Topic: if the number of transactions doesn't pick up by 8/16 miners will have to quit - page 2. (Read 4089 times)

Presumably it can switch to alt-coins, though.

touche !

I think only factor is electricity cost vs exchange rate.

Much less bitcoins will be coming in after the halving I assume, so the price will rise.

yawn.. we had these kind of arguments before the last halving.. and its not even 2016 yet so why worry about it 2 years beforehand..

this is like worrying about who is going to diaper change your baby, before you have even met a girl to impregnate. seriously enjoy the 'ride' and the many month of fun for now and youll se the future will sort it self out all by itself.

transaction fee's are now and in 2 years time small fry and shouldnt be the main 'wage earner' the idea of bitcoins is to be as cheap to transact as possible. so a transaction fee rise is out of the question.

but here are three options to settle your mind.
1) in 2016 the bitcoin price would naturally rise to an amount that will make the reward value per block, a value that miners can make a living out of.EG miners wont want to sell for less. so they will hoard and create more demand, raising the price.
2) some miners will realise instead of wasting $$$$ on electricity for EG: 0.25btc a day. they will start selling products and services at a retail price of 1BTC with a 25% markup. (giving them 0.25 profit) or selling 100  items for 0.01btc with 0.0025 profit (again totalling 0.25btc profit).. you get my point
3) those that cant afford to keep up with difficulty rises over the next 2 years. wil  die off, giving more of a share to those that stay. thus they get a bigger cut. thus they make more $$$$

there are many other options but, dont worry your lil head about it. its over 2 years away

It is unlikely to be a shock,  because it is a known event, that miners planning to operate a certain mining venture past that date,  can take into account today;  the bigger risk for miners today, is not the predictable halving, BUT  the difficult or impossible to predict rate of increase of the network hashrate and therefore hash difficulty ---  and the future exchange rate of Bitcoins.

Mining can be rendered unprofitable, for many potential miners - due to their equipment+electricity cost --- long before the halving.

If some miners shut down their rig:  the hash rate goes down, and mining becomes more profitable for other miners who continue their mining operation.

Also, just because a certain mining operation has been rendered unprofitable -- does not mean that it stops mining:   as long as  the  incremental operational expense of operating the mining rig for 1 day  does not exceed the  incremental value of the daily reward,  then  stopping the mining rig  creates an even bigger loss.  

It is rational for mining to continue  for those that already purchased equipment, as long as the average daily Watts of electricity, air conditioning, space, and maintenance cost consumed per  hash per second continue to be less than the dollar value of the fraction of a daily Bitcoin that can be mined per hash per second.

Otherwise....  if the daily dollar/fiat cost of operating the miner is greater than reward + ~1% exchange fee,  then it makes sense to shutdown the mining rig,   and ----  if the idea was to get bitcoins,  trade fiat for Bitcoin on a reputable exchange instead.


On the other hand,  future increase in exchange rate might eventually change formerly unprofitable mining to profitable,   if the Bitcoin reward was retained.


ALSO,  Just because it might be rational to shutdown the rig, does not mean miners will do so.   It is quite possible many miners continue to operate,  even after the reward is less than the electricity cost.

In other words:  miners speculating on future exchange rates,  and using  mining  over  buying  Bitcoins on an exchange,     as a preferred way of obtaining Bitcoins,  since mined coins may be kept more securely  and  anonymously,   than bitcoins purchased from an exchange,  that might have privacy protection issues or questionable security.....

In general, y'all sound pretty immature.  Ooh let's poke fun at the new guy and act intellectually superior cause we know a few more facts about bitcoin mining and we've been here on the forum a few months longer.  Grow up.  Unbelievable.

Yeah, mining will become unprofitable for YOU loser, not everybody.

err nevermind. I was gonna say something very cruel and I changed my mind!

Welcome to our community, noobcake!

+ Cost of space (in the future, this will probably become less and less negligible)

Ok.  Lets say that happens.  Difficulty between now and then goes up 50x and then it cut in half so the network is "only" 25x more secure than it is now?

Still even that is highly unlikely as for most miners the hardware is a sunk.  The min operating revenue is much lower.  Simply put at the block halving if price doesn't rise then it will kill NEW miner hardware and it may make it unprofitable to run miners in high energy areas but existing hardware is already a sunk cost and for those in low power cost areas there will be no reason to stop mining.

It doesn't matter whether mining is profitable or not.

There is a certain amount of SHA-256 ASIC mining gear in existence and this mining gear just can't magically "disappear".
If mining becomes unprofitable for some miners, then they will sell their hardware. This means that others will buy that very same hardware.
This doesn't change the hashrate at all. It only means that some part of the hashrate will change ownership.

The hashrate can't decrease unless people really start to throw their hardware into the recycle bin.
But no one with half a brain would do that while there are people who want to buy that hardware.

I know that the hashrate decreased once in the past, but that was only because there was still GPU mining at that time.
GPU mining has the serious flaw that mining gear can be used for something else than mining (e.g. gaming) which puts the network at risk of losing this hashrate again.

Luckily, GPU mining is over, so this can't happen anymore. The waste majority of produced ASICs will keep mining until the end of its lifetime.

Thanks for the prompt reply considering this was a strong argument before last years halving now we have seen what happens afterwards.

will always be profitable for someone...even if difficulty decreases (which is unlikely anytime soon)

ASIC manufactures will have to lower their price to compensate, mining will still be profitable

Since we can't reliably factor in the value of a Bitcoin in the future, there's no way to know whether mining will be profitable by the time of the next halving.

How many coins of any currency have you mined? I highly doubt that you're speaking from any kind of experience here.

I honestly don't think so.  Major cost is in rigs to begin with.  Even if some minors stop ...so what

the last time the reward was halved the transition went smooth because bitcoin's dollar value grew rapidly.
bitcoin is no longer a hobby of a small group of people, it cannot continue growing in value this fast forever.
it is very possible the dollar value will stay relatively stable when the 2016 halving occurs and so with no fast rise in dollar prices there will be no compensation for miner's lost revenue.
with the cost of operation vs mining revenue equilibrium broken there will be no choice for miners but to shut their rigs down until difficulty and hash rate fall enough for a new equilibrium to be reached.

 

There are many factors that decide mining profability.

Difficulty
Transaction reward (fees)
Block reward
Hashrate of your miner
Power consumption of your miner
Cost of power in your area
Bitcoin value

Once the block reward halves, some of the other factors will surely balance out.

Many people made the exact same predictions (based on dubious analysis) before the last time the block reward halved and it occured with a wimper not a bang.  Some miners became unprofitable and quit.  The lowered difficulty means the remaining miners saw their revenue rise.  The rising exchange rate resulting in a higher USD revenue for a lower amount of bitcoins.