Does the number of miners reduce when the price drops?

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Quote from: CryptoHeadlineNews on August 09, 2024, 04:23:48 PM

There are lots of Solo miners who will be very happy if major mining farms take a break just even an hour due to the fall in the price of Bitcoin, so with regards to the question of do miners drop when the price of Bitcoin drops, then I will say they don't, because considering how much these miners generate after mining each block, it's enough to cover any loses caused by a recent price drop. However, I just checked the recent block mining, and all I could see are still the major Bitcoin miners, which is a clear sign that no miners left due to the fall in price of Bitcoin. Example, miners such as AntPool, SpiderPool, F2Pool, and Foundry USA Pool., which have been known to consistently mining the recent Bitcoin blocks.

In the long run, the expected profit of both solo mining and pool mining will actually be the same. If big miners are willing to scale down their operations, you're likely screwed over as a small miner or a solo miner already. If you're a small miner, you're likely to join a pool to ensure that your payouts are regular and consistent. I isn't likely that any of the bigger miners will shut off their equipment just because the price has dropped.

For most solo miners, they're usually into lottery mining which is not affected by the price of Bitcoin. Their decisions made should largely be independent of the price fluctuation.

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It's not something that happens automatically. When there is a long bear market, so miners can struggle to keep the operations running because they mine roughly the same amount of BTC than before (or, worse, half the amount if there was a halving recently). They get a much smaller value out of it because Bitcoin is cheaper than it used to be. It makes sense that some miners can drop out under such conditions, but then the difficulty rate adjusts over the course of 2 weeks, so it doesn't matter than miners are dropping out. It's a very short-term issue because even if a very significant amount of miners stops mining, there will be a correction over a couple of weeks to compensate for that.

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Quote from: deepskydiver on August 04, 2024, 05:40:55 AM

Just wondering if anyone has noticed a trend of longer block times when the price drops. I presume some proportion of miners become unprofitable. And that of those - some might need to convert to fiat in the short term to cover costs and so pause mining.

This question is a question that has to do with research, I know that miners do mine bitcoin as form of their business and if the price of bitcoin reduced that will not make miners who seems mining of cryptocurrency as their personal business to reduced their activities of mining, I think that it's impossible for such thing to take place, so I believe that we have to understand the procedures of mining if we wishes to be among, because I'm seeing mining from my understanding as their work and they know the effects of mining and how to overcome any challenges that occur on it.

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Quote from: deepskydiver on August 04, 2024, 05:40:55 AM

Just wondering if anyone has noticed a trend of longer block times when the price drops. I presume some proportion of miners become unprofitable. And that of those - some might need to convert to fiat in the short term to cover costs and so pause mining.

There are lots of Solo miners who will be very happy if major mining farms take a break just even an hour due to the fall in the price of Bitcoin, so with regards to the question of do miners drop when the price of Bitcoin drops, then I will say they don't, because considering how much these miners generate after mining each block, it's enough to cover any loses caused by a recent price drop. However, I just checked the recent block mining, and all I could see are still the major Bitcoin miners, which is a clear sign that no miners left due to the fall in price of Bitcoin. Example, miners such as AntPool, SpiderPool, F2Pool, and Foundry USA Pool., which have been known to consistently mining the recent Bitcoin blocks.

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During the long price fall in 2018, the mining hash rate fell sharply. The hash rate fall was delayed 6 months relative to the price fall

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Quote from: Alone055 on August 07, 2024, 01:22:57 PM

There can be minor delays in the time but block times generally don't get longer because even if some miners stop mining, the blocks will still be mined by others.

If some miners suddenly stop mining, the average block time will increase until we have the next difficulty adjustment.
Once the difficulty is adjusted (assuming the total hash rate hasn't decreased by more than 75%), the average block time will become 10 minutes again.

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Quote from: deepskydiver on August 04, 2024, 05:40:55 AM

Just wondering if anyone has noticed a trend of longer block times when the price drops. I presume some proportion of miners become unprofitable. And that of those - some might need to convert to fiat in the short term to cover costs and so pause mining.

Miners already know the advantages and disadvantages of what they are doing, so I believe that if anything should happen in bitcoin they miners I believe that they will know the best method to handle it, so looking at what's is happening, miners doesn't not panic like cryptocurrency investors because they have already know the way things goes base on they have experienced, so any profit and loss miners face they know how to tackle it.

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Quote from: Mia Chloe on August 04, 2024, 05:43:43 AM

No miners don't drop when price drops. What happens is that miners try to wait a little longer before confirming transactions with the simple logic that others trying to initiate or broadcast a transaction will tend to increase their fees so that their transactions will be confirmed faster instead of waiting in the MEMPOOL , in addition to them competing for transactions with higher fees . this is the reason why nodes have a minimal purge fee. Mining requires a lot of hash rate especially if you are going to be confirming transactions. The hash power in turn also invites high electricity costs and for miners to be in profit, they would prefer higher fees.

Infact it's important to know that the hash power required to confirm transactions is quite high therefore solo miners rarely confirm transactions rather they depend on Proof of work rewards for finding valid hashes.

If miners increase and decrease when fee drops then during halving when fees were high there would have been a drastic increase in number of miners.

What do you mean? It was a meme that you should buy bitcoin when there are cheap rigs being sold at bottom of bear run. Miner capitulation was a thing last time i checked at least in cases where when people were mining with their own rigs. And all of my friends stopped mining in

These days with huge rig farms, i am not so certain how they deal with this, but back in time when it was more home-mining and idea of decentralization was pretty clear, it was common to stop mining when it wasn't profitable against the electricity costs.

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Quote from: deepskydiver on August 04, 2024, 05:40:55 AM

Just wondering if anyone has noticed a trend of longer block times when the price drops. I presume some proportion of miners become unprofitable. And that of those - some might need to convert to fiat in the short term to cover costs and so pause mining.

There can be minor delays in the time but block times generally don't get longer because even if some miners stop mining, the blocks will still be mined by others. Less miners mean less competition for other miners and they will have more blocks to mine.

One of the probable reasons for blocks or transactions getting stuck at certain times is network congestion. When the price either starts going up or down, there tends to be a higher amount of on-chain transactions because people either transfer their Bitcoin from their wallets to sell them when the price is dropping or they buy from exchanges and send them to their wallets when it's rising.

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Quote from: deepskydiver on August 04, 2024, 05:40:55 AM

Just wondering if anyone has noticed a trend of longer block times when the price drops. I presume some proportion of miners become unprofitable. And that of those - some might need to convert to fiat in the short term to cover costs and so pause mining.

I don't think there is a correlation between the Bitcoin price and the mining activity of a miner. A miner can stop his mining activity only if the price reaches to a level where mining becomes unprofitable. Otherwise 10-12% volatility doesn't create a panic in mining community.

When a person invests so much money into mining equipments, he usually does it with a long term goal. So a price correction usually doesn't scare the mining community at all.

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Quote from: deepskydiver on August 04, 2024, 05:40:55 AM

Just wondering if anyone has noticed a trend of longer block times when the price drops. I presume some proportion of miners become unprofitable. And that of those - some might need to convert to fiat in the short term to cover costs and so pause mining.

Miners has never been a plague of accumulating bitcoin without referring to exchange their coins to the fiats. This is just like the investors who sells their coins for purchases since the entire societies does not accept bitcoin for payments but fiats.
So the present circumstances of Bitcoin price never scares miners from mining unless the miners decides to stay back. It is still like inventors who buys more of bitcoin in addy to their holdings without undermining the high price values of bitcoin while some buys DCA at the Dip.

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You just need to consider it from an economic and business perspective.

Big miners are paying for their electricity and space upfront, the ASICs themselves are of course being paid upfront as well. These are sunk cost. If the miner doesn't mine when the profitability drops, then they are losing out. The ASICs that these farms are running usually have a fairly good profit margin and they are meant to be used for quite a while. Unless the prices dips substantially, resulting in certain groups of miners spending more paying electricity than the amount of Bitcoins that they're getting back, then they won't turn it off.

Even if they do, they should actually continue mining. If the electricity is being pegged at a certain capacity and space are being paid upfront, then not using those would basically mean that they cannot recoup any of the loss.

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Quote from: Casdinyard on August 04, 2024, 05:37:06 PM

Might just be the case where these people's going to be the last to stand before 2140 comes around and the last bitcoin block gets mined lol.

What are you saying?
In 2140 (which is just an estimation and it can be earlier or later than that), we won't have the last bitcoin block, but we will have the last block with the newly generated coins.

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Quote from: deepskydiver on August 04, 2024, 05:40:55 AM

Just wondering if anyone has noticed a trend of longer block times when the price drops. I presume some proportion of miners become unprofitable. And that of those - some might need to convert to fiat in the short term to cover costs and so pause mining.

I think amongst everyone in the crypto industry, the only demographic that never really at the very least is vocal about leaving their base is the mining sector. Like sure, there's going to be a couple of detractors here and there, this is a business venture after all and not everyone's going to weather the pressures of the market all the time, but relatively speaking, most of the people who have started mining as early as GPU mining was a thing still stuck around and remained operational even now.

Might just be the case where these people's going to be the last to stand before 2140 comes around and the last bitcoin block gets mined lol. And even then I'm pretty sure they'll serve as validators of transactions, with that kind of security there's no reason why you'll have to leave your post as a miner.

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Quote from: deepskydiver on August 04, 2024, 05:40:55 AM

Just wondering if anyone has noticed a trend of longer block times when the price drops. I presume some proportion of miners become unprofitable. And that of those - some might need to convert to fiat in the short term to cover costs and so pause mining.

In the simplest terms, the miners who are mining at a loss when the price drops will stop mining. That means blocks are found more slowly on average, so average block times are longer. When the difficulty is adjusted (every 2016 blocks), the average block time moves back to 10 minutes.

However, the mining business is not that simple, so I doubt there is any real correlation between price changes and the block times in the short term.

OTOH, the average block time is correlated with the change in price in the long term because the average block time used in the difficulty measurement lags the current average block time. This explains why times between halvings have been significantly shorter than the expected 4 years.

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Quote from: pakhitheboss on August 04, 2024, 08:09:48 AM

It is a known fact arguing at this point does not make any difference as it is known Bitcoin mining is not that easy as it used to be 4 years back for small miners.

As a single individual or as it is called solo miner it is not visible to mine bitcoin now because it is now expensive to set up the mining rig to compete with the large mining pools but that doesn’t mean you can mine as an individual you just join up with other miners to create a pool and share the dividends.

Quote from: pakhitheboss on August 04, 2024, 08:09:48 AM

Quote

The network difficulty, already constantly increasing, has further increased significantly, making the creation of new blocks more expensive and complex.

BTW, it meant more advance infrastructure is required now to mine Bitcoin.

There is no denying this fact the bitcoin mining equipment has definitely improved causing other little mining equipments to not be useful anymore but the argument here is no matter the sophisticated mining tools we have the average 10 minutes overall can not be breached because it is the standard which is set by the difficulty adjustment. If after the 2016 blocks the average mining time is lower than 10 minutes the difficulty target is adjusted to be higher than the existing one and if after the 2016 blocks mined the average time is higher than 10 minutes then the difficulty target is reduced to fit into this 10 minutes average limit. This is the reason why you see the total 210000 blocks needed for an halving to occur averagely falls into 4 years apart.

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Quote from: hosseinimr93 on August 04, 2024, 08:31:58 AM

That doesn't explain why bitcoin blocks may take more than 10 minutes to be mined.
The article truly says that it's now more difficult to mine bitcoin than it was years ago, but your conclusion is wrong. Blocks being mined more difficult doesn't mean they take more than 10 minutes to be mined.

Blocks can be found shortly one after another within several seconds, or fter less or more than 10 minutes - the average block time.

With higher network difficulty, Bitcoin miners have to invest more to get enough powerful mining hashrate to compete with other miners from other mining pools to find block. In a simple way, same block time in 2024 and in 2017 does not mean same hash rate used to mine one block. Cost invests for mining in 2024 is higher than cost in 2017 or many years ago with smaller hash rate on the network and lower difficulty.

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Quote from: pakhitheboss on August 04, 2024, 08:09:48 AM

Quote from: hosseinimr93 on August 04, 2024, 07:44:11 AM

The article you shared doesn't say anything about why blocks can take more than 10 minutes to be mined.

Quoting from the article

Quote

The network difficulty, already constantly increasing, has further increased significantly, making the creation of new blocks more expensive and complex.

BTW, it meant more advance infrastructure is required now to mine Bitcoin.

That doesn't explain why bitcoin blocks may take more than 10 minutes to be mined.
The article truly says that it's now more difficult to mine bitcoin than it was years ago, but your conclusion is wrong. Blocks being mined more difficult doesn't mean they take more than 10 minutes to be mined.

First of all note that the increase in difficulty is due to the increase in the total hash power and with increase in the total hash power, the average block time should decrease (not increase).
Second, we have difficulty adjustment every 2016 blocks to maintain the average block time of 10 minutes.

It's possible that a block is mined in less than a few seconds and it's also possible that a block takes more than an hour to be mined, but the average block time is always (approximately) 10 minutes.

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Great question on how Bitcoin's price affects miners. Thinking less miners as the price declines is a common error, particularly in cases of a halving when rewards are half-cut. But folks, its not that straightforward. Historically, even with lower prices, the hashrate can actually go up.

Miners are clever. Tough times change with the seasons. They identify ways to save money, use less energy, or even update to new machinery. Therefore, even if some less effective miners may quit, the stronger ones carry on mining and typically result in an even higher hash rate overall.

This tells us something really important about Bitcoin and blockchain: its built to last. Its meant to get through difficult circumstances and emerge even more robust on the other side. That is the kind of system we need, folks; one that can flourish and adjust regardless of what the market presents.

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Quote from: hosseinimr93 on August 04, 2024, 07:44:11 AM

Now, it's almost impossible to mine bitcoin solo, but it's not that small miners are out of the business. Small miners can join mining pools.

It is a known fact arguing at this point does not make any difference as it is known Bitcoin mining is not that easy as it used to be 4 years back for small miners.

Quote from: hosseinimr93 on August 04, 2024, 07:44:11 AM

The article you shared doesn't say anything about why blocks can take more than 10 minutes to be mined.

Quoting from the article

Quote

The network difficulty, already constantly increasing, has further increased significantly, making the creation of new blocks more expensive and complex.

BTW, it meant more advance infrastructure is required now to mine Bitcoin.

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Quote from: dzungmobile on August 04, 2024, 07:48:43 AM

Block times can be longer than 10 minutes or shorter than 10 minutes, depends on network hash rate and blockchain difficulty.

This is not accurate and it may be a little confusing for a newbie that is not much familiar with how blocks are mined.

The block time can always be more or less than 10 minutes, regardless of whether the network hash rate has increased or decreased.
If the total network hash rate increases, the average block time would be less than 10 minutes until the difficulty is adjusted, but we can still have many blocks mined in less than 10 minutes and even in few seconds.

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Quote from: deepskydiver on August 04, 2024, 05:40:55 AM

Just wondering if anyone has noticed a trend of longer block times when the price drops. I presume some proportion of miners become unprofitable. And that of those - some might need to convert to fiat in the short term to cover costs and so pause mining.

Miners will continue their operations as long as they can still make a profit. But if the situation worsens, any person who is in business would give, knowing they were losing.

Upon seeing the current situation, I don't think it was enough for them to stop. These miners have been in business for many years and have already adjusted to the volatile situation of the market. It is already in their minds that not always the price is high; sometimes it drops, which causes some profit decline. And I already know what the best thing to do is—not to give up.

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Quote from: crwth on August 04, 2024, 05:57:10 AM

I see this as a problem within users only, but it's a different story for miners. They have invested a lot of money in buying a lot of mining rigs to mine, and I don't think they would stop just because the price drops. With that in mind, the miners have gone through so many cycles within the market and are not bothered with the natural cycle.

But not all miners will be profitable or all will survive, miners will also compete and be eliminated like investors. Bitcoin mining is a business, so it will also be affected by many different factors, and some people will profit but others will also lose. So I think bitcoin price decline and prolongation is sometimes one of the reasons why some miners give up.

Perhaps for organizations and mining companies, the decrease in bitcoin price is probably not a big problem for them because they have abundant budgets and capital resources as well as better plans. But for small organizations or individual mining farms, they will face more difficulties if the price of BTC falls seriously over the long term.

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Quote from: deepskydiver on August 04, 2024, 05:40:55 AM

Just wondering if anyone has noticed a trend of longer block times when the price drops. I presume some proportion of miners become unprofitable. And that of those - some might need to convert to fiat in the short term to cover costs and so pause mining.

Block times can be longer than 10 minutes or shorter than 10 minutes, depends on network hash rate and blockchain difficulty. With same blockchain difficulty, if network hash rate drops, block times will increase and if with same blockchain difficulty, you have bigger network hashrate, block times will become shorter.

Price drops can or can not be enough to force Bitcoin miners to leave Mining industry. There tough time when market crashes and stays in low price range for a long time, that cause significant temporary losses on weak bitcoin miners. They will have to leave, turn off their ASICs or even sale off their ASICs too.

You can see times when Bitcoin miner capitulation happens in the past.
https://www.bitcoinmagazinepro.com/charts/hash-ribbons/

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Quote from: pakhitheboss on August 04, 2024, 07:36:13 AM

Bitcoin mining is no longer a business that a sole miner can pursue and with the last halving, it is becoming difficult for small miners too. Only big companies are into Bitcoin mining which is a shame as it was never meant to be controlled by those who have money or you can say the corporates.

Now, it's almost impossible to mine bitcoin solo, but it's not that small miners are out of the business. Small miners can join mining pools.

Quote from: pakhitheboss on August 04, 2024, 07:36:13 AM

While 10 minutes it should take for the miners to mine a new block sometimes it goes beyond that time which I agree but that does not affect the price of Bitcoin. If you want to know the reason why there is a delay in mining the blocks currently then you should go ahead and read this, Bitcoin: Network Difficulty Reaches an Unprecedented level.

The article you shared doesn't say anything about why blocks can take more than 10 minutes to be mined.

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Quote from: deepskydiver on August 04, 2024, 05:40:55 AM

Just wondering if anyone has noticed a trend of longer block times when the price drops. I presume some proportion of miners become unprofitable. And that of those - some might need to convert to fiat in the short term to cover costs and so pause mining.

Bitcoin mining is no longer a business that a sole miner can pursue and with the last halving, it is becoming difficult for small miners too. Only big companies are into Bitcoin mining which is a shame as it was never meant to be controlled by those who have money or you can say the corporates. While 10 minutes it should take for the miners to mine a new block sometimes it goes beyond that time which I agree but that does not affect the price of Bitcoin. If you want to know the reason why there is a delay in mining the blocks currently then you should go ahead and read this, Bitcoin: Network Difficulty Reaches an Unprecedented level.

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Quote from: deepskydiver on August 04, 2024, 05:40:55 AM

Just wondering if anyone has noticed a trend of longer block times when the price drops. -snip-

Can you provide data or research that can back up this claim?
Anyways, that sounds plausible and even charts suggests that there may be truth behind your guess.

Let's use charts;
Based from bitinfocharts's charts, the peaks and bottoms of the average block time (since you've used this as basis in your post) doesn't look tied to the average price:

The above doesn't tell anything since you shouldn't be using the block time because it's affected by luck and "retarget" that changes the difficulty in every 2016 blocks.
You should compare it with the networks "total hashrate" that roughly tells how many miners are active instead:

Based from the charts above, both peak roughly at the same points, bottoms, not that much.
If you want to conduct more research, you should use more data than those charts, but it's a start.

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I see this as a problem within users only, but it's a different story for miners. They have invested a lot of money in buying a lot of mining rigs to mine, and I don't think they would stop just because the price drops. With that in mind, the miners have gone through so many cycles within the market and are not bothered with the natural cycle.

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Quote from: Mia Chloe on August 04, 2024, 05:43:43 AM

No miners don't drop when price drops. What happens is that miners try to wait a little longer before confirming them hoping that others trying to initiate a transaction will tend to increase their fees so that their transactions will be confirmed faster instead of waiting in the MEMPOOL.

No.
Miners are always competing with each other. So, they don't wait and they always try to mine more blocks. If mining is not profitable for miners, they would stop mining, not that they would wait some time just to increase the fee.

Bitcoin price has decreased by more than 10% in the last week. Did the fees increase? No. Miners are now confirming transactions paying around 3 sat/vbyte as fee.

_act_

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When the price drop after halving, it is possible that some miners may not let their mining machine to be working because the price of bitcoin halve which is it divided into 2 as the mining reward, also the price of bitcoin that decrease. This will discourage many miners to continue mining. But if that the price of bitcoin is increasing, this will encourage miners. Despite this is what that can happens in life, there are some exceptional time like 2022 when bitcoin price significantly reduced continuously but bitcoin mining hash rate increased continuously at the time.

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So fees increase to preserve rough profitability?

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No miners don't drop when price drops. What happens is that miners try to wait a little longer before confirming transactions with the simple logic that others trying to initiate or broadcast a transaction will tend to increase their fees so that their transactions will be confirmed faster instead of waiting in the MEMPOOL , in addition to them competing for transactions with higher fees . this is the reason why nodes have a minimal purge fee. Mining requires a lot of hash rate especially if you are going to be confirming transactions. The hash power in turn also invites high electricity costs and for miners to be in profit, they would prefer higher fees.

Infact it's important to know that the hash power required to confirm transactions is quite high therefore solo miners rarely confirm transactions rather they depend on Proof of work rewards for finding valid hashes.

If miners increase and decrease when fee drops then during halving when fees were high there would have been a drastic increase in number of miners.

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Just wondering if anyone has noticed a trend of longer block times when the price drops. I presume some proportion of miners become unprofitable. And that of those - some might need to convert to fiat in the short term to cover costs and so pause mining.

Topic: Does the number of miners reduce when the price drops? (Read 329 times)