Topic: A rally is inevitable - page 2. (Read 5285 times)

I disagree, ASICS are populating the world, thousands and thousands of them being built and sold.  Bitcoin mining is the only thing an ASIC does, once someone has an ASIC they are a guaranteed bitcoin supporter.  The ASIC population of the world is setting up the basic network, the core (dispersed) infrastructure that forms the foundation of bitcoin's future.  

It will just take a few years for the whole thing to be rolled out:  Mass-ASICS and an upgrade of the exchanges is what's currently happening.  ASICS aren't killing bitcoin at all, they are simply the foundation and they will get cheaper too, and having a network of tens of thousands of ASICS (will probably end up being hundreds of thousands) is plenty!  We don't all need to be mining.

More companies developing ASICS is good news!  More ASICS being built at all is good news, after all, they are BITCOIN ASICS!

There are even services like middlecoin.com, which always mine the most providable altcoin, directly sell it and pay you out in BTC.

Year, put this is mining without purpose (from a BTC perspective), so enjoy it while it lasts.

*For all that don't know it (seem to be a lot recently) the purpose of mining is to secure the network and not to print money.

I don't understand why so many people make the statement that GPU mining is dead. It may be dead for BTC but there are still plenty of alt currencies that can turn a respectable profit with little upfront investment. With the ability to trade alt coins for BTC on many exchanges it seems like GPU mining is still perfectly viable meaning that the entry fee into the BTC market is still within reach of many individuals. There may be a lower return than in the past but it's still sustainable for many alt coins at current difficulty levels and block rewards (particularly if you have a means of getting power for free). I'm no expert on crypto currency by any means but it seems to me that unless I'm missing something (which is very possible) that GPU mining is still very much alive and kicking and is a viable option for those looking to make some extra coin by putting their gaming computers to work while they're not gaming.

in the past we have seen, that a lot are still mining although it is clearly not profitable. they only speculated on higher prices a few months later, and my guess is they were right. if that pattern repeats, i don't know where the mining-top is. and even less, where the price top is (or should be).

I think the other thing that is looming is the glut in the ASIC market; there are a lot of people that have pre-ordered hardware, and they will still get it on put it online.  However the hardware manufacturers are still going to keep pumping out new ASICs even as the ROI on new purchases becomes achievable; this will lead to a glut on the market.  At that time, prices of the ASICs will begin to drop; we have already seen it with the Block Erupters price going down as people are realizing that there is no way to recover their investment.  That will slow growth in the mining sector until the prices become reasonable again.

Of course the other factor is the exchange rate, which if it goes up again will drive renewed interest in mining.


Bottom line - price of hardware will balance with value of BTC and difficulty, so that anyone can still invest in it.  

You can grow pretty decent pot with 400W of power.

People will buy the 6k USD mining rigs and run them anyway, because why not. 400W power drain is a drop in the home budget.

Suckers

The big difference between the 2011 bubble and now is that most people already had graphics cards so there was no barrier to enter mining so you didn't need to make a profit. Now you need serious money to buy ASIC hardware so you have to make a return which is unlikely. Already 5GH/s Jalepenos will struggle to break even and most buyers have yet to receive them. If there's no profit in mining who will do it ?

Just read the latest Avalon update, it also showed how a terrible mess the mining industry is now, someone might kidnap their relatives to get chips delivered  

This spring's rally is caused by reward halving and an anticipation of 20x increase in difficulty when ASIC devices are mass deployed, but now difficulty has almost reached 20x without any sign of stop, the projection of future exchange rate will change accordingly

I suppose that those who bought large amount of mining equipments are long term investors, they have certain amount of risk fiat money that they would like to throw into bitcoin,  mining equipment is one of the investment option. They don't want to cash out quickly, since anyway those risk money will be converted into bitcoin and stay there for a couple of years. And if their financial situation improved (Which is likely after huge amount of QE3 money), they might invest more

But the risk is that they didn't know how large BFL's order queue is, and how many underground ASIC factories are opening up in china. That will eventually make each devices' daily coin return less than 0.1 coin

Once for a while, GPU mining rig also mined at a loss at the end of 2011, but that never lasted long, since people turned off mining rigs and purchased coin directly, which supported the exchange rate

The next natural step is that people will start to use mbtc as a unit of count, the day that you can acquire a single bitcoin without huge amount of capital will soon be gone

Not like we already had this a 100 times, but well:



After the 2011 Bubble mining was not privitable, too. For some time the difficult even decreased as people stopped mining. It didn't kill Bitcoin.
If you have some basic understanding of economics you will see that mining is designed to be a 0 sum game for the miner. The device used for it doesn't matter. As long as mining is profitable, people will start mining to make money until it reaches an equilibrium with running expenses. This is true no matter what is used to mine, be it CPUs, GPUs, ASICs or Windmills.

Also, that mining get's professional and more mining companies develop that have advantages over private miners and push them out is expected, no matter what device is used. That's just how any marked develops. Why should BTC (or cryptocurrency in general) be a difference here?

I know, in real life, 8 people with bitcoins and none of them has ever mined. I have mined for half an hour, only because I wanted to see how it works. People will continue to invest in bitcoins as a store of value, buying them at an exchange.

I think that we are already at the stage where no future mining investment will pay for itself. This means fewer miners and therefore fewer people with Bitcoin to spend. This either means that Bitcoins become more valuable because they are harder and more costly acquire or, more likely, the whole thing will pretty much die because business won't bother to make the investment to accept it because there are fewer people with it and so it will lose its current popularity and never gain any more traction.

The best thing going for Bitcoin was the democracy of mining in that anybody with a graphics card can generate a small amount, now you need serious investment in ASIC kit that is unlikely to make a return. All the GPU's are now useless and so the generation phase that was anticipated in the original design has ended. Without significant market share and large transactions fees, its pointless for anybody to make an investment in mining.

So my prediction is a slow downward spiral in value from now on. Meanwhile hash rates will continue to rocket until the ASIC manufacturers start to fold resulting in one or two large miners left operating i.e. a large likelihood of the dreaded 51% scenario. Then Bitcoin will be truly worthless.

It's a real shame, I really wanted it to succeed but I think ASIC's came too soon in its life cycle and killed it.

I understand the argument now. Thank you 

That's true for small miners, that only run them to get BTC. The guys that run big farms have significant operational costs that have to be covered by selling part of their mining income.

As mining provability decreases, the % of BTC that they have to sell immediately to cover their expenses increases. Therefore the overall % of fresh mined BTC that are sold immediately increases.

But honestly, at this point I don't think that mined BTC have a significant impact on the exchange rate anymore.

To the rally, I don't think we will see a real increase in Value in the next 6 Month or even longer. But that's OK.

All the "big names" we have in BTC now are people that joined it during the 2011 Bubble, staid after in and build the services that made BTC what it is today.

This time 100th the amount of people as during the 2011 Bubble came into Bitcoin, if the same % as 2011 stay and start building services they will harvest the fruits in ~2 Years. But for that I believe it's better if it gets a litte more silent around BTC for a while.

Why will they dump their coins because of increased competition? If I recieved less coins, I would hold on to them stronger than before.

And if you buy ASICs with bitcoins, don't you want bitcoins back (not FIAT)?

The majority of the ASICs is payed for with Bitcoins so that will actually be the opposite effect you guys are hoping for. Added to that existing ASIC miners have an incentive to dump their coins because of increased competition.

The only hope for a new rally is a new media hype.

Yes. But when difficulty has reached the right level for the current price, people will start to invest in coins instead of mining equipment.

Difficulty follows price not verse visa, this has been debated to death already (tip to OP your side always loses)
So if people overdid it with their mining investment, they made a bad investment, and that's it.

It will get to the point where ASICs don't even pay for the electricity it costs to run them, it happend with GPUs and it will happen again.