Wouldn't the larger miners give up first if they are bleeding tons of money to electrical costs and not recouping them due to the low BTC price? I thought something just happened with a chinese farm offering thousands of Antminers for sale.
large miners mindset.
"i have $20million upfront beforehand.... and i want 28,000 coins, ill spend $10mill on rigs and $10mill on electric."
no matter what the price of bitcoin is. the cost of rigs/electric stays the same, the price of bitcoin is irrelevant because they never sell bitcoin
hobby miners
"i have $10k and i want $12k in 3 months"
they spend $10k on rigs. and then have to cash out the bitcoin to pay for electric bills each week/month, meaning they are not 100% hoarders and are going paste their 3 month deadlines due to changes in difficulty. thus they never reach ROI die to selling coins.
the smart miners are those that waste their fiat investments first off in electric and rigs. and then simply keep 100% of the bitcoin mined.
after all if your not keeping the bitcoin your mining.. then why the hell are you mining!..
You have this backwards. The "hobby" miners are less likely going to be monitoring electric costs and the price of bitcoin closely enough so that they know right away when costs of mining exceed the value of the bitcoin they are mining.
Large mining farms are going to be monitoring the price of bitcoin and the cost of mining (electricity) very closely. If their goal is to acquire a large amount of bitcoin then they will attempt to do so in the most efficient manner possible. This means they make an initial investment in miners in order to buy bitcoin at a discount (via their electric bill) in the future, however if they both want to acquire additional bitcoin and the cost to mine bitcoin exceeds the value of the bitcoin they are acquiring via mining they will simply buy additional bitcoin via an exchange at a similar rate they would be mining and turn off their miners. To continue to mine at a loss is not economically rational
I agree, it is kind of backwards. Hobbies take money, everyone knows that. If I have 5 rigs and a refrigerator and heating and lights to pay electricity for, I'm not going to care about my electricity bill being higher, I'm just going to pay it. However if I'm running a warehouse full of electricity leeches, then all I'm gonna think about is how to pay the bill.
That being said, Franky is absolutely correct. If you cannot pay the electricity bill without selling bitcoin to do so, you should not be mining, mining is not for you.
