Will the reckoning happen between BTC price and difficulty?

[cloverme]

It's always striked me as odd that the price of BTC hasn't really adjusted that much with the rise in difficulty. The more energy it takes to produce a bitcoin over time doesn't seem to be playing into the markets view of what a bitcoin is worth. A bitcoin today costs more to produce than it did in 2011.

As difficulty rises, the huge mining farms out there must feel the hit over time as they expect to turn BTC back into fiat to pay for the equipment to mine. At some point, those mining farms won't be able to spend another x million to purchase new equipment if the current equipment hasn't been paid off.  Even for me, with the difficulty rise today, I had a 12% decrease in BTC production.

At some point, I would think there would be a reckoning between BTC value and difficulty or ?

[vpasic]

difficulty has nothing to do with btc value or any other altcoin.
never happened and sure not gonna happen ever.

[cloverme]

I know, to me, that seems like a problem given that all bitcoins aren't created equal.  I suppose the same argument could be made for physical coins and some paper bills, like how it costs more to make $1 bill than it's worth.

Yesterday when the difficulty went up, the price of BTC fell, for miners that direction of those factors really puts a pinch on mining for profit.

[knightcoin]

I have serious doubt about that theory ... I Agree that there are lot of pump/dumping but it must to be kind of relationship between hardware and btc price ... buy a CPU is cheap than FPGa, Asic etc ... In the begin of 2013 you could spend 500 dollars and get about 10-15 BTC before you hardware breakdown ... now you need to spend at leats $3000 to get what ? 5 btc (betting) ...an it does not matter if the price per GBhash has dropped ... I dont know man, I will not sell my BTC ...

[knightcoin]

btw, here's a better analysis

http://organofcorti.blogspot.co.uk/2014/02/917-estimating-future-bitcoin-mining.html

[samsonn25]

The advancement in ASIC design will not rise as fast as the difficulty level. Meaning with more people mining and equipment coming online it will be harder to mine and the returns will keep diminishing, eventually to a point where it is not profitable to mine anymore because of all the associated costs.  The only factor that can mitigate this is a rise in the price of BTC (But how much can it go up?) 

Probably not as fast as the 50% difficulty increase in mining every month.

[Paya]

One thing worth noting is that, unlike in GPU times, power costs are comparably much smaller with ASICs and in most cases people will keep their miners online even if their profit is rather negligible.

[samsonn25]

I miss the gpu times when any average person with a decent video card could mine for fun and profit.  Nowadays need a high powered asic which is useless at any other task.

[ScaryHash]

You can still use your GPUs to mine scrypt coins.

I assure you that they are highly profitable.

 

[cloverme]

One thing worth noting is that, unlike in GPU times, power costs are comparably much smaller with ASICs and in most cases people will keep their miners online even if their profit is rather negligible.

Maybe for the usb models but most of the ASIC machines use standard pc power supplies using anywhere between 600w to 1200w, before I moved my farm into a datacenter I was spending over $300 a month on power running my ASIC machines.

One interesting factor that I've started to notice is when the price of BTC falls more than 10%, some of the pools show a major reduction in hashing speed then go back up when BTC rises again. As an example, the pool speed at BTC Guild dropped more than 500Th/s within a couple of hours of the BTC price dropping Friday. While I'm just speculating, I'm guessing the large mining farms shut down production when BTC drops to cut power costs.

[InCoinsITrust]

When will be the block halving approximetly ? Will it affect BTC price ?

[vpasic]

When will be the block halving approximetly ? Will it affect BTC price ?

In 3 years. It has nothing to do with btc value!

[Sonny]

When will be the block halving approximetly ? Will it affect BTC price ?

In 3 years. It has nothing to do with btc value!

BTC price may increase a little bit, but don't expect too much.
BTW, there is still 2+ years for that to happen lol.


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Reward-Drop ETA: 2016-09-04 04:52:28 UTC (133 weeks, 6 days, 1 hour, 40 minutes)