If it is due to miners it can't last forever.
It can and it will. There is no technological paradigm shift after asics on the horizon.
This time I know you are trolling and you know everybody who mined with gpus knows.
Topic: Constant Downward Pressure Due To Miners? - page 2. (Read 3633 times)
It can and it will. There is no technological paradigm shift after asics on the horizon.
This time I know you are trolling and you know everybody who mined with gpus knows.
Miners have nothing to do with the price. If the allocation was not done in such a way, there would have been no incentive to adopt, no one would know about bitcoin, and I'd be worthless. Crying about miners is crying about bitcoin's fundamental implementation. It reeks of bitter late adopters.
the only reason we are not at 50k is because of new coins. It is 100% mining make no mistake. Bubbles come and go as adoption moves closer to value of new coins minted, if we fall too far behind the curve bam crash.
big adoption even has to happen to move against the new coins on the market every day.
big adoption even has to happen to move against the new coins on the market every day.
It's not just miners. It's also individuals who are sitting on a ton of bitcoins from very early on, gradually selling off as they have bills to pay. It's anyone who's long made their profit and are now simply unloading what they have, living their lives, buying whatever they want.
the only reason we are not at 50k is because of new coins. It is 100% mining make no mistake. Bubbles come and go as adoption moves closer to value of new coins minted, if we fall too far behind the curve bam crash.
big adoption even has to happen to move against the new coins on the market every day.
big adoption even has to happen to move against the new coins on the market every day.
If it is due to miners it can't last forever.
Many miners confuse profit from speculation with profit from mining. "If BTC goes down such that mining is unprofitable, we can hold the mined coins until it goes back up" is heard often. But this is illogical. Shut off the miners at that point and simply buy the coins you would have mined. You will pay less than it costs to run the miners. This will also serve to prop up the market such that the mining profitability point will serve as massive support line.
This is true, however doing this would also cause their machines to depreciate in terms of bitcoin as they will produce lower amounts of bitcoin as the difficulty goes up. In reference to the OP, he is correct that there is some pressure on the price of bitcoin from sales from miners, however that has been outweighed by other demand for bitcoin. Miners in general will not sell all of their proceeds as their revenues exceed their "current" costs (electricity) and their "capital" costs are often paid in bitcoin (the miners).
Shutting down miners would cause a decrease in production causing difficulty to drop not rise, decreasing the cost of production until it matched the price of demand. Assuming demand was roughly equivalent to the number of coins produced. Which it isn't.
Fair to say that in bitcoin's case downward pressure is not due to miners. As for alternative currencies, well supply outstrips demand on a daily basis, and when it doesn't it's usually because supply is being held back to artificially increase cost so they can be dumped for a higher return.
The miners would not sell on lose, at least the smarter ones, so we know that most of the miners are holding at least half of the mined coins for an eventual bubble.
If they are smart, they would have known it would be cheaper to buy coin directly rather than to mine for it.
Miners are miners, not neceserly investors.
Many miners confuse profit from speculation with profit from mining. "If BTC goes down such that mining is unprofitable, we can hold the mined coins until it goes back up" is heard often. But this is illogical. Shut off the miners at that point and simply buy the coins you would have mined. You will pay less than it costs to run the miners. This will also serve to prop up the market such that the mining profitability point will serve as massive support line.
In reference to the OP, he is correct that there is some pressure on the price of bitcoin from sales from miners, however that has been outweighed by other demand for bitcoin. Miners in general will not sell all of their proceeds as their revenues exceed their "current" costs (electricity) and their "capital" costs are often paid in bitcoin (the miners).
The miners would not sell on lose, at least the smarter ones, so we know that most of the miners are holding at least half of the mined coins for an eventual bubble.
If they are smart, they would have known it would be cheaper to buy coin directly rather than to mine for it.
Miners are miners, not neceserly investors.
Many miners confuse profit from speculation with profit from mining. "If BTC goes down such that mining is unprofitable, we can hold the mined coins until it goes back up" is heard often. But this is illogical. Shut off the miners at that point and simply buy the coins you would have mined. You will pay less than it costs to run the miners. This will also serve to prop up the market such that the mining profitability point will serve as massive support line.
It's funny because people have been saying this for around four years at this point. But it's something that people just don't want to hear. The idea of mining for profit is very attractive to certain people and if they can do it, despite whether or not they would be better off just buying, they just do.
The miners would not sell on lose, at least the smarter ones, so we know that most of the miners are holding at least half of the mined coins for an eventual bubble.
If they are smart, they would have known it would be cheaper to buy coin directly rather than to mine for it.
Miners are miners, not neceserly investors.
Many miners confuse profit from speculation with profit from mining. "If BTC goes down such that mining is unprofitable, we can hold the mined coins until it goes back up" is heard often. But this is illogical. Shut off the miners at that point and simply buy the coins you would have mined. You will pay less than it costs to run the miners. This will also serve to prop up the market such that the mining profitability point will serve as massive support line.
The miners would not sell on lose, at least the smarter ones, so we know that most of the miners are holding at least half of the mined coins for an eventual bubble.
If they are smart, they would have known it would be cheaper to buy coin directly rather than to mine for it.
Miners are miners, not neceserly investors.
The miners would not sell on lose, at least the smarter ones, so we know that most of the miners are holding at least half of the mined coins for an eventual bubble.
If they are smart, they would have known it would be cheaper to buy coin directly rather than to mine for it.
The miners would not sell on lose, at least the smarter ones, so we know that most of the miners are holding at least half of the mined coins for an eventual bubble.
Blaming miners is like blaming dollars for inflation. The price reflects the market. There is a supply, and a demand. Both move constantly, and the price is the intersection. 25btc/10 minutes affects the supply. That is all.
Miners have operating costs (in addition to hardware amortization costs) . Small miners can cover them out of their income or savings, but professional miners cannot do this and they will sell at least the portion that is needed to cover their expenses on a regular basis. When difficulty rises and price does not match this rise, profit margins decrease and thus more has to be sold than before.
While 3600 BTC/day is largely inelastic, with the advent of ASICs we have experienced the last great technology jump we will have for a long time and pushed profit margins to heights unimaginable, which has lead to a supply shock because miners began hoarding that which has previously flown to the market. This is of course unwinding now.
Here is a a chart with the daily percentage growth of hashrate, which indirectly is indicative of the state of margin profits in the recent past. You can observe that it has been steadily decreasing since ASICs were widely introduced (even before bubble pop).
In short, mining is a business and it is not the business of price speculation.
While 3600 BTC/day is largely inelastic, with the advent of ASICs we have experienced the last great technology jump we will have for a long time and pushed profit margins to heights unimaginable, which has lead to a supply shock because miners began hoarding that which has previously flown to the market. This is of course unwinding now.
Here is a a chart with the daily percentage growth of hashrate, which indirectly is indicative of the state of margin profits in the recent past. You can observe that it has been steadily decreasing since ASICs were widely introduced (even before bubble pop).
In short, mining is a business and it is not the business of price speculation.
Good analysis. I am quite surprise some of the BTC mining farm didn't go bust when the capital depreciation cost and operation cost is higher than what they mine.
I think lots of miners have gone bust so to speak. Lots of people have been forced out of the mining market in the last year.
I am a miner but I hold on to 90% of mined coins. They're put into a cold storage. You have to be stupid to sell your coins at today's price. We know it's going to be worth much more in a year or two.
Bingo. Me too.
The only reason I'm still running my ancient BFL miner is that I haven't had to put the AC on yet and my miner acts as a bit of a dehumidifier since I turned the heating off. Being below grade helps.
I mine directly into a paper wallet. I wouldn't think of selling any coins now. That would just be crazy.
In other but sorta related news, the immense growth of the hashrate currently has the next halving occurring somewhere around half a year earlier than first predicted based on current growth rates.
Cha Ching.
Cha Ching.
Miners have operating costs (in addition to hardware amortization costs) . Small miners can cover them out of their income or savings, but professional miners cannot do this and they will sell at least the portion that is needed to cover their expenses on a regular basis. When difficulty rises and price does not match this rise, profit margins decrease and thus more has to be sold than before.
While 3600 BTC/day is largely inelastic, with the advent of ASICs we have experienced the last great technology jump we will have for a long time and pushed profit margins to heights unimaginable, which has lead to a supply shock because miners began hoarding that which has previously flown to the market. This is of course unwinding now.
Here is a a chart with the daily percentage growth of hashrate, which indirectly is indicative of the state of margin profits in the recent past. You can observe that it has been steadily decreasing since ASICs were widely introduced (even before bubble pop).
In short, mining is a business and it is not the business of price speculation.
While 3600 BTC/day is largely inelastic, with the advent of ASICs we have experienced the last great technology jump we will have for a long time and pushed profit margins to heights unimaginable, which has lead to a supply shock because miners began hoarding that which has previously flown to the market. This is of course unwinding now.
Here is a a chart with the daily percentage growth of hashrate, which indirectly is indicative of the state of margin profits in the recent past. You can observe that it has been steadily decreasing since ASICs were widely introduced (even before bubble pop).
In short, mining is a business and it is not the business of price speculation.
Good analysis. I am quite surprise some of the BTC mining farm didn't go bust when the capital depreciation cost and operation cost is higher than what they mine.
Looking at a 1 yr chart you will notice that Bitcoin constantly get's beaten down since December 2013.
For your convenience: http://bitcoincharts.com/charts/bitstampUSD#rg360ztgSzm1g10zm2g25zv
The November 2013 rise to $1,200 also caused an immense rise in hashing power and difficulty (because mining suddenly was so profitable).
So this correlates.
There is no free lunch, somebody has to pay the immense mining network (electricity, hardware, etc).
It looks like the Bitcoin holders do, because I'm sure that miners have to sell a large portion of mined coins on a daily basis just to cover electricity.
And that's exactly what the charts are reflecting.
Looking at it this way, the downtrend will only accelerate as difficulty rises?
For your convenience: http://bitcoincharts.com/charts/bitstampUSD#rg360ztgSzm1g10zm2g25zv
The November 2013 rise to $1,200 also caused an immense rise in hashing power and difficulty (because mining suddenly was so profitable).
So this correlates.
There is no free lunch, somebody has to pay the immense mining network (electricity, hardware, etc).
It looks like the Bitcoin holders do, because I'm sure that miners have to sell a large portion of mined coins on a daily basis just to cover electricity.
And that's exactly what the charts are reflecting.
Looking at it this way, the downtrend will only accelerate as difficulty rises?
you think a lower supply and higher demand causes a lower price? if difficulty increase, so will the price. you yourself cited cost of production as the reason miners don't hoard their coins. that cost will increase with difficulty increases.
Miners have operating costs (in addition to hardware amortization costs) . Small miners can cover them out of their income or savings, but professional miners cannot do this and they will sell at least the portion that is needed to cover their expenses on a regular basis. When difficulty rises and price does not match this rise, profit margins decrease and thus more has to be sold than before.
While 3600 BTC/day is largely inelastic, with the advent of ASICs we have experienced the last great technology jump we will have for a long time and pushed profit margins to heights unimaginable, which has lead to a supply shock because miners began hoarding that which has previously flown to the market. This is of course unwinding now.
Here is a a chart with the daily percentage growth of hashrate, which indirectly is indicative of the state of margin profits in the recent past. You can observe that it has been steadily decreasing since ASICs were widely introduced (even before bubble pop).
In short, mining is a business and it is not the business of price speculation.
While 3600 BTC/day is largely inelastic, with the advent of ASICs we have experienced the last great technology jump we will have for a long time and pushed profit margins to heights unimaginable, which has lead to a supply shock because miners began hoarding that which has previously flown to the market. This is of course unwinding now.
Here is a a chart with the daily percentage growth of hashrate, which indirectly is indicative of the state of margin profits in the recent past. You can observe that it has been steadily decreasing since ASICs were widely introduced (even before bubble pop).
In short, mining is a business and it is not the business of price speculation.
Miners can only mine 3,600 bitcoins a day. That's not enough to put any pressure on the exchanges. Also, not every miner sell the mined coins. I am a miner but I hold on to 90% of mined coins. They're put into a cold storage. You have to be stupid to sell your coins at today's price. We know it's going to be worth much more in a year or two.
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