Mining equipment maker supporting exchange rate?

[johnyj]

Sooner or later the cost of mining will reach a point that chip manufacturer's only hope is a steady rising bitcoin exchange rate

If the equipment makers could continuously buy out the coins on the market thus raise the exchange rate, they could sell more and more equipments (And make fiat money during the process)

To support the exchange rate is not difficult, with just 1 billion dollar they can hold the exchange rate definitely above $1000, maybe $10K since not all the coins are for sell

And by doing this they gain both on exchange and mining equipment sale. They don't even need to cash out those coins they bought from exchange to pay for their expense, that will come from the mining equipment sale. And if they never cash out, the exchange rate will be higher and higher

Is this sustainable? Debate

[jamesc760]

The OP is proposing the opposite of what Asicminer is doing: sell/dump as many bitcoins as fast he's mining. Instead, if Asicminer BOUGHT btc (ie, become a hoarder), he'd be doing himself and others a service by INCREASING bitcoin price/USD.

I only wish miners were THAT smart.

[Zaih]

Your forgetting that other people will still hit their limits and sell the coins they currently own at certain prices.

Sure, it'll help, but all it will mean is we won't experience any inflation (Or very little). No inflation doesn't mean a definite price rise, it's just one less factor that isn't inextricably supply & demand based affecting the price.

[johnyj]

Are you assuming that they will continue to sell mining equipement for same number of BTC ?

Event if BTC price is 10 or event 100 times more expensive ?

Like a jalapeno for 27400 $

If not, I don't understand how you expect they will regain theyr money ?

(Sorry for my english)

Consider such a case:

Equipment maker sell a mining rig for $100, make $50 profit. The miner who bought the equipment will mine $200 worth of coins, sell part of the coins, like $20. And equipment maker buy back those coins with $20, they will be able to make $30 while still digesting the added coin supply, thus keep exchange rate stable

However, if the miner want to sell all the coins mined (pure fiat profit driven), then they will dump $200 worth of coins into the market. The equipment maker can not digest such large amount of supply with their $50 profit. Price will go down, equipment maker can not sell a profitable mining rig, they lower the mining rig price to their breakeven point, and miners can not mine enough coin to ROI, they start to hold coins and coin supply will decrease

So it depends on miner's action, if they are fiat profit driven, they will drive the price down, if they only cash out a little bit every year, then the whole system will grow fast and stable