Blinken (OP)
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January 14, 2015, 07:20:39 PM Last edit: January 14, 2015, 09:37:52 PM by Blinken |
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Considering that the daily volume is ~350,000 coins and total miner reward per day is 3,600 coins, it might be a small piece of the puzzle... but the lower the price goes, the more coins the miners have to sell to keep operating (space, electricity, network connection etc). Is it a vicious cycle?
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Elwar
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January 14, 2015, 07:29:40 PM |
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I have never thought of that!
Why has nobody brought this up before?!?
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odolvlobo
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January 14, 2015, 07:32:41 PM |
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Considering that the daily volume is ~350,000 coins and total miner reward is 3,600 coins, it might be a small piece of the puzzle... but the lower the price goes, the more coins the miners have to sell to keep operating (space, electricity, network connection etc). Is it a vicious cycle?
No because even if miners eventually have to sell all their coins and that is still a small amount.
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Elwar
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January 14, 2015, 07:38:21 PM |
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At the current price, 3600 bitcoins per day times $180...that's over $630,000 per day!
So mining costs $630k per day right now!
If the price drops to $100 that's $360k per day!
And at $300 mining costs over a million dollars per day!
That is so crazy how mining cost changes so quickly.
I wouldn't want to mine. I pay for the machine, plug it in, then the price to keep it running goes up and down depending on the price.
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Dalkore
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January 14, 2015, 09:08:21 PM |
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I have never thought of that!
Why has nobody brought this up before?!?
It has but when anyone has brought it up, they were decried by the community for the most part. We are at a point were mining is almost unprofitable on whole to maintain this level of security and difficulty.
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Elwar
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January 14, 2015, 09:15:55 PM |
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I have never thought of that!
Why has nobody brought this up before?!?
It has but when anyone has brought it up, they were decried by the community for the most part. We are at a point were mining is almost unprofitable on whole to maintain this level of security and difficulty. But why? It should be brought up at least twice a week so that people will finally listen! Maybe once a day for emphasis. When people realize that the cost of mining is the exact same as the price per 3600 per day, no matter what the price and no matter what the real hardware and electricity costs are, it will blow their minds! When the price was $1,000 per bitcoin, the hardware and electricity costs to run Bitcoin were $3.6 million! And now, at a lower price, the cost of hardware and electricity is over $600k. That is like buying a computer for $1000, but if the price of corn goes up, your computer suddenly costs $2000 more. Even after you paid for it. And your electricity price jumps too.
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Elwar
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January 14, 2015, 09:33:08 PM |
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Or maybe change the wording of it and talk about Proof of Work. Nobody has addressed that at all anywhere.
And be sure to let us know which alt would provide the best solution. That is always helpful to know.
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countryfree
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January 14, 2015, 09:37:13 PM |
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Let's not get confused with the cost and revenue of mining. The revenue's going down with the price of bitcoin, while production's cost don't change much, but besides a miner, nobody knows how often they do need to sell some of their production to cover costs. Once a month? Once a week or once a quarter? You've got to be a big fish to be a miner. A single guy with a strong computer cannot be a miner anymore, and today's miners are the biggest holders after the early investors.
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mayax
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January 14, 2015, 10:12:31 PM |
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yes, you cannot mine with your PC anymore.
the electricity bill is huge. i read that a BIG mining farm is paying around of 10K USD per day for electricity.
also, these farms MUST change the hardware yearly.
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Marvell1
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January 14, 2015, 10:44:16 PM |
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yes, you cannot mine with your PC anymore.
the electricity bill is huge. i read that a BIG mining farm is paying around of 10K USD per day for electricity.
also, these farms MUST change the hardware yearly.
The problem is there hardware out there is not efficient enough to support both the difficulty and the cost of electricity. I guess its serves all these manurfactuerers right for now really developing cutting edge 16nm tech. Anyone who could produce hardware of that caliber right now would be sitting on a golden goose. By the time their new 28nm tech comes out it migh be too late to save them if btc drops to sub 100
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mayax
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January 14, 2015, 11:02:58 PM |
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The BIG miners are closing their "shops".
Cex - closed 2 days ago Hashnest - closed today
all these miners are selling their Bitcoin. it's something normal. the market is blocked and saturated.
Conclusion: the price will go down to 10 USD
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doof
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January 15, 2015, 01:24:48 AM |
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Considering that the daily volume is ~350,000 coins and total miner reward per day is 3,600 coins, it might be a small piece of the puzzle... but the lower the price goes, the more coins the miners have to sell to keep operating (space, electricity, network connection etc). Is it a vicious cycle?
Yes, its often modeled in maths as the Lotka Volterra equation. It appears in nature everywhere, such as predator prey models. Price goes up (rabbits breed uncontrollably), then foxes (miners see opportunity) grow too, albeit with lag. Price crashes, now there isn't any "food" for the foxes / miners, so they tend towards extinction / go bust. Cycle continues. ![](https://ip.bitcointalk.org/?u=http%3A%2F%2Fupload.wikimedia.org%2Fwikipedia%2Fen%2F5%2F58%2FCheetah_Baboon_LV.jpg&t=665&c=3ve1URfnN-RRdw)
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drkman
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January 15, 2015, 02:32:02 AM |
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Or maybe change the wording of it and talk about Proof of Work. Nobody has addressed that at all anywhere.
And be sure to let us know which alt would provide the best solution. That is always helpful to know.
POS alts have an advantage over POW coins by being energy efficient yet still maintaining the network (no $10,000/mo electricity bills). Some notable ones that may lead the way or otherwise might make a sneaky investment are SuperNET, Vericoin (New SuperNET launch features coming soon), NXT, maybe Stellar, ARCHcoin.
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Elwar
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January 15, 2015, 08:12:30 AM |
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Or maybe change the wording of it and talk about Proof of Work. Nobody has addressed that at all anywhere.
And be sure to let us know which alt would provide the best solution. That is always helpful to know.
POS alts have an advantage over POW coins by being energy efficient yet still maintaining the network (no $10,000/mo electricity bills). Some notable ones that may lead the way or otherwise might make a sneaky investment are SuperNET, Vericoin (New SuperNET launch features coming soon), NXT, maybe Stellar, ARCHcoin. Ding ding ding!!! And there is the whole point of the PoW threads. Hawk your alts. No thanks, I would prefer the most secure network in the world. Next!
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Q7
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January 15, 2015, 12:09:25 PM |
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Considering that the daily volume is ~350,000 coins and total miner reward per day is 3,600 coins, it might be a small piece of the puzzle... but the lower the price goes, the more coins the miners have to sell to keep operating (space, electricity, network connection etc). Is it a vicious cycle?
It sounds desperate but I'm sure not all miners will do the same. For some, if the price is too low, they would rather not sell at a loss and wait for price to go up again before making the next move.
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mayax
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January 15, 2015, 12:53:32 PM |
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Considering that the daily volume is ~350,000 coins and total miner reward per day is 3,600 coins, it might be a small piece of the puzzle... but the lower the price goes, the more coins the miners have to sell to keep operating (space, electricity, network connection etc). Is it a vicious cycle?
It sounds desperate but I'm sure not all miners will do the same. For some, if the price is too low, they would rather not sell at a loss and wait for price to go up again before making the next move. they have bills to pay, they have to live their life too. they cannot livee with Bitcoin ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) everybody needs fiat currency not a "virtual" one.
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Jamie_Boulder
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January 15, 2015, 12:54:39 PM |
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Well I hope they're selling it...gotta spread it somehow
However at these prices I imagine a lot of them are actually hoarding it in hopes of another boom.
Recent price drops are most likely related to the latest bitstamp scandal (19k coins expected to be dumped).
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Elwar
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January 15, 2015, 12:54:53 PM |
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everybody needs fiat currency not a "virtual" one.
Not everybody
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thriftshopping
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January 15, 2015, 11:02:59 PM |
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Considering that the daily volume is ~350,000 coins and total miner reward per day is 3,600 coins, it might be a small piece of the puzzle... but the lower the price goes, the more coins the miners have to sell to keep operating (space, electricity, network connection etc). Is it a vicious cycle?
It sounds desperate but I'm sure not all miners will do the same. For some, if the price is too low, they would rather not sell at a loss and wait for price to go up again before making the next move. The price is not guaranteed to go up in the future. If the price of bitcoin makes it so the revenue generated by their miners is less then their electric costs then they will turn off their miners.
The OP is correct in assuming that the miners are adding to the supply of bitcoin as they most likely will need to sell a good portion of their bitcoin to cover their electric costs however this fact is not what is causing the price of bitcoin to decline as much as it has been. As the bitcoin economy becomes more mature more people will want to buy additional bitcoin in order to participate in commerce which will offset the effect of the miners selling their mined bitcoin
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