[2017-11-12] Analyst: “In 4 years BTC mining won’t be profitable anymore”

[Alex077]

According to Christopher Chapman, an analyst at Citigroup Inc, that might not be a bubble problem or fork which would eventually kill bitcoin, but the staggering energy costs associated with mining of the digital gold.

As Citigroup report states, the price of bitcoin required for mining to stay profitable in 2022 stands at $300 000 — according to the calculations, current growth trends, and electricity use. The amount of power consumed in the process of emission by that time would be enough for the whole Japan...https://en.bitnovosti.com/2017/11/10/analyst-in-4-years-btc-mining-wont-be-profitable-anymore/

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[greeklogos]

The analyst believes that the community will find other ways of expanding, possibly leading to the change of proof-of-work algorithm, as the most energy-intensive part.

Even now mining is not so profitable anymore, in the case if it is private one; only mining farms can earn something really worthy, but how many costs they had to organize the farm, it's a really huge money. I used to belive to experts and analysts - people will create something new which will continue to bring profit.

[onrise]

I think in our country form last year itself it was not suitable as far as profitability of mining the btc was concerned.  Electricity cost and equipment costs kill the profits and thus people nowadays probably are mining the altcoins. But people in starting who were involved in btc mining have actually made the tremendous money.

[Palmerson]

Really this problem needs to be solved. This month, we saw that they can make miners with bitcoin. We are all connected to one circuit and therefore is a common problem. To increase the value of the transaction to infinity is impossible. It is possible to increase the size of the block is the only way. When there will be a trade with bitcoin the number of transactions will increase several times and then what?

[gentlemand]

Um, does he not realise that the profitability is constantly adjusting and will balance itself out? If it's too expensive then miners fall away until it attracts miners again.

It would be nice to see an alternative to PoW that does the job though. There'll come a point where comparing the electricity consumed by the banking world won't cut it any more.

[Carlton Banks]

Um, does he not realise that the profitability is constantly adjusting and will balance itself out? If it's too expensive then miners fall away until it attracts miners again.

It would be nice to see an alternative to PoW that does the job though. There'll come a point where comparing the electricity consumed by the banking world won't cut it any more.

Um, do you realise that this is a completely pointless observation?


The reason why proof of work secures the Bitcoin network is because of the "work" part You're essentially asking for something for nothing, security for zero effort. You may as well fantasize about time machines or anti-gravity boots.


So the "using too much electricity" rhetoric is no different to saying "Bitcoin is too secure". What exactly do you people want, insecure money?

[veleten]

another pro analyst has spoken
bitcoin mining will be profitable ALWAYS
since the network depends on the amount of people mining,if there are no miners,the coin will die
and even if after the halvings,the block reward is too small the block fees are going to be the main reason people mine
so get your facts straight,analysts,the price of electricity will remain roughly the same,maybe even lower than today
since we do not know what sources of energy will be disovered and the price of one bitcoin may as well be in the 100.000$ area
who knows? people laughed when it was 0.20$ at those who were buying bitcoin en masse

[AlphaInterceptor]

Thats a good question we will see.

[ChromaticStar]

Um, does he not realise that the profitability is constantly adjusting and will balance itself out? If it's too expensive then miners fall away until it attracts miners again.

It would be nice to see an alternative to PoW that does the job though. There'll come a point where comparing the electricity consumed by the banking world won't cut it any more.

Um, do you realise that this is a completely pointless observation?


The reason why proof of work secures the Bitcoin network is because of the "work" part You're essentially asking for something for nothing, security for zero effort. You may as well fantasize about time machines or anti-gravity boots.


So the "using too much electricity" rhetoric is no different to saying "Bitcoin is too secure". What exactly do you people want, insecure money?

I've wondered about this before. How much security do we really need? The hash rate is a measure of security, but it is so exorbitantly high that no single individual will come close to it attacking it.

If half the miners dropped out, like they just did to go mine BCH, would that be such a bad thing? Difficulty will readjust, BTC will still hum along. Eventually the only thing that will make BTC profitable will be if enough people adopt it and transaction fees pay the difference in electrical costs since block rewards will drop off.

Am I missing something? Of course we want security, but I really don't think we need this much. From my perspective, we are in the mining bubble stage. Unless hash rate drops so low that it could be attacked, there shouldn't be a real need to worry.

[vit05]

In four years a lot of things could change and new code could make mining still profitable. Nobody could say something so essential to Bitcoin will just stop working. But if you think well, in the beginning mining wasn't profitable.

[Kingofbitcoin12345]

If the problem is the profitability of bitcoin mining because of electricity cost related.. Is new technology on free electricity still not available on that country he is living with.. This observation is not only malice with personal intentions or making such statements is a mere speculation without any basis of reality.. They almost give so many reason for destroying bitcoin and killing it but nothing really works..

[Qartersa]

According to Christopher Chapman, an analyst at Citigroup Inc, that might not be a bubble problem or fork which would eventually kill bitcoin, but the staggering energy costs associated with mining of the digital gold.

As Citigroup report states, the price of bitcoin required for mining to stay profitable in 2022 stands at $300 000 — according to the calculations, current growth trends, and electricity use. The amount of power consumed in the process of emission by that time would be enough for the whole Japan...https://en.bitnovosti.com/2017/11/10/analyst-in-4-years-btc-mining-wont-be-profitable-anymore/

This is alarming in the sense that when there will no longer be Bitcoin miners, Bitcoin will no longer experience growth as many are expecting. There will be poor circulation of Bitcoins thus there will be less people who will demand of it because they already know for a fact that there will no longer be any production. I think we have to do something to make the process less costly for miners. Otherwise, we will all suffer from this internal problem. 

[Carlton Banks]

How much security do we really need? The hash rate is a measure of security, but it is so exorbitantly high that no single individual will come close to it attacking it.

If half the miners dropped out, like they just did to go mine BCH, would that be such a bad thing? Difficulty will readjust, BTC will still hum along. Eventually the only thing that will make BTC profitable will be if enough people adopt it and transaction fees pay the difference in electrical costs since block rewards will drop off.

Am I missing something? Of course we want security, but I really don't think we need this much. From my perspective, we are in the mining bubble stage. Unless hash rate drops so low that it could be attacked, there shouldn't be a real need to worry.

So, why don't you tell us how low the hashrate should be to keep Bitcoin's blockchain sufficiently secure?

No-one can answer that question definitively, Satoshi's cryptocurrency concept isn't sufficiently mature to make such non-empirical judgements. If you've actually got a meaningful, empirical way of analysing the issue, please tell us. Until then, the hashrate will simply follow the price, and self-interest will drive miners to compete as efficiently as they can (and hashrate security will continue to be a by-product of that).


I mean, what's the actual idea being proposed by the "hashrate is too high" contingent? Anything?

[ChromaticStar]

So, why don't you tell us how low the hashrate should be to keep Bitcoin's blockchain sufficiently secure?

Only low enough to ensure that mining is profitable indefinitely, I'm not suggesting a specifically defined numerical hashrate, but a lot of these miners seem to be trying to make a quick buck. History is full of mineral commodity booms and busts, this is a digital mining boom that will bust. The argument that we need the current hashrate for security reasons is complete non-sense. BTC isn't going to be attacked even though we just lost 50% of the miners. No one has the hash power to attack it except the miners themselves, which would be suicide.

If this Chapman guy thinks BTC needs to be $300,000 in 2022 to make mining profitable, well he's wrong. If the price is only 10% of that, then 90% of the unprofitable miners will need to shutdown and the 10% that are left will be the profitable ones. I'm willing to bet BTC still won't be attackable at that hashrate.

Who knows what Bitmain will be shitting out and where Moore's Law will put us? For all we know, a profitable hash rate may be 100x higher that it is today.

Then again, maybe I'm being pessimistic about price and we may indeed be at $300,000 in a few years.

I mean, what's the actual idea being proposed by the "hashrate is too high" contingent? Anything?

Just that we're in a mining bubble and the miners of today are likely to go bust in a few years as the block reward drops off and people switch to zero fee lightning.

[gentlemand]

Just that we're in a mining bubble and the miners of today are likely to go bust in a few years as the block reward drops off and people switch to zero fee lightning.

I've never understood this one.

For lightning channels to open and close they have to have on chain transactions. If we assume blocks remain small then on chain transactions will be hideously expensive. Miners will make more money than ever in fees.

Maybe there'll be a yet to be discovered way for channels to never have to go on chain again, but there'll always be on chain needs.

[aso118]

According to Christopher Chapman, an analyst at Citigroup Inc, that might not be a bubble problem or fork which would eventually kill bitcoin, but the staggering energy costs associated with mining of the digital gold.

As Citigroup report states, the price of bitcoin required for mining to stay profitable in 2022 stands at $300 000 — according to the calculations, current growth trends, and electricity use. The amount of power consumed in the process of emission by that time would be enough for the whole Japan...https://en.bitnovosti.com/2017/11/10/analyst-in-4-years-btc-mining-wont-be-profitable-anymore/

He is missing two things- the price of Bitcoin will shoot up exponentially and transaction fees will increase. If mining is not profitable, then miners will shut down which implies that the Bitcoin network will shut down. That is not going to happen.

[jennal]

In 4 years BTC will be mined completly not just not profitable

[Carlton Banks]

Maybe there'll be a yet to be discovered way for channels to never have to go on chain again, but there'll always be on chain needs.

That's what the whole Lightning Network concept has always been based on: users can hop channels.

So, if I've got a channel with you gentlemand, and you've got a channel with ChromticStar, I can send BTC to ChromaticStar via the channel I have with you. And so everyone can send to anyone, as long as there's a viable route across the network.

[Basmic]

I do not believe that bitcoin will go bankrupt. But I am sure that bitcoin will require constant upgrading. Without it can not exist even the world's most trusted mechanism. I don't understand all the intricacies of bitcoin mining but I don't understand why it is impossible to increase the number of transactions. It was the decision to increase the size of the block. The more transactions the greater will be the remuneration of the miners.

[Carlton Banks]

I don't understand why it is impossible to increase the number of transactions. It was the decision to increase the size of the block. The more transactions the greater will be the remuneration of the miners.

Well, increasing the size of blocks is the worst way to increase the rate of transactions. There are other much better ways to do it.

And, the blocksize was increased 2 months ago. The max blocksize was 1MB, it's now 4MB.