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valta4065
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February 10, 2016, 11:05:15 AM |
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Just because there is no price increase during halving one can't say that bitcoin is dying. This time the scenario might be the same, there might be no price increase during halving as the current market situation of china is worse than how was it during the last years halving
Hmm... Yes one can. As it will mean the miners are going to die as they won't earn enough to cover their expenses, which will mean they will stop mining which will mean btc is going to die :p Am I not getting something? You are not getting something. "The miners" are not a homogenous group. Different miners have different fixed costs, different variable costs. They will not stop mining as one big group. The block reward reduction will not come as a total surprise to them - they will have been aware of it just as long as everyone else - and when they determined their own, individual, ROI they will have taken the reduction into account. The most marginal miners may stop mining - but all that means for the remaining mass of miners is that difficulty will decrease. OOOOOOOOOOOOOOOOH! I was not getting something xD So it means that difficulty is directly linked to the amount of miners in action? Does that mean that we absolutely don't need so many miners? Do we know how many miners we actually need to secure the transactions? Not directly linked to the amount of miners, but indirectly through hash power. As the computational power of the network changes, blocks are found more or less frequently. Every 2016 blocks the difficulty changes to keep the rate at which blocks are found close to one block every 6 minutes. Computational power is what matters, not the amount of miners. Given two mining operations with the same computational power - one a mining pool and the other a vast mining operation owned and operated by one very wealthy individual - there's no computational difference to the network between the two operations (i.e. the probability of either operation finding a block is the same), even though the mining pool aggregates numerous small miners. Ok so the more hashpower the higher the difficulty. And how much hashpower do we need to get the whole network working? Is the difficulty always balancing everything so it'll always be profitable for enough miners to mine? |
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LMGTFY
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February 10, 2016, 11:51:28 AM |
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Ok so the more hashpower the higher the difficulty.
And how much hashpower do we need to get the whole network working? Is the difficulty always balancing everything so it'll always be profitable for enough miners to mine?
The difficulty is always balancing everything, yes. This is based on a period in which 2016 blocks are found - this should take roughly 14 days, or about 10 minutes per block. If, on average, it takes more than 10 minutes per block then difficulty will decrease proportionately. If it takes less than 10 minutes on average then difficulty will increase. These changes in difficulty obviously impact the most marginal miners, "encouraging" them to start or stop mining. This will then feed into the calculation for the next 2016-block period. The whole network has worked on comparatively little hashpower - this graph shows (on a log scale) how the power of the network has grown over the last 6-7 years. Ignoring the early days, when difficulty was kept higher than you might expect, difficulty has always tracked hashpower (with a 2016-block lag). Hashpower has occasionally fallen, and difficulty has fallen to match it (there are a few examples during April-June 2015). However, as difficulty fell marginal miners suddenly found that they could mine for a (small) profit, and started mining, increasing hashpower again, and (2016 blocks later) difficulty rose again. In the long-term BTC won't exhibit supply inflation, so giving BTC to miners finding blocks isn't tenable in the long-term. However, miners will always need some sort of reward for maintaining the network. For this reason Bitcoin has built in a process to encourage a market in transaction fees, and to encourage an increase in transactions fees and less reliance on block reward the block reward is periodically reduced (every 210,000 blocks the block reward is halved). Incidentally, this is the reason why difficulty changes don't happen precisely every 14 days, and the block reward reduction doesn't happen precisely every 4 years - because changes are based on blocks being found, not on time, and the rate at which blocks are found tends to be faster than 1 every 10 minutes. |
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valta4065
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February 10, 2016, 05:47:36 PM |
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Ok so the more hashpower the higher the difficulty.
And how much hashpower do we need to get the whole network working? Is the difficulty always balancing everything so it'll always be profitable for enough miners to mine?
The difficulty is always balancing everything, yes. This is based on a period in which 2016 blocks are found - this should take roughly 14 days, or about 10 minutes per block. If, on average, it takes more than 10 minutes per block then difficulty will decrease proportionately. If it takes less than 10 minutes on average then difficulty will increase. These changes in difficulty obviously impact the most marginal miners, "encouraging" them to start or stop mining. This will then feed into the calculation for the next 2016-block period. The whole network has worked on comparatively little hashpower - this graph shows (on a log scale) how the power of the network has grown over the last 6-7 years. Ignoring the early days, when difficulty was kept higher than you might expect, difficulty has always tracked hashpower (with a 2016-block lag). Hashpower has occasionally fallen, and difficulty has fallen to match it (there are a few examples during April-June 2015). However, as difficulty fell marginal miners suddenly found that they could mine for a (small) profit, and started mining, increasing hashpower again, and (2016 blocks later) difficulty rose again. In the long-term BTC won't exhibit supply inflation, so giving BTC to miners finding blocks isn't tenable in the long-term. However, miners will always need some sort of reward for maintaining the network. For this reason Bitcoin has built in a process to encourage a market in transaction fees, and to encourage an increase in transactions fees and less reliance on block reward the block reward is periodically reduced (every 210,000 blocks the block reward is halved). Incidentally, this is the reason why difficulty changes don't happen precisely every 14 days, and the block reward reduction doesn't happen precisely every 4 years - because changes are based on blocks being found, not on time, and the rate at which blocks are found tends to be faster than 1 every 10 minutes. This is... Incredible! Thanks a lot for your explanations! That truly gives a better idea of why Btc is really sustainable on the long term. Because mining has been more and more difficult only because of concurrence, as soon as some miners can't mine anymore it will become a bit easier. It's just plain genius, I knew btc was cool but that's awesome ^^ I just have one last remaining question though, how much hashpower is needed at least to mine correctly the blocks? Which means under which amount of hashpower will the tx not be confirmed correctly? Cause that means as long as it's profitable to run this amount of hashpower, we don't really need to rise the fees or the btc price! Anyway thanks again for all those clear explanation!!!! |
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fravia
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February 10, 2016, 07:26:54 PM |
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well the interest of ordinary people in bitcoin would surely go down a lot and people wouldnt be that active when it comes to bitcoin, i think that would be a very bad thing though thats just my opinion
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snipie
Legendary
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Activity: 3150
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February 10, 2016, 07:42:37 PM |
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Normally the price should increase, well not immediately but after a few days or months, in case it didn't then there will be a serious problem especially for miners imo
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dothebeats
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Cashback 15%
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February 10, 2016, 08:02:25 PM |
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Small time miners would probably halt their operations since the amount of bitcoins they get in mining cannot compensate their operating costs. From what I see, some hashing power might be removed from the network and those who have large farms and such would stay.
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g-unit
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February 11, 2016, 12:51:53 PM |
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What is the current break even price per coin for miners right now? Big miners and smaller miners? Someone said for big miners, like Chinese farms, it was $180 per coin. But that was a while ago I think.
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vendetahome
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February 15, 2016, 04:58:23 PM |
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miners won't mine anymore i guess, also people will sell of of theird bitcoins so price will fall down
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2legit2
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February 17, 2016, 07:24:11 AM |
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it will rise anyway, becouse of people panic, and also yeah, miners should quit their jobs becouse it wont bring them any profit
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Juhagic
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February 18, 2016, 10:42:34 AM |
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miners won't mine anymore i guess, also people will sell of of theird bitcoins so price will fall down
If there is no price rise after the halving, the miner will not mine, the difficulty will not rise. Only the most efficient miner can mine. |
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bearex
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February 18, 2016, 11:20:44 AM |
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That would mean the ammount of people buying bitcoin is the same/smaller, and that it needs further promotion so more people come and the price increases.
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Juhagic
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February 20, 2016, 10:15:48 PM |
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That would mean the ammount of people buying bitcoin is the same/smaller, and that it needs further promotion so more people come and the price increases.
The price of bitcoin is related to the popularity of the bitcoin. The more people use it , the higher the price. |
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kartaggen
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February 20, 2016, 10:44:22 PM |
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That would mean the ammount of people buying bitcoin is the same/smaller, and that it needs further promotion so more people come and the price increases.
The price of bitcoin is related to the popularity of the bitcoin. The more people use it , the higher the price. Yeah and it also depends on the circulation of bitcoins, if bitcoins are more circulated the price would rise and if people just keep on holding it the price would relatively fall down. |
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Pab
Legendary
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Activity: 1862
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February 21, 2016, 03:08:07 AM |
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Price will rise up to halving after will drop,there is always like that
But halving is not most importent for Bitcoin
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pumawolf
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February 21, 2016, 04:44:06 AM |
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top tier miners or low price eletricity will cont to mine, the shittyer machines will drop off, diff will drop . bussiness as usual
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7Priest7
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February 21, 2016, 05:59:00 PM |
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well it will create a massive panic for all bitcoin users, probably they will sell all of their bitcoins fast as possible so price will fall down each day
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Juhagic
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February 22, 2016, 12:05:59 PM |
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top tier miners or low price eletricity will cont to mine, the shittyer machines will drop off, diff will drop . bussiness as usual
The difficulty might not drop. The old miners will replaced by new miners which have higher efficiency. |
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Amph
Legendary
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Activity: 3206
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February 22, 2016, 12:26:43 PM |
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top tier miners or low price eletricity will cont to mine, the shittyer machines will drop off, diff will drop . bussiness as usual
no diff will not drop, because the cheap electricity miners, will add more miners to replace those shitty electricity miner there is no returning on the previous diff, it's always going up by average each year |
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stoat
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February 22, 2016, 01:05:35 PM |
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There will be no price rise on the halving.
All new money in crypto is flowing in to ethereum.
Chinese farms will hopefully go bust.
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n0ne
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February 22, 2016, 02:03:44 PM |
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well it will create a massive panic for all bitcoin users, probably they will sell all of their bitcoins fast as possible so price will fall down each day
But I think, there is nothing to get panic. These days the effects of halving can be experienced over the increasing price of the bitcoin. |
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