Topic: Bad News (Read 4591 times)

If ASIC miners bought their devices for bitcoins then they probably measure ROI in bitcoins too, so they want to make profits denominated in bitcoins. And it could be a problem due to delays and increased difficulty. High margin mining will end soon and after that the price will raise. So I expect miners to hoard bitcoins while they can obtain them for cheap.

Probably many ASIC miners won't be mining at 2014 because they learned about hardware delivery delays and don't like high noise and heat. They would rather buy shares of mining companies that pay dividends in bitcoins. Big miners (companies) probably will be more efficient and they won't have to sell much bitcoins (as they will need them to pay out dividends).

Also, electricity bills with ASICs should be lower than with GPUs for individual miners (I don't think they bought many ASICs, they probably just replaced their GPU farms with ASICs of comparable value), so they have to sell less bitcoins to cover their electricity costs.

Miners are bitcoin optimisits, they invested into hardware. It is harder and harder to obtain bitcoins, so I don't think they want to sell all of their bitcoins as they mine them. And I don't believe many people got into debts to buy mining hardware. It is way too risky, only few gamblers would do it .

So raise of difficulty is a good news.

true

Aaandd.... we've jumped to over 26 M !

For those moving off to LTC, difficulty is pushing 950 at the next retarget 

The reasonable rate would be somewhere where the trend was left off once the bubble run-up started, that is around $32 as it was at the end of February this year.

Currently I mine LTC and wait for ASICs to become "next day deliverables". Once that happens, the unit price of ASICs (price per GHs) would stabilise at a reasonable level and miners can again return to supporting Bitcoin network.

But that extra 3600 could be the weight tip the balance.

More efficient ASIC miner reduce the cost of mined BTC, so they can be sold for lower price but still profitable. For GPU miner with lower profit margin, they will reluctant to sell at today's low price. 

Roughly 3600 new coins are minted each day. Mt Gox trades about 150,000 coins each day. Miners cashing out is a very small portion of the market.

We all know this. The 20M difficulty lets people to switch to Other currency for the current mined bitcoin.

The next message is, when, the bitcoin exchange price raises back to a reasonable rate? Currently it is going down to USD 60 per BTC, I think.

im going to have to say that you are totally right... looks like the currency is less valued and its going to stablize and make just as much money as fpga owners did in the day in wich they lived... USELESS!

Actually no.

What you are saying is that there is an inverse relationship between the (rising) price of mining hardware and the (sinking) price of BTC, because miners need to pay back the high cost of their digital drills.

I would posit that the price drop has nothing to do with price of mining hardware at all.  The amount of mining BTC entering the market each day is too small to have much impact.  I am guessing at less than 2% of all daily traded coins are fresh BTC.

I would guess that the price is dropping because a bunch of "investors" speculated that the price would just keep going up.   It has now been a couple of months and they want their money to do something (other than go down), so they are getting out and putting it into the traditional markets which seem to be slowly on the mend (DOW near ATH).

I would imagine this trend will continue until either the global traditional markets go into another tail spin, or the BTC markets enter another bubble.

Looks to me like the higher the difficulty, the lower the btc value in US$. Probably because as the ASIC miners kick in, difficulty skyrockets; and these ASIC miners need cash to pay for their "investments" in hardware, so they dump their newly mined coins as fast as they can, thus flooding the market with new coins for sale, consequently the drop in btc value in US$.

So, YES, there's an INVERSE relationship between the difficulty and btc value.

It explodes

what happens when the diff gets to the top of that chart. does it just keep going?

Yes, it does.

Here's a post I made in speculation about this about a year and a half ago:
https://bitcointalksearch.org/topic/before-the-next-big-rise-i-just-wanted-to-get-my-two-cents-in-53949

Of the relationship difficulty has with price, it will certainly not rise and fall like the price.(thats the only reason i can think of as to why youd compare the two graphs)

Even if you think the difficulty increase will drop their profits, that was to be expected even if things didnt pan out as expected for them personally. Even in the worst case profit wise, they should still be able to run them for less then the cost of power use, even if it takes years to pay off. Difficulty wont be dropping.

There is. High price encourages people to buy/start their miners. Many of them didn't expect to receive their orders late when the difficulty was already high and they didn't take into consideration that the difficulty increase due to increased demand would be so huge. Even when unprofitable or barely profitable people will mine for some time waiting for a change in price (increase) or difficulty (decrease) that would make their mining more profitable or waiting until someone buys their miner(s).
Difficulty adjusts itself to the price with a considerable time lag, one can see how it occurred in 2011.

zero correlation is simply incorrect. sample size  is simply too small for it to match up on the last leg from april onward, give it time

I totally agree!

That was my point

So basically there is ZERO CORRELATION between difficulty and price. Quite at odds with the exclamations to the contrary.