Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[BitAddict]

Miners adapt their mining expenses according to bitcoin price, not the opposite. In the hypothetical case that bitcoin goes to $10, miners would spend less than $10 to mine each bitcoin.

[NotLambchop]

...
No, it's called a negative feedback loop and should probably respond like any other damped oscillation.
...

Not all negative feedback loops result in damped oscillation.  Oscillators, for instance, are simply a negative feedback loop with a time delay.
This is sorta important to remember, and the reason not everything should be modeled on pendulum of a run-down clock.

[BlindMayorBitcorn]

Miners adapt their mining expenses according to bitcoin price, not the opposite. In the hypothetical case that bitcoin goes to $10, miners would spend less than $10 to mine each bitcoin.

I thought the expense was to due to rising difficulty, and that determines the cost of production, which in turn help determine the market valuation..

Edit: so it can work backwards? The market valuation can determine the cost of production and difficulty with demand?

[BitAddict]

Miners adapt their mining expenses according to bitcoin price, not the opposite. In the hypothetical case that bitcoin goes to $10, miners would spend less than $10 to mine each bitcoin.

I thought the expense was to due to rising difficulty, and that determines the cost of production, which in turn help determine the market valuation..

Mining difficulty adapts to bitcoin price. If price drops to $10, difficulty will drop too.

Is just simple offer and demand. If market don't want to pay more than $10, miners can't spend more than $10 to mine them. Otherwise they would be mining at a big loss.
But if market want to pay $10,000 and miners only spend $100, that's ok because they are doing it at a profit. Of course more miners would join mining because high profits and then, after time, mining each bitcoin would be near $10,000 each.

Hint: Remember bitcoin could be mined for nearly $0 each (if just 1 computer mining and no demand at all). It is just offer and demand (rising price and difficulty) the one who makes mining more expensive.

[xcapator]

China broke downtrend line for past little while, then it goes right back and breaks the top one, I guess it will crash hard. I guess just getting people stopped and margin called

[noobtrader]

Miners adapt their mining expenses according to bitcoin price, not the opposite. In the hypothetical case that bitcoin goes to $10, miners would spend less than $10 to mine each bitcoin.

thats impossible because the hardware will never roi that way because you have to consider how much coin can be mined per day.

btc emission as for now is 3600 coin per day

so

if i get profit of 3usd per coin that equal to 10800usd profit for ALL miner, 972000 usd every 3 month, but then you have to consider how many miner are there and if there is 275,536 Thash and each miner say... 3T, there roughly 91800 machine and each machine takes 10 usd per 3 month it never roi even if the miner priced at 300usd


edit ::: say... you got 9 usd per coin because free electricity, u still got 10usd per month

[BlindMayorBitcorn]

Miners adapt their mining expenses according to bitcoin price, not the opposite. In the hypothetical case that bitcoin goes to $10, miners would spend less than $10 to mine each bitcoin.

I thought the expense was to due to rising difficulty, and that determines the cost of production, which in turn help determine the market valuation..

Mining difficulty adapts to bitcoin price. If price drops to $10, difficulty will drop too.

Is just simple offer and demand. If market don't want to pay more than $10, miners can't spend more than $10 to mine them. Otherwise they would be mining at a big loss.
But if market want to pay $10,000 and miners only spend $100, that's ok because they are doing it at a profit. Of course more miners would join mining because high profits and then, after time, mining each bitcoin would be near $10,000 each.

Hint: Remember bitcoin could be mined for nearly $0 each (if just 1 computer mining and no demand at all). It is just offer and demand (rising price and difficulty) the one who makes mining more expensive.

It's complicated

[BitAddict]

Miners adapt their mining expenses according to bitcoin price, not the opposite. In the hypothetical case that bitcoin goes to $10, miners would spend less than $10 to mine each bitcoin.

thats impossible because the hardware will never roi that way because you have to consider how much coin can be mined per day.

btc emission as for now is 3600 coin per day

so

if i get profit of 3usd per coin that equal to 10800usd profit for ALL miner, 972000 usd every 3 month, but then you have to consider how many miner are there and if there is 275,536 Thash and each miner say... 3T, there roughly 91800 machine and each machine takes 10 usd per 3 month it never roi even if the miner priced at 300usd


edit ::: say... you got 9 usd per coin because free electricity, u still got 10usd per month

Market don't care about ROI or profit. Miners would lose their investment, that's all. Miners can't force market to buy their bitcoins at the price they want, they can just turn off their rigs in case they are not doing it at a profit.

A lot of people bought a lot of mining equipment that will never ROI. So?

[BlindMayorBitcorn]

Miners adapt their mining expenses according to bitcoin price, not the opposite. In the hypothetical case that bitcoin goes to $10, miners would spend less than $10 to mine each bitcoin.

thats impossible because the hardware will never roi that way because you have to consider how much coin can be mined per day.

btc emission as for now is 3600 coin per day

so

if i get profit of 3usd per coin that equal to 10800usd profit for ALL miner, 972000 usd every 3 month, but then you have to consider how many miner are there and if there is 275,536 Thash and each miner say... 3T, there roughly 91800 machine and each machine takes 10 usd per 3 month it never roi even if the miner priced at 300usd


edit ::: say... you got 9 usd per coin because free electricity, u still got 10usd per month

Market don't care about ROI or profit. Miners would lose their investment, that's all. Miners can't force market to buy their bitcoins at the price they want, they can just turn off their rigs in case they are not doing it at a profit.

A lot of people bought a lot of mining equipment that will never ROI. So?

The inelastic supply seems to be an issue then. If people demand less, we should be producing less instead of flooding the market so quickly? This must be what creates the volatile bubble-bust cycles. Just like silver

[noobtrader]

Miners adapt their mining expenses according to bitcoin price, not the opposite. In the hypothetical case that bitcoin goes to $10, miners would spend less than $10 to mine each bitcoin.

thats impossible because the hardware will never roi that way because you have to consider how much coin can be mined per day.

btc emission as for now is 3600 coin per day

so

if i get profit of 3usd per coin that equal to 10800usd profit for ALL miner, 972000 usd every 3 month, but then you have to consider how many miner are there and if there is 275,536 Thash and each miner say... 3T, there roughly 91800 machine and each machine takes 10 usd per 3 month it never roi even if the miner priced at 300usd


edit ::: say... you got 9 usd per coin because free electricity, u still got 10usd per month

Market don't care about ROI or profit. Miners would lose their investment, that's all. Miners can't force market to buy their bitcoins at the price they want, they can just turn off their rigs in case they are not doing it at a profit.

A lot of people bought a lot of mining equipment that will never ROI. So?

yes, demand is more important than miner... we have too much miner already  

[BitAddict]

The point is that base price to mine bitcoin starts as low as ~$0. If it is any higher is just because there is enough demand to drive price higher, so miners can start spending more in order to compite for the same bitcoins. If demand goes down, their expenses ir order to compite for that bitcoins goes down too.

[noobtrader]

Miners adapt their mining expenses according to bitcoin price, not the opposite. In the hypothetical case that bitcoin goes to $10, miners would spend less than $10 to mine each bitcoin.

thats impossible because the hardware will never roi that way because you have to consider how much coin can be mined per day.

btc emission as for now is 3600 coin per day

so

if i get profit of 3usd per coin that equal to 10800usd profit for ALL miner, 972000 usd every 3 month, but then you have to consider how many miner are there and if there is 275,536 Thash and each miner say... 3T, there roughly 91800 machine and each machine takes 10 usd per 3 month it never roi even if the miner priced at 300usd


edit ::: say... you got 9 usd per coin because free electricity, u still got 10usd per month

Market don't care about ROI or profit. Miners would lose their investment, that's all. Miners can't force market to buy their bitcoins at the price they want, they can just turn off their rigs in case they are not doing it at a profit.

A lot of people bought a lot of mining equipment that will never ROI. So?

The inelastic supply seems to be an issue then. If people demand less, we should be producing less instead of flooding the market so quickly?

or just hodl for teh next 10 years becuase

Start (2009) : 7200.00000000 #start
Halving 1 (2012) : 3600.00000000 #Halving was November 2012
Halving 2 (2016) : 1800.00000000
Halving 3 (2020) : 900.00000000
Halving 4 (2024) : 450.00000000

 

[noobtrader]

The point is that base price to mine bitcoin starts as low as ~$0. If it is any higher is just because there is enough demand to drive price higher, so miners can start spending more in order to compite for the same bitcoins. If demand goes down, their expenses ir order to compite for that bitcoins goes down too.

i have to disagree with that... nothing cost 0 usd.

[BitAddict]

The point is that base price to mine bitcoin starts as low as ~$0. If it is any higher is just because there is enough demand to drive price higher, so miners can start spending more in order to compite for the same bitcoins. If demand goes down, their expenses ir order to compite for that bitcoins goes down too.

i have to disagree with that... nothing cost 0 usd.

Not $0, I said ~$0. That can be $0.1, $0.01, $0.001 or whatever.

Imagine no one wants to buy bitcoin anymore, and only one guy is mining with his computer for fun. He would get bitcoins for nearly $0.

[BlindMayorBitcorn]

The point is that base price to mine bitcoin starts as low as ~$0. If it is any higher is just because there is enough demand to drive price higher, so miners can start spending more in order to compite for the same bitcoins. If demand goes down, their expenses ir order to compite for that bitcoins goes down too.

So it's a pure supply/demand machine. Unlike metals, there is no real floor to the cost of production?

[BitAddict]

The point is that base price to mine bitcoin starts as low as ~$0. If it is any higher is just because there is enough demand to drive price higher, so miners can start spending more in order to compite for the same bitcoins. If demand goes down, their expenses ir order to compite for that bitcoins goes down too.

So it's a pure supply/demand machine. Unlike metals, there is no real floor to the cost of production?

Exactly. Bitcoins come alone "for free" in each block, you only need to spend money in order to compite with other miners so you have more chances (more mining power) to find each block. The only reason miners spend more and more money is because they can do it at a profit. Miners won't spend more money to compite if they are doing it a loss.

So, if there is just 1 miner because there is no demand at all, mining floor would be near $0.

It's not like gold, that even if no one wants it, if you want to dig it for fun you would need to spend $1000 per ounce anyway (random number).

[BlindMayorBitcorn]

The point is that base price to mine bitcoin starts as low as ~$0. If it is any higher is just because there is enough demand to drive price higher, so miners can start spending more in order to compite for the same bitcoins. If demand goes down, their expenses ir order to compite for that bitcoins goes down too.

So it's a pure supply/demand machine. Unlike metals, there is no real floor to the cost of production?

Exactly. Bitcoins come alone "for free" in each block, you only need to spend money in order to compite with other miners so you have more chances (more mining power) to find each block. The only reason miners spend more and more money is because they can do it at a profit. Miners won't spend more money to compite if they are doing it a loss.

So, if there is just 1 miner because there is no demand at all, mining floor would be near $0.

Is not like gold, that even if no one wants it, if you want to dig it for fun you would need to spend $1000 anyway (random number).

So the bubble-bust cycle is built-in to the protocol..

[noobtrader]

The point is that base price to mine bitcoin starts as low as ~$0. If it is any higher is just because there is enough demand to drive price higher, so miners can start spending more in order to compite for the same bitcoins. If demand goes down, their expenses ir order to compite for that bitcoins goes down too.

i have to disagree with that... nothing cost 0 usd.

Not $0, I said ~$0. That can be $0.1, $0.01, $0.001 or whatever.

Imagine no one wants to buy bitcoin anymore, and only one guy is mining with his computer for fun. He would get bitcoins for nearly $0.

that or if world war 3 sent us all back to stoneage, or if zombie apocalypse rum amok...  

but i agree bitcoin need demand, thats way i really excited about the decentralizing internet and stuff.

[BitAddict]

So the bubble-bust cycle is built-in to the protocol..

No, it doesn't prove that. If people want bitcoin it can go as high as market demand or it could even stabilize if supply/demand is even.
Mining expenses just follow that.

[noobtrader]

The point is that base price to mine bitcoin starts as low as ~$0. If it is any higher is just because there is enough demand to drive price higher, so miners can start spending more in order to compite for the same bitcoins. If demand goes down, their expenses ir order to compite for that bitcoins goes down too.

So it's a pure supply/demand machine. Unlike metals, there is no real floor to the cost of production?

Exactly. Bitcoins come alone "for free" in each block, you only need to spend money in order to compite with other miners so you have more chances (more mining power) to find each block. The only reason miners spend more and more money is because they can do it at a profit. Miners won't spend more money to compite if they are doing it a loss.

So, if there is just 1 miner because there is no demand at all, mining floor would be near $0.

It's not like gold, that even if no one wants it, if you want to dig it for fun you would need to spend $1000 per ounce anyway (random number).

i see this way... miner process transaction, then they get paid in bitcoin

atm we are in this bear market because demand is less than production because miner are minting new coin  but within decades miner will not minting new coin anymore, just the transaction fee.  so i think then we will see how valuable bitcoin really is