But miners will want to upgrade their rigs or they will lose money on electricity. the result of existing miner upgrade alone will likely double the difficulty.
Many are not upgrading. Many are holding off because they don't see ROI in a decent time. Also, to double the difficulty, the network hash rate would have to be doubled. The present network hash rate at my writing is 456,465,126 GH/s [Per Bitcoin Wisdom]. If we were to double it with nothing but BITMAIN S7's, it would take 93,922 BITMAIN S7's. It would also take 113,646,667 watts to power all of those S7's. I'm not going to take the time to determine how many SP50's it would take or any other rigs the other "big boys" will be coming out with.
If the big boys were to choose rolling out with a lot of hash power NOW (during fall and winter) they will only hurt themselves. Especially, with price of bitcoin where it is presently. It would be more advantageous for them to wait until late spring to roll out a lot of hardware - adding to the network hash rate. The price of bitcoin will probably be higher in late spring and they can begin to put the squeeze on each other (big boys). You heard me right, "...each other." They would create a hash rate war between each other. Which, in turn, would increase the amount of time for them to ROI even though their ROI was short [At one time] due to acquiring the rigs at cost.
So, yes, many miners in areas with higher electricity costs will want to upgrade their rigs to avoid losing money on electricity costs. But this requires them shutting off their old rigs [Effectively taking hash power off the network and adding new hash rate]. It will take a LONG time to double the network hash rate and the difficulty in this manner. So, existing miners upgrading will not likely double the difficulty. Who else, besides BITMAIN, is rolling rigs out in large quantity and selling them to home miners and larger outfits? If you say, Spondoolies, that is only one outfit and there won't be very many large farm miners investing in the price they will ask for the SP50. Especially, if they ask for more than $35,000 for it. SFard's isn't busting out efficient gear in large quantity. The truth is, the home miners and large farms mostly have BITMAIN to depend on and that's about it. If anyone is doing serious "upgrading," it would be "the big boys." However, don't forget if they add too much they are in affect creating a hash rate war and it would be counter intuitive for them to do so at present price of bitcoin.
Yes some miners will quit but new big miners will enter this betting game too. and if bitcoin price peaked near the halving, im sure that alot of existing miner will spend their coin to upgrade their mining rig.
We all know the price of rigs get higher if the price of bitcoin increases at a rate faster than difficulty. I'm counting on a bitcoin price peak. That's when I sell my S7's on eBay at roughly the same price I paid for them and wait for the next generation rigs to see if it's worth getting back in the game or not.
btw its not about competing with other miner, its simply how to get more bitcoin from your initial bitcoin investmen. ie: if i spend 3 btc, can i get 6 btc in less than 1 year by upgrading my rig ?
You mis understand. I'm saying "the big boys" would be competing against one another for market share if they begin to crank out a lot of hardware to add to their farm. If that's not competition, I don't know what is.
Yes, to determine "ROI" is determine "...if I spend 3 btc, can I get 6 btc in less than 1 year by upgrading my rig?" I say, "YES," if the price of bitcoin does what I hope it will do and after selling my rigs on eBay. Also, I don't do my calculations in btc. I do them in dollars.
