price Ahead?

[Stratobitz]

As we've all watched The Bitcoin price go from a crash low of roughly $160 to peaking out at over $400, and is now holding strong at $360ish as of December 3rd:

Many people who had turned off their mining rigs due to them being end of life and no longer profitable with electricity costs; are now holding mining gear that is in fact very profitable.

With the Block Halving approaching, and the BTC price currently on the upswing (no one knows of course where it's headed); do you see miners hoarding their gear, causing a skyrocket in price of mining rig equipment just like we saw 2 years ago with GPU's and other computer parts?

Supply and Demand dictates price. And yes, I shall admit (I know I know) - That when I first built my very first LiteCoin rig way back when; I did in fact pay $390 per Sapphire R9 280x.

At even today's price; there are many miners that would have been unprofitable 2 months ago; which are now back in decent profit when factoring the current price/electricity costs.

Also, keep in mind a large part of the miner "cost" is delivery/shipment due to weight. With that said; miners that are currently just sitting; turned off; are paid off, and could in fact be - MORE - profitable today; than purchasing a new current model miner; when factoring out the hardware costs; shipping costs, setup time, etc.

If you have any idea's for additional Answers to the Poll - just make the suggestion!

Cheers!

Strato

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[toptek]

I use a s3 still , may put one or two of my s1 back on line, once side hack comes out with his pods i may buy 5 of those .so yea keep what you have etc.  Block Halving won't hurt a thing it didn't hurt lite coins  there back up to 3 or 4 dollars a coin . I even have a half ass working  S5 I'm gonna keep, hoping to buy a A2 this Tuesday coming , Ive been buying coins to .  

[fr4nkthetank]

I feel rigs will maintain some price, but getting closer to the halving, roi times will be the same so...unless btc price go up, rig price will go down a bit.  I believe high price is massive accumulation, but I could be wrong.  Manufacturers will sell all the rigs they can on the current technology to milk the chips as much as they can, and delay as much as possible the advent of new more efficient miners.  that being said, I bought an s7 and I dont see how i will not ROI, unless btc crashes big. 

[spazzdla]

I use a s3 still , may put one or two of my s1 back on line, once side hack comes out with his pods i may buy 5 of those .so yea keep what you have etc.  Block Halving won't hurt a thing it didn't hurt lite coins  there back up to 3 or 4 dollars a coin . I even have a half ass working  S5 I'm gonna keep, hoping to buy a A2 this Tuesday coming , Ive been buying coins to .  

I am dying to buy one of those pod miners.  That usb stick they make is amazing.

[lightfoot]

When the halving happens mining profits will be... well halved. Unless bitcoin doubles in value mining gear value will drop. Likewise new mining gear will mean older less efficient gear will become worthless due to difficulty.

And of course remember that it's a perfect marketplace in a zero sum game,

So no, rig prices will not skyrocket. However the concept of a "universal rig" that can mine different types of coins *could* be a good idea. Banks and junk would buy them for their private blockchains, put your own chip on them with your particular altcoin hack and go.

Of course that's not a good idea for the banks......

[philipma1957]

When the halving happens mining profits will be... well halved. Unless bitcoin doubles in value mining gear value will drop. Likewise new mining gear will mean older less efficient gear will become worthless due to difficulty.

And of course remember that it's a perfect marketplace in a zero sum game,

So no, rig prices will not skyrocket. However the concept of a "universal rig" that can mine different types of coins *could* be a good idea. Banks and junk would buy them for their private blockchains, put your own chip on them with your particular altcoin hack and go.

Of course that's not a good idea for the banks......

zero sum game only applies if you can live for about two hundred  more years.

[adaseb]

Mining is EXACTLY as profitable now as it was for most of the year 2015 due to the large difficulty rise.

The reason why its hard to buy ASICs is for 3 reasons,

1) Bitmain pretty much controls the market price for miners. Since the S7 is very expensive, it makes the older generation models also expensive.

2) Price has doubled from the average price of 2015, so many are speculating that in the near future price might go even higher, so they are keeping their gear and watching what happens.

3) The halving which will take place in 6 months or so should cause the price to double. So many are keeping their coins until that happens. For example, average price was $225 USD so many think it will be stable around $450 USD or so.

[notlist3d]

Many people who had turned off their mining rigs due to them being end of life and no longer profitable with electricity costs; are now holding mining gear that is in fact very profitable.

This part I think is a small section.  Very few just turn off the machine and let it collect dust.  It is where a miner most likely has multiple homes during it's life for most.

The person who is early adopter with high to normal electrifcity, sells to low to free electricity after using it till they are happy.  It can add a decent amount to ROI to sell the rigs.   I personally do sell all my old rigs.

[Amph]

not exactly the same profit, but it sure tht it is more profitable, take a look at the s5 its profit it was 0.011 at peak in january 2015, now it's 0.008

but bitcoin is 350 vs 230, so there are a small gain versus what it was in the past, the diff did not catch up with the price increase

we were at $2.30 in profit for the past against $3.00, there is at least 16% for gain now than what it was in the past

[crazyivan]

I see no problem there, it s like any other industry, supply and demand. The price goes up, miners get turned on, diff goes up to compensate. It s a very competitive market.

[lightfoot]

There's no problem, it is a very close to *perfect* marketplace with *perfect* competition, as close as you're going to get.

   

• Perfect market information--Yep, Bitcoin is transparent. Everyone knows what everything is to the second.
  
     
• No participant with market power to set prices--Yep, I can't charge more for my mining abilities over anyone else, as the product (hashes) has no added value. For a pool, if they set prices or fees too high people leave. Poof. If a mining company charges too much a new mining company will come in (assuming the profits are high enough). But with the glut of mining stuff out there this is not too much of a problem.
• Non intervention by governments--Pretty much. They're trying though, but at the moment it's pretty simple to mine.....
• No barriers to entry or exit--Not really. You can get into the market for the cost of a miner and a PC. Very little licensing, factory making, whatever...
• Equal access to factors of production--This might be the difference if miners consolidate. However someone else could just build another miner from silicon.
• Profit maximization--Fuck God Yes!
• No externalities--Everyone's gotta pay something for power and/or heat disposal.

So with that, I think this quote sums it up best from Wikipedia:

This attribute of perfect markets has profound political and economic implications, as many participants assume or are taught that the purpose of the market is to enable participants to maximize profits. It is not. The purpose of the market is to efficiently allocate resources and to maximize the welfare of consumers and producers alike. The market therefore regards excess profits, or economic rents, as a signal of inefficiency, that is of market failure, which is to say, not achieving a Pareto optimum.

And given that this is normal profits, the following from "Profit (normal)" really should be read by any miner:

Economic profit does not occur in perfect competition in long run equilibrium; if it did, there would be an incentive for new firms to enter the industry, aided by a lack of barriers to entry until there was no longer any economic profit. As new firms enter the industry, they increase the supply of the product available in the market, and these new firms are forced to charge a lower price to entice consumers to buy the additional supply these new firms are supplying as the firms all compete for customers (See "Persistence" in the Monopoly Profit discussion). Incumbent firms within the industry face losing their existing customers to the new firms entering the industry, and are therefore forced to lower their prices to match the lower prices set by the new firms. New firms will continue to enter the industry until the price of the product is lowered to the point that it is the same as the average cost of producing the product, and all of the economic profit disappears. When this happens, economic agents outside of the industry find no advantage to forming new firms that enter into the industry, the supply of the product stops increasing, and the price charged for the product stabilizes, settling into an equilibrium.

Fun stuff.