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Edward50 (OP)
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June 29, 2011, 12:38:40 AM |
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You may think that it will increase the price of bitcoin, since there are not new bitcoins coming to the market.
However, will the loss of miners cause a loss of interest in bitcoin so great that bitcoin price will actually fall?
I used to be more interested in this when you could actually mine and make an income etc. But now that it seems to coming to and end I have lost a bit of interest. I do not check the price as often, and I do not think I even want to invest any money into bitcoin any more.
Bitcoin is just like any other collectible, be it comics, baseball cards, antiques. When there is lots of interest in it you do not want to sell what you own, and want to buy more at high prices. When you just do not have the interest, you do not care.
We shall see what will happen, but does anyone think the unprofitble mining will have an effect on the price?
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Empty your mind, be formless, shapeless — like water. Now you put water in a cup, it becomes the cup; You put water into a bottle it becomes the bottle; You put it in a teapot it becomes the teapot. Now water can flow or it can crash. Be water, my friend.
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tsvekric
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June 29, 2011, 12:59:29 AM |
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I wish there was a sticky note that said: "DIFFICULTY AND MINING COST DOES NOT AFFECT PRICE"
What do you mean "there are not new bitcoins coming into the market"?
Bitcoins come into the market at a constant rate, regardless of difficulty or mining cost. Unless everyone stopped mining right now, bitcoins will come in on average ~300 BTC an hour. And if everyone stopped, it would only affect the supply until the next difficulty change and then everything would be back to normal.
If you're sick of playing around with bitcoins I have a solution for you: 1LqdM8Rd52pE8evddzdeSFkoojqvTQTUdi
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Hey TeKillaSunRise, check it out
-qwe2323
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Edward50 (OP)
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June 29, 2011, 02:04:44 AM |
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If you read my post you would understand that I am not talking about bitcoins coming into the market per se.
I am talking about bitcoin will lose a lot of interest once all the miners stop mining and move on away from bitcoin.
I think most of the interest right now in bitcoin is mining related.
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Empty your mind, be formless, shapeless — like water. Now you put water in a cup, it becomes the cup; You put water into a bottle it becomes the bottle; You put it in a teapot it becomes the teapot. Now water can flow or it can crash. Be water, my friend.
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FooDSt4mP
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June 29, 2011, 02:10:37 AM |
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If you read my post you would understand that I am not talking about bitcoins coming into the market per se.
I am talking about bitcoin will lose a lot of interest once all the miners stop mining and move on away from bitcoin.
I think most of the interest right now in bitcoin is mining related.
I don't think it was miners paying $30 per bitcoin. Someone else is interested. |
As we slide down the banister of life, this is just another splinter in our ass.
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newunit16
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June 29, 2011, 02:50:07 AM |
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I don't think it was miners paying $30 per bitcoin. Someone else is interested.
sadly i dont think it was people wanting to buy bread and gas with BTC either. |
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CNMOH
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June 29, 2011, 03:46:16 AM |
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You may think that it will increase the price of bitcoin, since there are not new bitcoins coming to the market. The amount of coins being produced is not related to the hashing power of the network. |
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qed
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June 29, 2011, 05:21:13 AM |
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I wish there was a sticky note that said: "DIFFICULTY AND MINING COST DOES NOT AFFECT PRICE"
What do you mean "there are not new bitcoins coming into the market"?
Bitcoins come into the market at a constant rate, regardless of difficulty or mining cost. Unless everyone stopped mining right now, bitcoins will come in on average ~300 BTC an hour. And if everyone stopped, it would only affect the supply until the next difficulty change and then everything would be back to normal.
If you're sick of playing around with bitcoins I have a solution for you: 1LqdM8Rd52pE8evddzdeSFkoojqvTQTUdi
Yes, the number of bitcoin is increasing at an almost constant rate (for now), but not the price to produce them! Higher difficulty means the energy and effort to produce a bitcoin will be higher so miners will not sell it at a low price. Would you sell something you payed 10$ for 7$? I guess that's a no. As you wrote, "if everyone stopped, it would only affect the supply until the next difficulty change and then everything would be back to normal." is wrong. If everyone stops the difficulty will not adjusts since the threshold of block needed will not be reached. |
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FreeMoney
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June 29, 2011, 08:48:35 AM |
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I don't think it was miners paying $30 per bitcoin. Someone else is interested.
sadly i dont think it was people wanting to buy bread and gas with BTC either. Figure out what they do want to spend them on and profit??? Why don't you think people would want to buy gas with coins? If I had a car I would. I would certainly buy bread. |
Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone. |
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JoelKatz
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June 29, 2011, 08:56:27 AM |
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However, will the loss of miners cause a loss of interest in bitcoin so great that bitcoin price will actually fall?
Unlikely, because miners are much more likely to be selling bitcoins than buying them, so they don't account for much of the demand. But losing miners can't reduce the supply. So there's no effect on supply and no effect on demand. The theory would have to be that a reduction in miners will eventually reduce demand because miners are also evangelists who bring in people who don't mine. But I don't think that will happen. The rate of increase in participants may drop due to the loss of evangelists, but those on the demand side are also evangelizing. If a loss of miners reduces the value of bitcoins, it would only be because a high rate of new bitcoin users was needed just to sustain the current value. If that's true, bitcoins were already unhealthy. |
I am an employee of Ripple. Follow me on Twitter @JoelKatz
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killer2021
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June 29, 2011, 02:04:57 PM |
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It'll have no effect.
The amount of new bitcoins being produced is constant. The more miners on the network simply means more people fighting for those bitcoins.
Likewise, mining is survival of the fittest. Only those who mine most efficiently will survive. Eventually those who are mining at a loss will pull out. This will cause the difficulty to decrease and the most efficient miners will return to profitability. There is also the dynamic of future prices. Some people might mine at a loss hoping the price eventually goes up. However, there is no guarantee of that.
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stic.man
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June 29, 2011, 02:07:47 PM |
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the vast majority of people into bitcoin have absolutely zero interest in mining other than checking to see if one pool has a near 50% share
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DrYe5
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June 29, 2011, 02:09:06 PM |
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The vast majority of the currency is held by miners. When they need the money, or are afraid they can't recoup costs. They will drop the market. I think we could easily see $15 again in the next week.
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tsvekric
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June 29, 2011, 04:16:18 PM |
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Yes, the number of bitcoin is increasing at an almost constant rate (for now), but not the price to produce them! Higher difficulty means the energy and effort to produce a bitcoin will be higher so miners will not sell it at a low price. Would you sell something you payed 10$ for 7$? I guess that's a no.
So if you paid $1000 for $100 worth of gold, would that make gold rise to $1000 soon so you could sell it or would it just make you stupid? Mining bitcoins for $10 when the price is $7 will not drive the price up. This is a logically fallacy and you're conflating sunk costs into price. What you paid, you paid, you can't change that. Beyond that you will want to sell high and buy low just like anyone else. If you think $7 is low and it will eventually go to $10, then you hold on to it. If you think $7 is a peak, then you're a fool to hold on to it even though you're selling at a loss. Miners do not dictate the market and they do not even put pressure on market prices. Supply is supply, demand is demand. Would I sell something I paid $10 for, for $7? That question requires more information. If I bought something worth $2 for $10, and someone stupid offered me $7 for it, I'd be stupid not to sell at a loss because the whole situation is stupid all around. When mining becomes too expensive miners will stop mining, not continue paying for bitcoins in the hopes that they can sell them higher than the current market rate! (Unless they believe price to increase dramatically in the future!) |
Hey TeKillaSunRise, check it out
-qwe2323
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markm
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June 29, 2011, 04:37:56 PM |
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Bitcoins need not exist in a vacuum, there can be other things miners can mine.
So we can have not just monolithically "miners" but a potential distinction between combinations of "miners who already mined some bitcoin" and "miners who might mine some bitcoin".
Miners who already mined some bitcoin might consider selling some bitcoin. Miners who might mine some bitcoin potentially / hypothetically might mine something else instead or as well.
If interest does turn out to follow mining to any extent and interest does turn out to lead to some demand to some extent then whatever else miners choose to mine might experience an increase in demand, which could lead to an increase in price, which could lead to increased ability to be used to purchase bitcoins, which ability if exercised could lead to increasing price of bitcoins...
-MarkM- (Hmm, how low would bitcoin price have to go in order for parting with some botcoin in return for some bitcoin to seem attractive?)
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bitcola
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June 29, 2011, 05:40:16 PM |
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Miners hoard and sell bitcoin. They never buy it. So how could the buying interest go down? It's already at zero from the miners.
What's keeping the price up is speculators and investors who are buying up whatever the few miners are selling.
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bitcon
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June 29, 2011, 09:36:38 PM |
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i both mine and buy. especially since it seems cheaper to buy right now at $17 than to invest in mining. i spent ~ $600 a week ago on 4 video cards (2 of which i'll be returning to BestBuy) and so far i've mined only about 4.5 Bitcoins. = ~ $75.00 . if i would have used that same $600 to buy bitcoins directly, i'd have ~ 35 bitcoins and a lower electricity bill.
so.... in effect unprofitable mining helps the price of bitcoin since it's smarter to buy than to mine.
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anthony.selby
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June 29, 2011, 09:37:46 PM |
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I don't see why everyone seems to think mining is unprofitable .... I mine it costs 33 dollars (usd) to power my mining machine .... at current prices even if they fall that 2 / 3 maybe 4 btc a month ... I'm making atleast one every 2 days so in one week I pay for one months worth of power ... that leaves 3 weeks for profit ... if btc fall to 11 dollars that's 6 months without diff. adjustment with prices where they are its probably 6 months with diff adjustment to pay back a 600 dollar investment
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DrYe5
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June 29, 2011, 10:16:41 PM |
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The vast majority of the currency is held by miners. When they need the money, or are afraid they can't recoup costs. They will drop the market. I think we could easily see $15 again in the next week.
Can you prove that the bitcoins are still held by the miners? That seems like a statement that needs a source! That's my supposition. It can be inferred from the total number of bitcoins that exist, the price per bitcoin and a realistic value of the bitcoin economy. |
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qed
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June 29, 2011, 10:30:33 PM |
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Yes, the number of bitcoin is increasing at an almost constant rate (for now), but not the price to produce them! Higher difficulty means the energy and effort to produce a bitcoin will be higher so miners will not sell it at a low price. Would you sell something you payed 10$ for 7$? I guess that's a no.
So if you paid $1000 for $100 worth of gold, would that make gold rise to $1000 soon so you could sell it or would it just make you stupid? Mining bitcoins for $10 when the price is $7 will not drive the price up. This is a logically fallacy and you're conflating sunk costs into price. What you paid, you paid, you can't change that. Beyond that you will want to sell high and buy low just like anyone else. If you think $7 is low and it will eventually go to $10, then you hold on to it. If you think $7 is a peak, then you're a fool to hold on to it even though you're selling at a loss. Miners do not dictate the market and they do not even put pressure on market prices. Supply is supply, demand is demand. Would I sell something I paid $10 for, for $7? That question requires more information. If I bought something worth $2 for $10, and someone stupid offered me $7 for it, I'd be stupid not to sell at a loss because the whole situation is stupid all around. When mining becomes too expensive miners will stop mining, not continue paying for bitcoins in the hopes that they can sell them higher than the current market rate! (Unless they believe price to increase dramatically in the future!) You seems having hard times understating that. Will you buy something for 10$ (keep mining) and resell it for 7$? |
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DrYe5
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June 29, 2011, 10:43:11 PM |
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Q: Will unprofitable mining hurt Bitcoin price?
A: Maybe.
The logical fallacy it seems many have been operating under, that bitcoin price should follow mining difficulty, has led to an artificial corelation between rise in bitcoin price and rise in mining difficulty. If the only market participants were miners, you would have exactly a pyramid scheme with some technical window dressing. Now, this is not all the market is, but what part?
As long as there is widespread faith in bitcoin and a growing REAL market, there should be no catastrophe. However, it might take another three years of trading at $17 to work through the artificially pent up currency supply.
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