Is the current market downturn proof that mining is too centralized?

[alani123]

The network's difficulty didn't go down when the halving happened. Miners obviously had knowledge of it in advance but this might be indicative of several things.

It'd be safe to assume that mining is centralized enough for mining to be so cheap in order to make running mining profitable equipment even for half the reward. As of why this is relevant to recent events, the recent downturn makes mining unprofitable at such price levels for any miner paying more than 0.1$ per kW/h. Does this mean that mining is completely centralized in huge facilities in order to keep it profitable? Could this also mean that the recent rally was a result of market manipulation for miners to dump their coins on bullish speculators?

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The mining reward halving happened almost exactly the same time the next generation of miners with ~double the efficiency came out which makes any conclusions regarding the effect of halving without taking this into consideration both misinformed and misleading.

[tbonetony]

The math model used in your quote of $0.1/kwh as minimum is up to debate.
1. When a miner becomes obsolete it's residue value will unlikely to become 0. A counter example is S7 at today.
2. The assumption of 1-yr timespan on S9 to become obsolete. Whether it becomes obsolete depends on operation costs, which varies for everyone. Obsolete to Operator A does not mean it would have to be so to B.
3. Miners will likely have an interest in rising btc price because they have near-term financial commitments such as electricity bills. A crash in price does no good for them.
4. A flash crash would not knock many players out of the game. People who get hurt the most are the ones that speculate on futures or trade on margin.
5. Centralized mining is the trend and likely will continue to be because it's become a competition game on capital.

Just my 2 cents.

[QuintLeo]

The network's difficulty didn't go down when the halving happened.
 

 Error. The hashrate and difficulty DID drop some when the halfing occured LAST SUMMER - but there was a "new generation" of miners being deployed in that same timeframe, which had already taken over the majority of network hashrate and remained profitable despite the halfing - and continued sales quickly drove the hashrate back past the previous high.

 The current market PRICE downturn has nothing to do with miners - it is STRICTLY AND ENTIRELY due to the Chinese Central Bank (with is part of their GOVERNMENT) announcing it was investigating the large Chinese exchanges for stuff like "potential money laundering, market manipulation" and such.

 It's not MINING that's too centralised, it's Bitcoin OWNERSHIP that is very centralised in one country.

 (Ditto Litecoin and many if not most other newer altcoins).


 RESIDENTIAL electric rates in many parts of the US are less than 10c / kwh - and there are quite a few of us SMALL miners paying less than 5.
 While the majority of Bitcoin hashrate is no doubt generated by various major farms, it's entirely possible for the small miner to be quite profitable with proper planning and location.