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Author Topic: How does the price system manage to work?  (Read 335 times)
kryptqnick
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January 28, 2017, 05:17:21 PM
 #1

I watched this video to learn some more information about halving https://www.youtube.com/watch?v=BPxq8CgMooI.
The guy says here that after the halving the sum of coins per block rewarded for solving problems is reduced twice. The good thing is this also prevents inflation but the bad thing is that miners need the price to rise for mining to be profitable again.
So, as I see it, every 4 years btc is in danger of becoming not used and mined, and the way out of the potential catastrophy is the price growth. My question is how does it happen that the price actually grows and mining becomes profitable after halving? How can people make the price grow to an exactly needed amount without people actually trying to do something to save btc? Why does it work?

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January 28, 2017, 05:27:39 PM
 #2

Miners kept mining when the price was like 250$ at some point so I don't see them stopping to mine anytime soon. If it's no longer profitable for them , they will stop selling in exchanges probably and that will result in less supply and cause a price increase , It's as easy as it sounds. Everything is based on supply and demand.


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Senor.Bla
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January 28, 2017, 07:24:59 PM
 #3

Let us assume i m a miner and i just mined 1 coin. The old price was $100 and know i want $200. I ask for the new price and if you do not like it then you can go somewhere else and buy there. But if you go to another miner that has 1 coin to sell but there is another customer, then you will fight over the coin. Who is willing to pay more will buy the coin. This is the way the price will rise.

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January 29, 2017, 01:49:18 PM
 #4

I watched this video to learn some more information about halving https://www.youtube.com/watch?v=BPxq8CgMooI.
The guy says here that after the halving the sum of coins per block rewarded for solving problems is reduced twice. The good thing is this also prevents inflation but the bad thing is that miners need the price to rise for mining to be profitable again.
So, as I see it, every 4 years btc is in danger of becoming not used and mined, and the way out of the potential catastrophy is the price growth. My question is how does it happen that the price actually grows and mining becomes profitable after halving? How can people make the price grow to an exactly needed amount without people actually trying to do something to save btc? Why does it work?
Yes, it has to be noted. I hope the only possible option would be for the miners to use more advanced mining equipments with advanced chips so that electricity cost is cut into half so that they get their regular income through mining.If we see the past history of Bitcoin mining, first bitcoins were mined in CPU, then GPU and later to ASIC.So, that would be a better option.
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January 29, 2017, 02:02:59 PM
 #5

I watched this video to learn some more information about halving https://www.youtube.com/watch?v=BPxq8CgMooI.
The guy says here that after the halving the sum of coins per block rewarded for solving problems is reduced twice. The good thing is this also prevents inflation but the bad thing is that miners need the price to rise for mining to be profitable again.
So, as I see it, every 4 years btc is in danger of becoming not used and mined, and the way out of the potential catastrophy is the price growth. My question is how does it happen that the price actually grows and mining becomes profitable after halving? How can people make the price grow to an exactly needed amount without people actually trying to do something to save btc? Why does it work?
No man, there is no danger in every 4 year that bitcoin eill be unusable because every year we see new and improved bitcoin miners, also now ROI with free electricity is 140% with latest antminer.
As time goes, hardware and software is developing and there is no reason for panic. Also as you see now, price rised and it's between 900-1000 usd and if mining won't be profitable, price will continue to rise, it's like must to happen process.

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January 29, 2017, 03:21:11 PM
 #6

Simple. The small time miners will stop miner and the big miners would profit more.

Big mining operations have low operating cost and they manage this by setting them up at locations with cheap electrical fees and buy ASICs in bulk. I daresay their ASICs probably have ROIed before the halving and they are earning pure profit right now. Miners can and will continue making money.
My question is how does it happen that the price actually grows and mining becomes profitable after halving? How can people make the price grow to an exactly needed amount without people actually trying to do something to save btc? Why does it work?
In theory, the market works by the supply and demand concept. The higher the demand, the higher the price and vice versa. When the miners stop making this much money, the supply could drop significantly, assuming that they have to sell Bitcoins to cover their operating cost. Hence, the price would rise.














 

 

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HabBear
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January 29, 2017, 04:17:45 PM
 #7

So, as I see it, every 4 years btc is in danger of becoming not used and mined, and the way out of the potential catastrophy is the price growth.

My question is how does it happen that the price actually grows and mining becomes profitable after halving? How can people make the price grow to an exactly needed amount without people actually trying to do something to save btc? Why does it work?

Not used and not mined are two different things.

The bitcoin that has been mined can always be used so long as someone knows the private key to enable transactions from the wallet where the bitcoins are located.

Mining technically could stop at some point, but it probably won't until we've reached the end of the supply to be mined. And even then "mining" will occur to verify transactions but rather than producing new blocks of bitcoins these miners will be getting a fees for the confirmations they're producing to prove transactions are valid. Some people consider this still mining, because the miners are doing the same work BUT they aren't discovering or minting new coins, they aren't adding to the supply base so in my opinion they aren't mining. At that point they'll be validating transactions.

As time goes, hardware and software is developing and there is no reason for panic. Also as you see now, price rised and it's between 900-1000 usd and if mining won't be profitable, price will continue to rise, it's like must to happen process.

This seems plausible but do miners really drive the price of bitcoin as much as you say they do?

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February 01, 2017, 07:48:10 PM
 #8

So, as I see it, every 4 years btc is in danger of becoming not used and mined, and the way out of the potential catastrophy is the price growth.

My question is how does it happen that the price actually grows and mining becomes profitable after halving? How can people make the price grow to an exactly needed amount without people actually trying to do something to save btc? Why does it work?

Not used and not mined are two different things.

The bitcoin that has been mined can always be used so long as someone knows the private key to enable transactions from the wallet where the bitcoins are located.

Mining technically could stop at some point, but it probably won't until we've reached the end of the supply to be mined. And even then "mining" will occur to verify transactions but rather than producing new blocks of bitcoins these miners will be getting a fees for the confirmations they're producing to prove transactions are valid. Some people consider this still mining, because the miners are doing the same work BUT they aren't discovering or minting new coins, they aren't adding to the supply base so in my opinion they aren't mining. At that point they'll be validating transactions.

As time goes, hardware and software is developing and there is no reason for panic. Also as you see now, price rised and it's between 900-1000 usd and if mining won't be profitable, price will continue to rise, it's like must to happen process.

This seems plausible but do miners really drive the price of bitcoin as much as you say they do?

Well, we can't say this directly but yes, it mostly depends on them because there are some big mining companies like BitFury which built largest datacenter in my country 1-2 years ago, they invested millions here. If mining won't be profitable, than there is a need of bitcoin's price rise because without good price, it don't worths and big players needs to try something to solve that problem, also it's sometimes good for exchangers.

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