Bitcoin price vs. hash rate?

[roslinpl]

btc price falling down but hash rate raise up ... 

You should expect some carryover of continuing difficulty increase or relative stability for some time after a price collapse. Most Bitcoin hardware is pre-ordered in one way or another. Miners will be taking delivery of prepaid units for the rest of 2014 regardless of the BTC price. Even if the BTC price becomes abysmally low, miners will still continue to add their hardware to the network so long as it earns more than the cost of electricity (and maybe even if it earns less, if the miner is financially irrational).

However, we have seen some hashrate lost today, so there is some category of miner that is immediately sensitive to price.

Indeed. Many miners stop mining when they see a huge price drops which is in my opinion not too smart ... because soon or later they will start to mine again but - I am not a miner so I dunno what would I do in their pair of shoes

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[right wing authoritarian]

it is smart to stop mining when the value of BTC flows is below your electricity cost because you can purchase bitcoins more cheaply than you can mine them and you are saving wear and tear on your gear. Of course if you get pleasure from mining which many people do then you  are going to keep on hashing.

[zeeshanblc]

it will be interesting to watch what would happen if price drops to $100 or even less then that.

How many miners would stop, how many companies selling hash rates would bankrupt

[komar]

it will be interesting to watch what would happen if price drops to $100 or even less then that.

How many miners would stop, how many companies selling hash rates would bankrupt

Avalons is already unprofitable.
TerraMiners will produce no profit if bought today. I'll show some calculations soon.

Beeetcoin is a bubble!

[Don007]

it will be interesting to watch what would happen if price drops to $100 or even less then that.

How many miners would stop, how many companies selling hash rates would bankrupt

Avalons is already unprofitable.
TerraMiners will produce no profit if bought today. I'll show some calculations soon.

Beeetcoin is a bubble!

We're currently in another fase; the bitcoin has gained value again! Yeah!

Some people might have restarted mining now, as it's more profitable again.   

[Skele]

it will be interesting to watch what would happen if price drops to $100 or even less then that.

How many miners would stop, how many companies selling hash rates would bankrupt

Avalons is already unprofitable.
TerraMiners will produce no profit if bought today. I'll show some calculations soon.

Beeetcoin is a bubble!

We're currently in another fase; the bitcoin has gained value again! Yeah!

Some people might have restarted mining now, as it's more profitable again.   

Yes, many people start mining not for the current reward that should be negative or cero, but they hope in the future the price will increase, so they will make alo of ROI then..
if you were mining in june-july of 2013 you surely were not making roi at $100, but when the price skyrocketed you did it.

[greenlion]

At the current price and difficulty, assuming $0.15/kWhr electricity cost, you would need to be eating up almost 8 watt/GH/s not to beat the cost of electricity. Almost every ASIC ever made is still profitable to run. Even BFL 65nm units still return about 100% versus the cost of electricity.

[TwinWinNerD]

At the current price and difficulty, assuming $0.15/kWhr electricity cost, you would need to be eating up almost 8 watt/GH/s not to beat the cost of electricity. Almost every ASIC ever made is still profitable to run. Even BFL 65nm units still return about 100% versus the cost of electricity.

Yes, but profitable to run =/= profitable to buy

[redwhitenblue]

As long as the cost to run a specific bitcoin miner is below the USD equivalent of bitcoin that the miner produces then the machines will continue to be used.

There are too many preorders for bitcoin miners for the hashrate grown to slow substantially.

[chennan]

i have always wondered what happens to bitcoin when everyone stops mining because its not worth it and the hash is to difficult? will bitcoin die then?

As hash rate increases,To mine one BTC will cost more (upgrade rig or take more time with the same rig), the price will increase as well. More people will buy and hold it.

[lihuajkl]

btc will die if no one use it

Never happen.

[right wing authoritarian]

btc will die if no one use it

Never happen.

Actually it could happen all it takes is for a sovereign governments to collectively outlaw use after signing a treaty to that effect.

[STT]

Open use of Dollars was outlawed in Soviet USSR.   They were used anyway and to an extent, there was a market just in dollars and prices for them.    Governments are made up of people who then themselves might defy their own laws, dont worry about laws worry about if bitcoin is useful or not in future vs its competition

[Ron~Popeil]

At the current price and difficulty, assuming $0.15/kWhr electricity cost, you would need to be eating up almost 8 watt/GH/s not to beat the cost of electricity. Almost every ASIC ever made is still profitable to run. Even BFL 65nm units still return about 100% versus the cost of electricity.

Yep. If the price keeps climbing I might finally get that ant miner I have been eying.

[bryant.coleman]

It will...Bitcoin will hit solid four figures in the next 6 months, as long as someone doesn't do a major dump causing panic or we don't have another mtgox situation.

Needs to be seen. The earlier peak of $1,242 was achieved as a result of extensive market manipulation by Mt Gox. I just hope that this time around it will be achieved through legitimate means.

[DolanDuck]

Price and hash rate are related but sometimes, for example after a bubble peak, they can diverge.

[TheGambler]

Price and hash rate are related but sometimes, for example after a bubble peak, they can diverge.

As in the hash rate goes higher and the price goes down?

[Don007]

Price and hash rate are related but sometimes, for example after a bubble peak, they can diverge.

As in the hash rate goes higher and the price goes down?

Well, as the hashrate increases, also the difficulty does so that doesn't really matter.      But, as the price increases, it becomes more profitable to mine. The people who had turned off their miners, might turn them on again and that's one of the reasons why the hashrate will increase in that situation.

[redwhitenblue]

Hi all,
Given the recent flurry of posts on how bitcoin's value will keep on dropping, how does one think about the ever-increasing bitcoin hash rate?
http://blockchain.info/charts/hash-rate
http://blockchain.info/charts/hash-rate?timespan=60days&showDataPoints=true&daysAverageString=1&show_header=true&scale=0&address=

Looks like miners, the core backers and long-term investors in bitcoin, still have plenty of optimism left? And the current market is just speculators' short-term panic?

-ElOmmy

Over the long term, the long term price of BTC will affect the long term hashrate.

If over the long term the price of BTC will not cover the price of electricity then miners will stop mining.

If over the long term the price of BTC exceeds the cost of electricity (to run miners) then more people will be incentivized to purchase and run miners.   

[davejh]

Hi all,
Given the recent flurry of posts on how bitcoin's value will keep on dropping, how does one think about the ever-increasing bitcoin hash rate?
http://blockchain.info/charts/hash-rate
http://blockchain.info/charts/hash-rate?timespan=60days&showDataPoints=true&daysAverageString=1&show_header=true&scale=0&address=

Looks like miners, the core backers and long-term investors in bitcoin, still have plenty of optimism left? And the current market is just speculators' short-term panic?

-ElOmmy

Over the long term, the long term price of BTC will affect the long term hashrate.

If over the long term the price of BTC will not cover the price of electricity then miners will stop mining.

If over the long term the price of BTC exceeds the cost of electricity (to run miners) then more people will be incentivized to purchase and run miners.   

The most important aspect of the BTC price is that it sets the total mining rewards - the trend of mining reward to hash rate ends up being the more interesting trend than BTC price to hash rate. Right now the total mining rewards available per day are pretty huge and so will fund a lot of mining investments (this was written a couple of months ago):

http://hashingit.com/images/articles/20140403/hash-vs-reward.png

http://hashingit.com/analysis/11-the-rewards-for-a-bitcoin-miner