Bitcoin mining is doomed !

[Voltarius]

If difficulty doubles, it means that effectively the value of bitcoin mining equipment is cut in half, which means that either the price of bitcoin needs to double, or machines need to get cheaper

I would also add that besides the value of the mining equipment is "cut in half", more importantly the income derived from it is cut in half. This matters a great deal to some folks in that their expenses to actually run the mining equipment (e.g. electricity, salaries, rent) may exceed the income. That's when folks are actually losing money the longer they run. For some operations that can't be done for long.

What were to happen if someone was putting on a machine onto the BTC network that would put the next difficulty up 15% or more, what would happen then?
I feel that it's had to happen a lot, but I've never really looked into it very much.

[hedgy73]

Not only will difficulty continue to increase but block reward will halve again to 12.5 towards the end of the year from what I understand.

[alh]

Not only will difficulty continue to increase but block reward will halve again to 12.5 towards the end of the year from what I understand.

I think the next "halving" will actually be in 2016. Since it's "block count" based, it's date is determined by the pace at which blocks are mined. The last estimate I saw was July 2016, but if difficulty continues at this pace (meaning mined faster than "desired"), that will probably pull it earlier into 2016.

[Voltarius]

Not only will difficulty continue to increase but block reward will halve again to 12.5 towards the end of the year from what I understand.

I think the next "halving" will actually be in 2016. Since it's "block count" based, it's date is determined by the pace at which blocks are mined. The last estimate I saw was July 2016, but if difficulty continues at this pace (meaning mined faster than "desired"), that will probably pull it earlier into 2016.

I think that's what he was meaning, if the difficulty keeps doing what it's doing combined with people gaining more miners that has such a high hash-rate, it may push the block rate to go faster than people want, making the block half faster than what we anticipate.

[hedgy73]

Not only will difficulty continue to increase but block reward will halve again to 12.5 towards the end of the year from what I understand.

I think the next "halving" will actually be in 2016. Since it's "block count" based, it's date is determined by the pace at which blocks are mined. The last estimate I saw was July 2016, but if difficulty continues at this pace (meaning mined faster than "desired"), that will probably pull it earlier into 2016.

I think that's what he was meaning, if the difficulty keeps doing what it's doing combined with people gaining more miners that has such a high hash-rate, it may push the block rate to go faster than people want, making the block half faster than what we anticipate.
At least that's how I understand.

Yes sorry I should have made it clearer, that's exactly what I meant. Block halving should be middle of 2016 but the way things are going could feasibly be early 2016 or even end of this year.

[Bananana]

Not only will difficulty continue to increase but block reward will halve again to 12.5 towards the end of the year from what I understand.

Its 2016 June, not end of this year so there is still plenty of mining to go.

[grendel25]

Everything is doomed.  Everyone dies in the end but we just keep on living!  Seriously though, bitcoin mining has been successful and spawned massive economic impacts in all sorts of sectors.  GPU makers love it, private businesses love making asics...well the list goes on.  It doesn't matter if it's doomed because it's already been a huge success... kind of like life.

[Seketsuna]

if price continues to drop, the mining farms are doomed..

[Voltarius]

if price continues to drop, the mining farms are doomed..

Right now at ~$290 the profit is low until it starts to pick back up in price, most miners are just burning more energy than they can produce profit because of per BTC being so low to the difficulty being so high.

[Korbman]

if price continues to drop, the mining farms are doomed..

I think right now at ~$290 Everything is doomed until it starts to pick back up in price, most miners are just burning more energy than they can produce profit because of per BTC being so low to the difficulty being so high.

Any math to back that up, or just speculation?

[alh]

At the risk of being flippant, this is the "Speculation Group" after all.

Using any one of the "profit calculators", current Bitcoin price and difficulty levelgenerally yields "long to infinite time to recover cost". Low electricity cost and and efficient mining makes it possible in individual cases.

[alh]

One more point to add. Nobody that i is currently mining today thinks that Bitcoin will remain at $290 forever. If they did, they would get what they could and exit the Bitcoin space, including selling the coins they currently hold.

Bitcoin as a currency/commodity fails if it never climbs above $290.

[mmeijeri]

That's true, but you don't need to mine if you want to speculate and you don't need to speculate if you want to mine. They're really two independent processes.

[alh]

That's true, but you don't need to mine if you want to speculate and you don't need to speculate if you want to mine. They're really two independent processes.

I would also be willing to bet that a "speculator" is expecting Bitcoin to go above $290. If they thought it was capped at $290, there wouldn't be much point in speculating, would there?

[desertfox470]

I wouldn't say mining is doomed, but if people are actually trying to make a profit from mining they are going to have a hard time. They will need to keep on buying new hardware to meet up with difficulty demands. ATM it is hard for some miners to make a profit with this price btc is at. Most miners have to options to hold btc's or to sell them to pay for electricity. If miners are able to hold them until 2016 I think the price will rise before the halving like what usually happens with coins.

[bassclef]

That's true, but you don't need to mine if you want to speculate and you don't need to speculate if you want to mine. They're really two independent processes.

I would also be willing to bet that a "speculator" is expecting Bitcoin to go above $290. If they thought it was capped at $290, there wouldn't be much point in speculating, would there?

Well, short sellers will. They have dominated the market for the past year, and will continue to sell other peoples' coins on margin all the way to the bottom if they can. Many do not care about Bitcoin much as a tech, but want to make money. Lots of them are not even particularly skilled traders. Shorts are at an all time high and will probably get squeezed big time in the coming months. It will have a spring like effect.

[sase007]

It wont be doomed if price raises...

[picolo]

1.The difficulty is starting to have huge increases again while the price is going DOWN, it already is below 300 !
2.My estimate is that next difficulty is going to be above 15 % and the others following will be somewhere around same level !
3.Soon NEXT GENERATION ASICS will be launched and the difficulty will start raising even more, we might see 30-40 % + increases in difficulty,
and the miners we bought now will be absolute, with no chance to EVER ROI.

With all these, let's just ask ourselves:
Is it still worth mining bitcoin right now ?

It all depends how much you pay for GHS and the maintenance costs. The next difficulty is only slightly rising and who knows how much the next difficulty will be. It will likely raise again slightly.
I think you are likely to ROI if you buy GHS now at less than 0.0015 with low maintenance costs.

[Tupsu]

well I am 100% sp20.   I turn a profit at  diff of 50xxxxxx and btc 200 usd but many people do not make money at those numbers so  i would think a diff of 50xxxxxxx and a price of 200usd would force a leveling of diff.
like  we had between nov 5 and dec 30.

As soon will come the new and more power saving miners. Smarter already selling their SP20

[ilostmyface]

This fella must have free electricity as well. We are coming really close to cost of production.