Bitcoin Price and Mining

[morprint]

Many posts on Bitcoin tanking possibly to double digit figures,but surely the price can't keep falling below what it costs to mine a coin. Many miners must surely be pulling out at these prices?

[Easy2Mine]

Most of the new megafarms has electricity of 4-5 dollar cents, they are dumping BTC to pay the electricity costs.
Here in China, they pay the electricity bill every 2 months.
Look at when they first start to deploy megamines here and you already can calculate a lot things.
Look when Bitfury and KNC start to deploy megamines.
2 digits is catastrophic for those farms, even with electricity fee of 3-5 dollar cents.
Those machines are not run on free electricity like some home miners can run theirs by stealing electricity or abusing rent contracts.

[DeadCoin]

Many posts on Bitcoin tanking possibly to double digit figures,but surely the price can't keep falling below what it costs to mine a coin. Many miners must surely be pulling out at these prices?

So you assume miners must have a profit? If price drops to double digits they'll simply have a loss and get out of business, simple as that. Price doesn't depend on them, they depend on the price.

[plopper50]

Do any miners get free electricity from wind/solar power?

[morprint]

Many posts on Bitcoin tanking possibly to double digit figures,but surely the price can't keep falling below what it costs to mine a coin. Many miners must surely be pulling out at these prices?

So you assume miners must have a profit? If price drops to double digits they'll simply have a loss and get out of business, simple as that. Price doesn't depend on them, they depend on the price.

That is my point - Miners go out of business because it is not profitable,  this means less supply on market which means price should rise - miners get back in. Therefore until all the coins are mined the price will/should depend to some degree on miners.

If it is no longer profitable to mine then the total supply of coins will remain at 13mil. The bottom price of Bitcoin should really be above the price of production.

[ravenjt]

That logic only makes sense if there is continual net demand for bitcoins.
But if whales start selling, that will not be the case

[DeadCoin]

Many posts on Bitcoin tanking possibly to double digit figures,but surely the price can't keep falling below what it costs to mine a coin. Many miners must surely be pulling out at these prices?

So you assume miners must have a profit? If price drops to double digits they'll simply have a loss and get out of business, simple as that. Price doesn't depend on them, they depend on the price.

That is my point - Miners go out of business because it is not profitable,  this means less supply on market which means price should rise - miners get back in. Therefore until all the coins are mined the price will/should depend to some degree on miners.

If it is no longer profitable to mine then the total supply of coins will remain at 13mil. The bottom price of Bitcoin should really be above the price of production.

That doesn't matter if demand decreases even more. If there's a panic, loss of faith, major collapse or something else like people turning to a new invention, price can stay down permanently.

[An amorous cow-herder]

That is my point - Miners go out of business because it is not profitable,  this means less supply on market which means price should rise - miners get back in. Therefore until all the coins are mined the price will/should depend to some degree on miners.

If it is no longer profitable to mine then the total supply of coins will remain at 13mil. The bottom price of Bitcoin should really be above the price of production.

You got a fundamental misunderstanding there. This isnt the "real world" where one shuts down a mine a production halts.
It doesnt matter how many people mine or what the difficulty is. The network adjusts difficulty according to hash-rate. The block rewards are given out, on average, every ten minutes. Its constant even if miners drop out. (Well, to be excactly precise, during stages of increasing hash rates the block creation times are slightly faster and slightly slower during decreasing rates. But once that drop, no matter how large, has been adjusted for the normal 10 minute payouts resume).

[CryptoCarmen]

Many posts on Bitcoin tanking possibly to double digit figures,but surely the price can't keep falling below what it costs to mine a coin. Many miners must surely be pulling out at these prices?

So you assume miners must have a profit? If price drops to double digits they'll simply have a loss and get out of business, simple as that. Price doesn't depend on them, they depend on the price.

Of course, miners depends on the price. When price fall, miners left and the rest then mine more coins. When price raise, more miners join, and network gets more stable, and all teh rest miners mine less.

[nuff]

If the price is below mining cost (which it is at now currently) then miners are simply mining at a loss, simple as that. But here's the dilemma. If they stop mining then other miners would gain because difficulty will be down and those miners still mining will be able to get more coins thus winning the competition. If they continue to mine even at a loss, then they'd better have extra (lots of it) funds to cover the losses while hoping prices will rise again where everyone profits. If not more and more mining corporations will go the way of BFL (bankruptcy).

[Wilhelm]

If the price is below mining cost (which it is at now currently) then miners are simply mining at a loss, simple as that. But here's the dilemma. If they stop mining then other miners would gain because difficulty will be down and those miners still mining will be able to get more coins thus winning the competition. If they continue to mine even at a loss, then they'd better have extra (lots of it) funds to cover the losses while hoping prices will rise again where everyone profits. If not more and more mining corporations will go the way of BFL (bankruptcy).

Classic CATCH-22

Stopping with mining is also writing off hardware.

[Odalv]

That is my point - Miners go out of business because it is not profitable,  this means less supply on market which means price should rise - miners get back in. Therefore until all the coins are mined the price will/should depend to some degree on miners.

If it is no longer profitable to mine then the total supply of coins will remain at 13mil. The bottom price of Bitcoin should really be above the price of production.

You got a fundamental misunderstanding there. This isnt the "real world" where one shuts down a mine a production halts.
It doesnt matter how many people mine or what the difficulty is. The network adjusts difficulty according to hash-rate. The block rewards are given out, on average, every ten minutes. Its constant even if miners drop out. (Well, to be excactly precise, during stages of increasing hash rates the block creation times are slightly faster and slightly slower during decreasing rates. But once that drop, no matter how large, has been adjusted for the normal 10 minute payouts resume).

Hmm, I think you have to mine few blocks before difficulty adjust. How long does it take mine next block on 2 laptops ? (but I'm not sure)

[NotLambchop]

...
Hmm, I think you have to mine few blocks before difficulty adjust...

2016 blocks @current difficulty.  Never changes.

[An amorous cow-herder]

Hmm, I think you have to mine few blocks before difficulty adjust. How long does it take mine next block on 2 laptops ? (but I'm not sure)

Yes, difficulty adjusts every 2016 blocks (two weeks on average).
At current difficulty mining a block with two laptops would take, pretty literaly, forever.
Thats not really an issue though, unless hashrate drop incredibly fast during a single cycle it wouldnt matter. Assuming those two laptops have at least the mininum hashing power for difficulty level 1 (roughly 7MH/s), they would mine just as fast as the whole network currently.