that big mining farms,companies had just punished themselves..
more mining--->more sell pressure on btc---->>more difficulty--->more electricity cost----->no Return of Invest----> and shut down with negative profit
bitcoin ecosystem is punishing greedy mining farm companies..
Agree. I think home miners who are marginally profitable should hang on to their equipment. If you are paying $0.22 for power, then maybe not so much. If you believe in BTC long term, then lower prices are good short term.
The fact that hash rate is no longer increasing even though we know at least some brand new equipment is coming on line means we start to understand the economics of the older mining farms. Some of them can no longer pay the bills at BTC less than $400. By pay the bills I meet are cash poor or choose not to operate equipment at a loss. So some of the 2013 equipment is getting turned off. At a power plus marginal operating cost of $0.12 GHS, a 2W/GHS miner is no longer profitable. If you saw my post about Chinese power prices, they are all over the map.
If anybody knows when the power cost of hashing dropped below 2W/GHS, please share it with the group.
IMHO, this means that at least some large mining operations have to regularly sell their BTC to keep the lights on. Mine and hold is not an option to them. As discussed in other posts - this becomes a death spiral until miners start shutting down-thus stabilizing the drop in BTC price. I see at least two possible dynamics:
1. A farm is still at break even on the fixed costs with newer equipment. It is just the older equipment operating at a loss on marginal operating costs. This means the marginal cost of operating the older equipment is just the power (and a bit of labor). That equipment can be turned back on if difficulty drops or BTC price increases.
2. A farm does not have enough of the right type of hashing power to cover fixed and marginal costs and are shutting down either voluntarily, by the power company or by their landlords. These farms are much less likely to come back up if operating profitability of BTC mining improves.
In either event, as I have mentioned many times, the current economics makes investment in a new generation of ASICS highly problematic for the mining companies. I do have an MBA to go with my Physics degree. The business case would not pass muster here in the US. If I am right, then we may see a fairly steep drop in the rate of difficulty increase as long as BTC price stays low.
Further, there is nothing to put upward pressure on BTC prices because industrial miners now dominate production. They have to sell.
As the OP said
bitcoin ecosystem is punishing greedy mining farm companies. Delicious.