How many people are going to stop mining because of Block Halving?

[TickenChicka]

Hi Everyone,

I have a friend who is into Bitcoins a lot more than me, he is on many forums and blogs etc and does a lot of development. He told me at work on Friday that he found out from a source that a major farm 800,000 GH/s will most likely be shutting down in Europe. Apparently this farm owns 2 warehouses and a colocation warehouse (I dont know who?). Apparently electricity prices are just not down as low as mining costs and he will lose money on mining when halving first happens. firstly because there will not be an instant price rise. so his 12.5 will still be worth $5500 where his electricity costs will be more like $7000.

This worries me, I am the proud owner of 47 BTC that I have picked up over the past 4 years. If places start to shut down my BTC will be worthless and we need miners to keep the network running. I am so tempted to sell right now just so I have something to show for it.

If one closes, could many? could this actually be the end of Bitcoin as we know it. will the difficulty be too high to continue the network? Sorry I do not know a lot about Bitcoin I just thought it would be good investment.

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[StarofBTC]

It may happens in europe. but I don't think so many people around the world stop mining because halving. and specially chinese miners won't stop it ever. so we should not worry about that.
and yes. bitcoin is a good investment. and I've also invested some money to it. lets see.
I don't think selling bitcoins before the time would be a good idea. you should wait till halving.

[DannyHamilton]

Hi Everyone,

I have a friend who is into Bitcoins a lot more than me, he is on many forums and blogs etc and does a lot of development. He told me at work on Friday that he found out from a source that a major farm 800,000 GH/s will most likely be shutting down in Europe. Apparently this farm owns 2 warehouses and a colocation warehouse (I dont know who?). Apparently electricity prices are just not down as low as mining costs and he will lose money on mining when halving first happens. firstly because there will not be an instant price rise. so his 12.5 will still be worth $5500 where his electricity costs will be more like $7000.

It's great that he is thinking ahead on this and making a good financial decision.  After he shuts down the equipment, he may not want to get rid of it right away.  If enough other people quit, then it might become profitable for him to turn the equipment back on after a few weeks.

This worries me,

Try not to worry so much.  It' isn't good for your health.

I am the proud owner of 47 BTC that I have picked up over the past 4 years.

Congratulations.

Only 47 BTC though? 4 years ago 1 bitcoin was about $5.15.  That means you could have bought 47 of them for just $245.

If places start to shut down my BTC will be worthless

Nah.  If some miners shut down their equipment, it won't have any direct effect on the value of your bitcoins.

and we need miners to keep the network running.

Sure, but we don't need ALL the miners that we have today.  If some of them shut down, then the remaining ones will generate more revenue and therefore remain profitable.

I am so tempted to sell right now just so I have something to show for it.

Well, if you feel that way, I'd be happy to take them off your hands for you.

I'll give you $17,000 for all 47 of those BTC that you think will be worthless.

If one closes, could many?

Absolutely.  I expect that about half of them might.

could this actually be the end of Bitcoin as we know it.

Nah.  Bitcoin operated just fine with less miners in the past.  Those that are able to remain profitable will continue to mine.

will the difficulty be too high to continue the network?

That doesn't even make sense.  If the difficulty is to high, then unprofiatble miners shut off their equipment.  If there is less hash power on the network, then difficulty is reduced.  If difficulty is reduced, then the remaining miners become more profitable. If mining is more profitable, then more miners join the network.  If additional mining hash power is added to the network, then difficulty goes back up again.  This process of difficulty increasing and decreasing continues until an equilibrium is reached where the remaining miners are just barely profitable.

Sorry I do not know a lot about Bitcoin I just thought it would be good investment.

It might be.  It might not be.  We'll know in the future.  If you want to unload those worthless BTC, just let me know.

[target]

Its possible that the Chinese bitcoin miners will also shutdown if bitcoin plummets down to where miner won't profit anymore.
This halving is the very awaited event this year and if it turned out like what we expect, we can go on with our lives enjoying BTC still. if not, we can still go on with the new coin.

[ebliever]

OP may want to consider reading all the  threads around here of people convinced that the price of bitcoin is  going to soar as a result of the halving. Some of us believe the effect of the halving is mostly already priced in, but this is the first time I've heard someone worry that the price would go down!

The price of bitcoin has basically nothing to do with the quantity of miners. 99% of miners could shut down and it would have no direct impact on the price because the same quantity of coins would be mined - that is, the money supply would not be influenced in any way beyond the most subtle impact. We could argue about the impact on network security and the resulting price impact, but for the halving that's not really an issue since 50% of current mining is still a huge amount of network security.

[SFR10]

The thing about sources is, their most of the time rumors and not a fact. That mining farms assumption is as if nothing changes in terms of value but if there will be good enough spike after the halving then there might even be more new miners instead. Nobody knows how the market would react after the halving so the concern about the instant price should be something we don't worry about. Your BTCitcoins wouldn't lose their value just because some miners decide to shut down their mining rigs. There's always the possibility of some switching their miners even prior to the halving (due to different risk factors). There will be a period that with miners switched off, the network stays with same difficulty before it starts to adjust according to the real difficulty (IIRC it happens per 2 weeks period), therefor there might be a period that things could work in a slower rate than usual but it's not permanent. The positive thing is that there could be enough difficulty drop that, makes many miners to jump back in (it's a possibility).

[Enotche]

I think the small miners throw Mein Bitcoin. These have in Europe.

If part of the miners will - complexity will fall, others will wonder Mine, they will go, the complexity will increase. The system remains in balance. And besides, there is hope that in the next year or two or three mining-chips will be built in large quantities in a variety of devices. This will ensure that the proper level of network decentralization.

[Redrose]

All will depends of the price of Bitcoin. In Europe, where electricity is very expensive because of some fucking ecologists, there might be a lot of candidates, except if the price doubles of course, or is near of it.

[Wendigo]

Are you talking about the mining operations in Iceland by any chance? I think they have maybe the biggest mining farm in Europe? About the miners exiting the scene after the Halving starts, well the thing with the raising difficulty is that when miners quit hashing power is subtracted from the total difficulty so it goes down according to how many have left and it goes up again when new people join in to mine coins. There is a constant balance between the miners and the actual difficulty so we don't need every single Bitcoin miner in the world to keep the Bitcoin network running efficiently. Also I don't think the price is supposed to go down if some miners have no more incentive to continue mining due to high electricity costs.

[tertius993]

OP may want to consider reading all the  threads around here of people convinced that the price of bitcoin is  going to soar as a result of the halving. Some of us believe the effect of the halving is mostly already priced in, but this is the first time I've heard someone worry that the price would go down!

The price of bitcoin has basically nothing to do with the quantity of miners. 99% of miners could shut down and it would have no direct impact on the price because the same quantity of coins would be mined - that is, the money supply would not be influenced in any way beyond the most subtle impact. We could argue about the impact on network security and the resulting price impact, but for the halving that's not really an issue since 50% of current mining is still a huge amount of network security.

Hmm, actually if 99% of miners did shut off at the same time it would be a massive problem as it would leave only 1% of the mining power to get the network to the next difficulty change and if everyone powered off just "after" a diff change it could potentially take 200 weeks (i.e. 100 times 2 weeks). And even then the diff change would be limited to a reduction to 25% of the previous level so even the subsequent diff change could take another 50 weeks. Fortunately I think it is very unlikely to happen.

[philipma1957]

OP may want to consider reading all the  threads around here of people convinced that the price of bitcoin is  going to soar as a result of the halving. Some of us believe the effect of the halving is mostly already priced in, but this is the first time I've heard someone worry that the price would go down!

The price of bitcoin has basically nothing to do with the quantity of miners. 99% of miners could shut down and it would have no direct impact on the price because the same quantity of coins would be mined - that is, the money supply would not be influenced in any way beyond the most subtle impact. We could argue about the impact on network security and the resulting price impact, but for the halving that's not really an issue since 50% of current mining is still a huge amount of network security.

Hmm, actually if 99% of miners did shut off at the same time it would be a massive problem as it would leave only 1% of the mining power to get the network to the next difficulty change and if everyone powered off just "after" a diff change it could potentially take 200 weeks (i.e. 100 times 2 weeks). And even then the diff change would be limited to a reduction to 25% of the previous level so even the subsequent diff change could take another 50 weeks. Fortunately I think it is very unlikely to happen.

You could have a 20 day period if the drop 33 percent.

[Hirose UK]

If one closes, could many? could this actually be the end of Bitcoin as we know it. will the difficulty be too high to continue the network? Sorry I do not know a lot about Bitcoin I just thought it would be good investment.

I don't think it could be. If I'm not mistaken, the higher the difficulties are, the higher amount of fees will be. CMIIW

[philipma1957]

If one closes, could many? could this actually be the end of Bitcoin as we know it. will the difficulty be too high to continue the network? Sorry I do not know a lot about Bitcoin I just thought it would be good investment.

I don't think it could be. If I'm not mistaken, the higher the difficulties are, the higher amount of fees will be. CMIIW

I see two,or three diff drops out of the first four after 1/2 ing .

I see price staying flat.

I estimate that 800 ph is in China minting as we type here now.


Much of it is s7

[adaseb]

I think the majority of the hashrate is using S7 or newer technology paying very little electricity. Diff might drop 20% max and that's all.

Don't think it will cause worldwide panic.

[QuintLeo]

I'm not - I already dropped out of Bitcoin a few months back 'cause the diff increases were more than enough to make it unprofitable with ANY current miner at my electric cost where I'm at now.

 I MIGHT get back into it after I move, and the 14/16nm full-custom generation machines finally show up.