Is there not some sort of equilibrium for hash power? If difficulty is constantly reset so that only one block is mined approximately every 10 minutes and there is a 15 bitcoin reward for each block, all the hash power in the world would not RAISE the price. The price may raise the hash power, sure. But at some point the price of bitcoin will start to have a negative affect on hashrate.
For example, say $btc was trading at $50,000 a coin, the market would be so saturated with miners and mining pools that, for many miners, their computing time and electricity consumption would probably be better spent somewhere else as the odds of any one miner finding the correct hash and sealing the block should go down in tandem with hash power increasing.
Topic: can some one explain why people correlate hash power to price (Read 492 times)
September 27, 2017, 04:12:40 PM
It doesn't correlate always but it might be maybe because daily miners are paid 7$million for mining so some people see this as a fall in price the other theory might be as more supply increase the price will increase you can't blame them because it happens in real life also but at the end morw hashrate doesn't have much effect on the price
There is only slight relation between them as far as I know. I'm not sure but if the hash rate decreases this means miners are not demanding that coin and this is followed by a drop in price.
September 27, 2017, 04:04:25 PM
It doesn't correlate always but it might be maybe because daily miners are paid 7$million for mining so some people see this as a fall in price the other theory might be as more supply increase the price will increase you can't blame them because it happens in real life also but at the end morw hashrate doesn't have much effect on the price
September 27, 2017, 09:43:44 AM
Hashrate follows price, in theory
Right. When mining is (or projected to be) highly profitable, miners buy more hardware thus increasing the hashrate. When mining is approximately profitable, they maintain the status quo. When mining is highly unprofitable, they drop turn off miners thus lowering the hashrate.
Yes, but like I said, fundamental matters. Even if everything points to it being more profitable by you pointing your hashrate on there in paper, if you are mining what is essentially a shitcoin, you are going to be mining something that has no solid dev team, no realistic long term projection, and basically anything that makes a coin worth one's hashrate.
There are a lot of shitcoins out there that would be profitable to mine, but they aren't really safe bets long term. This is why I think sooner or later BCash is going to collapse upon itself. The fundamentals just aren't there. No amount of Roger Ver propaganda can change facts.
September 26, 2017, 03:30:05 PM
The network hash rate has just as much--if not more--to do with where miners think the price will go as it does with what the current price is. The price of bitcoin can dip, but if the miners believe it will go back up again, they will continue to mine, even if it is unprofitable for a short period of time. Only if price is not expected to recover will they start turning off their equipment.
September 26, 2017, 01:35:30 PM
If the price increases, mining becomes more profitable. More players enter the market and hashing power goes up. So it is directly correlated. Of course, it takes some time for hashing power to enter the market.
September 26, 2017, 12:51:52 PM
wow, apologies
I completely overlooked the fact that difficulty is adjusted every 2016 blocks. 30% loss is easy to manage then, but loosing China(hypothetical people don't panic ffs) at a "wrong" block might be catastrophic.
I completely overlooked the fact that difficulty is adjusted every 2016 blocks. 30% loss is easy to manage then, but loosing China(hypothetical people don't panic ffs) at a "wrong" block might be catastrophic.
September 26, 2017, 12:05:47 PM
Hashrate follows price, in theory
Right. When mining is (or projected to be) highly profitable, miners buy more hardware thus increasing the hashrate. When mining is approximately profitable, they maintain the status quo. When mining is highly unprofitable, they drop turn off miners thus lowering the hashrate.
Do you know the price of hardware where should i buy this hardware because it is really interesting to mine bitcoin because i want to mine some bitcoin because i also want to earn some extra profit.
September 26, 2017, 11:48:00 AM
Hashrate follows price, in theory
Right. When mining is (or projected to be) highly profitable, miners buy more hardware thus increasing the hashrate. When mining is approximately profitable, they maintain the status quo. When mining is highly unprofitable, they drop turn off miners thus lowering the hashrate.
September 26, 2017, 09:19:47 AM
Hashrate follows price, in theory, but with Bitcoin Cash we've seen miners going back and forth because it was more profitable to mine BCash for a while, but ultimately we are seeing that even if it's more profitable to mine BCash, they are losing hashrate and miners are going back to the real Bitcoin:
fork.lol
BCash is going to be a mess because they are going to have a halving 1 year before the real BTC at this rate.
fork.lol
BCash is going to be a mess because they are going to have a halving 1 year before the real BTC at this rate.
September 26, 2017, 09:18:46 AM
I understand a country banning mining is bad news and bad for the business
but...
lets for a second assume it happened and lets exaggerate and say bitcoin lost 99% of its hash power.
This will only mean we'll try to solve some very high difficulty blocks with low hash rate, but it will adjust after a couple of blocks and blockchain will continue as usual. Why would this effect the price?
If anything the hash power will be more distributed across globe, which is more ideal.
Am I missing something?
but...
lets for a second assume it happened and lets exaggerate and say bitcoin lost 99% of its hash power.
This will only mean we'll try to solve some very high difficulty blocks with low hash rate, but it will adjust after a couple of blocks and blockchain will continue as usual. Why would this effect the price?
If anything the hash power will be more distributed across globe, which is more ideal.
Am I missing something?
Because hashpower is what secures Bitcoin, right not the amount of resources you need to spent to successfully execute a double spending attack is far bigger than any potential gain from such attack - this is how it was possible to create a decentralized system in the first place. So, big drops in hashpower make the network less secure, although there seem to be no linear correlation, for example, during the recent mining switching between BTC and BCH, Bitcoin at some point lost more than 30% of its miners, yet there was no price drop. But if China will ban mining and Bitcoin will lose a high percentage of its hashpower, the price drop would definitely be huge. And what's worse, the government might seize mining equipment and attack Bitcoin with it, so we'll have to react with an algo changing hard fork.
September 25, 2017, 10:18:18 PM
I understand a country banning mining is bad news and bad for the business
but...
lets for a second assume it happened and lets exaggerate and say bitcoin lost 99% of its hash power.
This will only mean we'll try to solve some very high difficulty blocks with low hash rate, but it will adjust after a couple of blocks and blockchain will continue as usual. Why would this effect the price?
If anything the hash power will be more distributed across globe, which is more ideal.
Am I missing something?
but...
lets for a second assume it happened and lets exaggerate and say bitcoin lost 99% of its hash power.
This will only mean we'll try to solve some very high difficulty blocks with low hash rate, but it will adjust after a couple of blocks and blockchain will continue as usual. Why would this effect the price?
If anything the hash power will be more distributed across globe, which is more ideal.
Am I missing something?
It will be more than a couple of blocks before retarget. If there are 2000 of the 2016 blocks remaining and only 1% of the hashrate remaining, it would take something like 16hrs and 40 minutes to find each block. That adds up to something in the ballpark of 4 years to hit the difficulty retarget. Bitcoin would die. There would be no security, no tx's happening, and complete loss of confidence it will ever return to normal. DED
IF it happened to be right near the end of a 2016 block period, it might survive, but the network would grind to a halt until the remaining blocks were found.
September 25, 2017, 07:09:37 PM
I understand a country banning mining is bad news and bad for the business
but...
lets for a second assume it happened and lets exaggerate and say bitcoin lost 99% of its hash power.
This will only mean we'll try to solve some very high difficulty blocks with low hash rate, but it will adjust after a couple of blocks and blockchain will continue as usual. Why would this effect the price?
If anything the hash power will be more distributed across globe, which is more ideal.
Am I missing something?
but...
lets for a second assume it happened and lets exaggerate and say bitcoin lost 99% of its hash power.
This will only mean we'll try to solve some very high difficulty blocks with low hash rate, but it will adjust after a couple of blocks and blockchain will continue as usual. Why would this effect the price?
If anything the hash power will be more distributed across globe, which is more ideal.
Am I missing something?
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