What happens to Chinese mining companies if there is no halving price rise?

[kwukduck]

It's almost certain that the bitcoin network will collapse after the great disappointment of the halving. I explained all the reasons before.

[pooya87]

nothing will happen to them even if the bitcoin price stays the same as it is right now. they are earning a lot of money each day and that is while they have access to somewhat cheap electricity.

[techgeek]

They still get paid daily as mentioned.

I`m sure it wont hurt them at all. Unless bitcoin really dropped back to the $100 valuation or something drastic then they would force to downsize.

Most already made back their money I`m sure.

[Yakamoto]

They still get paid daily as mentioned.

I`m sure it wont hurt them at all. Unless bitcoin really dropped back to the $100 valuation or something drastic then they would force to downsize.

Most already made back their money I`m sure.

I'd say that it is most likely for most of the miners to have made their money back at this point, but there may still be other things in the background that they have to pay for. The good news is, however, they have a massive infrastructure system to work with, and thus likely won't have to worry about not mining enough.

I think anything below $250 would probably force a lot of industrial miners out of the Bitcoin economy, but we hopefully aren't looking at any values as low as that in the near future.

[lumeire]

They still get paid daily as mentioned.

I`m sure it wont hurt them at all. Unless bitcoin really dropped back to the $100 valuation or something drastic then they would force to downsize.

Most already made back their money I`m sure.

While it's true that the halving wouldn't hurt them all, a huge chunk of them would probably stop mining if there isn't a compensation in the fees or the price of BTC. Only those with real cheap electricity, like BitMain, would be able to continue for a while.

[romero121]

Nothing would happen wrong, because they get a good profit with the normal growth and when halving occurs a small growth will be there as stable. This would never affect miners as they won't much think about the pricing as they depend for stable income on transaction.

[johnyj]

similar to a couple of difficulty jump

[uki]

change of the coins available in the block is one thing, diff the other. If the diff drops down they will be able to mine more blocks and thus get their numbers as planned. Shouldn't be a big deal for them.

[mobnepal]

Will they go under?  Can they survive on half the amount of income?

I think they can survive on half the income, the price remained around 200-220 for a lot of time last year, they did survived that and technically it will be just like that if price doesn't goes up.

25*220=5500
12*420=5040

Not that big difference, though the price should go up but if they decide to stop their operations, their place will be taken by others.

It is not easier for other to take place of them as it need lots of investment to run mining farm.

If majority of those chinese miners decide to hold and pump price a little bit than price will be moved almost doubled due to other trader's phycology and greed.

[Amph]

Mayby this is a stupid question, but is this the first block halving ever?
If it has happened before then I don't understand why people always stress about it.

because it is not the same thing, the first havilgn was not seen as a great thing because, it was from 50 to 25 and because the user base for bitcoin was very small back then, no comparison at all

each halving is much stronger than the previous one, you will se the next halving(6.25) will be much more prominent than this one

Are you saying the risk increases (exponentially?) with every block reward reduction? I'm sceptical, to be honest. Post-halving, less efficient miners may stop rising - if that happens difficulty will fall, miners will (re)enter, difficulty will adjust, and the system will settle to a new equilibrium once again. What scenarios would prevent equilibrium?

I'm not sold on the idea that the first halving was no big thing, or that future halvings will be more prominent - but at this point we've only had the one halving, so we honestly don't know. I'd expect the importance of the block reward reduction to decline with each halving (as the proportion of block reward to transaction fees changes), but that presupposes a mature market in transaction fees. Why is it you think halvings will increase in strength?

you need more demand to sustain the price now than before, before was very easy to manipulate the value the scene was very small

so yes i kinda think that the risk is greater now, compared with before and it will be greater at each halving, but this does not mean that the halving will have less impact

[LMGTFY]

Mayby this is a stupid question, but is this the first block halving ever?
If it has happened before then I don't understand why people always stress about it.

because it is not the same thing, the first havilgn was not seen as a great thing because, it was from 50 to 25 and because the user base for bitcoin was very small back then, no comparison at all

each halving is much stronger than the previous one, you will se the next halving(6.25) will be much more prominent than this one

Are you saying the risk increases (exponentially?) with every block reward reduction? I'm sceptical, to be honest. Post-halving, less efficient miners may stop rising - if that happens difficulty will fall, miners will (re)enter, difficulty will adjust, and the system will settle to a new equilibrium once again. What scenarios would prevent equilibrium?

I'm not sold on the idea that the first halving was no big thing, or that future halvings will be more prominent - but at this point we've only had the one halving, so we honestly don't know. I'd expect the importance of the block reward reduction to decline with each halving (as the proportion of block reward to transaction fees changes), but that presupposes a mature market in transaction fees. Why is it you think halvings will increase in strength?

you need more demand to sustain the price now than before, before was very easy to manipulate the value the scene was very small

so yes i kinda think that the risk is greater now, compared with before and it will be greater at each halving, but this does not mean that the halving will have less impact

Ah, you're talking about the risk of price falling, I think? I'm not sure I'd see that as a risk so much as business-as-usual. I was thinking more along the lines of the risks hinted at by the OP, of an existential risk to the protocol itself (a risk I personally think is minimal and overstated).

[600watt]

no big miner can simply assume when calculating their business plans years in advance that price has to jump because of halving. what they do not need to assume is the block reward itself: it is a given fact that with the upcoming halving they make only 50% of what they did before. big miners have considered this BEFORE they start investing millions. most of them will be able to sit it out.   

[Monumental]

nothing will happen to them even if the bitcoin price stays the same as it is right now. they are earning a lot of money each day and that is while they have access to somewhat cheap electricity.

The halving just means their earning will halve. But they can still make profit from the mining. After halving, the electricity cost might be 50% of the revenue.

[talks_cheep]

All you're missing the point. The big Chinese mining companies will go on as usual, halving or not, they will redouble their effort which means they will grow even BIGGER. Chinese capitalism at its best, you can say. On the other hand, many, if not most, of the home miners around the world WILL close down after the halving. Unless price doubles, which will NOT happen. Price can not suddenly double just because of halving. In fact, I think price will come down around July 2016, will stay down until late 2016. Big China mining companies will thrive regardless.

[quadriple7]

Will they go under?  Can they survive on half the amount of income?

answer is no, probably they won't survive, because they will get much less than their fees

so thing that they will do, is probably to switch to other alt coins,  or just quit their jobs and no mor mining, but that would be horrible news for bitcoin

[newcoins1978]

Will they go under?  Can they survive on half the amount of income?

answer is no, probably they won't survive, because they will get much less than their fees

so thing that they will do, is probably to switch to other alt coins,  or just quit their jobs and no mor mining, but that would be horrible news for bitcoin

The chinese miners will develop a next generation miner. Which will be profitable after the halving.
They surely will not used an outdated S7 miner for longer then 1 year. Altough i am not sure if the S7 will be profitable after the halving.

[winspiral]

First every one will mine with lost...
And little by little many will give up...
and then the "difficulty" will be adapted for a little profit for the best "productive" ones...

[Monumental]

First every one will mine with lost...
And little by little many will give up...
and then the "difficulty" will be adapted for a little profit for the best "productive" ones...

That could be true. If there is no profit, some miners will give up. It would be better to buy bitcoin directly.

[makingwin1]

Will they go under?  Can they survive on half the amount of income?

answer is no, they can't survive, when block rewards will be halving they will get 2 times less, but fees will still be same, so miners would have to leave their jobs and it would be very bad for bitcoin if new miners wouldn't change old ones, but  i don't think that price won't go up, it should rise to 800$ atleast

[Wexlike]

Most of them have yearly electricity contracts, that are already paid. They will mine no matter what.