I guess, most peepz is now dumping, the price still falling reaches 0.74BTC as of the moment. and difficulty is also increasing. effect of claymore's Best miner :-)
Yeah, I really do not know why people are so happy. Here is the effect of CZM (this miner): profitability dropped by 2. In fact this is the end of profits on ZEC. Maybe it is good for decentralization, but it is an absolute evil for those who wanted (and made) some money on this. Let me explain in some bogus numbers if you like.
Assume there were 3 players that generated 200, 300, 500 shares for 100 coins/day (10 shares per coin), they received 20 (200/10), 30 (300/10), 50 (500/10) ZEC coins. Assume 1 ZEC = 1 BTC. And they received 20, 30, 50 BTC/day.
Now they have doubled hash rate and generate 400, 600 and 1000 shares. Since number of coins per day is the same (difficulty jump up to ensure it), now we need 20 shares per coin. They still create 100 coins/day and should receive 20 (400/20), 30 (600/20), 50 (1000/20) coins. The same amount, but increased power consumption.
But now some lazy newbies started mining ZEC as well, and lot of old cards are now mining too. Let assume they added +20% of total shares. That is we decrease the ZEC profit by 20% and now receive 16, 24, 40 + new 20 percent of share for same 100 coins/day.
Also we all are rich now and start dumping. The price dropped by 25%, and now in BTC we have 20% less. If 1 ZEC was = 1 BTC, now it is 0.75 BTC, and instead of original 20, 30, 50 BTC/day we and newbies receive 12 (16*0.75), 18 (24*0.75), 30 (40*0.75) and 15 (20*0.75) BTC.
Was: 20, 30, 50
Now: 12, 18, 30 and 15 for new players who was waiting for this miner.
And yes, you should also subtract 2.5% fee from this amount.
Net result: 50% real profit loss. Numbers are not real, but the idea is the same. Do not know why people are so happy. I think only those who was not able to build a miner on Linux are now happy since they have come into the game. But good profitability is behind.
Your analysis has some merit... several valid points if you will... but the other huge factor in all of this is the big drop-off in ZEC price. And while certainly some of that drop is due to the growing supply of coins, it seems likely that another factor is the big problem with many ZEC wallets at the moment. I alone have seen 2... flypool has not been able to send to "z" addresses in over 24 hours. Luckily, (or so i thought) I am using a "t" address from my bittrex account BUT... bittrex's ZEC wallet system has also been down for over 24 hours.
Granted, I am still pretty new to all of this but it seems that problems like this cause concern, which means that a certain % of people that were so gung-ho about ZEC have backed off on that stance, hence, further lowering demand for ZEC, dropping the price even further. Hopefully this will get resolved soon and provide a bit of a rebound but at this rate, it may indeed be back to ETH for a lot of miners very soon.
Thank you Claymore.
