Miners are about to get squeezed big time unless the price of BTC jumps soon

[promojo]

Miners are going to get hit with a ~17% difficulty increase in around 1 day on August 19th, and the price of BTC has fallen from ~$580 to ~$470 over the past two weeks.

These two factors combined are going to put a lot of pressure on miners. I expect to see us reach mining equilibrium (the point at which the difficulty stays roughly the same or even goes down) before the end of the year unless the price of BTC spikes soon.

The rest of 2014 will be very interesting as inefficient hardware and miners with high electricity costs get pushed off the network.

It will also be interesting to see how mining hardware manufacturers deal with this issue and if they can continue to sell new hardware at a profit.

17% is crazy.   I honestly do not see any "to the moon" shot coming.  BTC & LTC are trying to make a come back in the markets.  Too many people went in for the "get rich quick scheme" and bought miners and will probably pay the price for it.   

[promojo]

It's crazy to see that people just blindly continue to add power to the network regardless of what the price/difficulty are doing.  I think part of this is yet another negative of the pre-order disease BTC suffers from.  If you ordered from Company XYZ three+ months ago and the box shows up on your doorstep today what are you going to do, not plug it in?  But would you order that same piece of hardware for the same price today even if it would be delivered tomorrow?  Too often I think the answer to that question is a big fat NO.
Until people truly keep their hands in their pockets and stop financing the development for h/w Co's. two, three quarters away I don't think it will change.

Even Bitmain who had one of the best reps out there have really left a bad taste in people's mouths with the S3, now they want you to wait until September 20th for the next round to ship and pay .66BTC for it TODAY.

I would also like to point out that it is fair to say that any $3,000+ USD miner will only be good for 12 months and then you might as well turn it off... Not even because of power costs... but BTC generation from mining.

[Anddos]

now antminers s3  make 4.50$ aday

[kendog77]

Ouch, the difficulty ended up going up 20.83% this time around, which is even worse than I expected.

https://bitcoinwisdom.com/bitcoin/difficulty

Hopefully we'll get some reprieve for the next difficulty increase or two.

[kendog77]

According to the site below, ~29.4 PH was added to true network over the last 12 days.

https://bitcoinwisdom.com/bitcoin/difficulty

29.4 PH is an insane amount of hashrate,  so hopefully some of the increase can be explained by above average luck, which will help with future difficulty increases as luck normalizes.

To put things into perspective, 29.4 PH/s is:
- 6,533 SP30s at 4.5 TH/s
- 66,667 S3s at 441 GH/s
- 29,400 S2s at 1 TH/s

Speculation points to Bitfury deploying massive private mining farms to explain most of the increase, but the scale we're talking about here is absurd. At 1W/GH, you'd need access to a 29.4 megawatts of power for such an increase.

[Carlos Casa2]

According to the site below, ~29.4 PH was added to true network over the last 12 days.

https://bitcoinwisdom.com/bitcoin/difficulty

29.4 PH is an insane amount of hashrate,  so hopefully some of the increase can be explained by above average luck, which will help with future difficulty increases as luck normalizes.

To put things into perspective, 29.4 PH/s is:
- 6,533 SP30s at 4.5 TH/s
- 66,667 S3s at 441 GH/s
- 29,400 S2s at 1 TH/s

Speculation points to Bitfury deploying massive private mining farms to explain most of the increase, but the scale we're talking about here is absurd. At 1W/GH, you'd need access to a 29.4 megawatts of power for such an increase.

Well, Bitfury can build in 30 days a 20 megawatts low cost data center and its objective is the centralization of the mining.

Watch the video https://www.youtube.com/watch?v=EUaQHlxjrKg

[bozo333]

The crux of the matter is that miners are now in direct competition with the manufacturers. A game miners cannot win.
I bet it's ALL of them now mining first for 2 months and then selling off the equipment. SPondoolies, Bitmain, etc etc all figured out they can make a lot more money milking their machines first and then making even more dumping them on customers.

[promojo]

The crux of the matter is that miners are now in direct competition with the manufacturers. A game miners cannot win.
I bet it's ALL of them now mining first for 2 months and then selling off the equipment. SPondoolies, Bitmain, etc etc all figured out they can make a lot more money milking their machines first and then making even more dumping them on customers.

Do you think Spondoolies is doing that to their customers?  They appear to have a good reputation...

[taipo]

The crux of the matter is that miners are now in direct competition with the manufacturers. A game miners cannot win.
I bet it's ALL of them now mining first for 2 months and then selling off the equipment. SPondoolies, Bitmain, etc etc all figured out they can make a lot more money milking their machines first and then making even more dumping them on customers.

From what I read about Bitmain, they dumped all their leftover S2s into a data centre. So I cant see them selling those off anytime soon, not unless some other large mining operation makes a direct offer for the equipment. Still, they are showing at a steady 2% on the blockchain pie graph, so are in competition with their customers.