This is offer and demand,is there is high offer and low demand,the price goes down, and that is what's happening,besides the manipulation of the market
AKA free market, which bitcoin always will trade in since it's a decentralized coin. It all depends on demand and supply, if the miners stop mining new coins the supply would be lowered and ergo the demand would rise. 
Topic: Is BTC price sustainable with mining & electricity costs leaving the ecosystem? - page 2. (Read 1636 times)
April 28, 2015, 03:31:28 PM
April 28, 2015, 03:29:57 PM
You have to remember that it is a temporary situation, once the block reward is halved a couple of times more mining should find a more natural very low cost equilibrium between security and low voluntary TX fees.
April 28, 2015, 03:29:33 PM
I think that mining doesn't affect the bitcoin price so much. It's all about adaption and trading volume that would cause a single bitcoin to be $10k as you say.
April 28, 2015, 03:29:21 PM
This is offer and demand,is there is high offer and low demand,the price goes down, and that is what's happening,besides the manipulation of the market
April 28, 2015, 03:25:15 PM
for leaving the bitcoin ecosystem, you mean that they are dumped for fiat?
wouldn't the miners in this case pay the bills with bitcoin directly? it would be certainly possible when bitcoin will reach 10k and become mainstream as a result
wouldn't the miners in this case pay the bills with bitcoin directly? it would be certainly possible when bitcoin will reach 10k and become mainstream as a result
April 28, 2015, 02:41:48 PM
P.S. This is a honest and serious question and not intended to spread FUD or anything. I just am trying to wrap my wits around this concept and understand if it's workable.
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Is bitcoin price sustainable with mining & electricity costs continually leaving the Bitcoin ecosystem?
I am a firm believer that some day a single bitcoin will be worth over $10,000.
But I can't wrap my wits around the math when it comes to the cost of electricity required to sustain a larger and larger market cap. I say this because the total cost of mining typically grows until it is close to the value of the coins being mined (because it is profitable to do so until they balance out. This is a form of arbitrage).
Some math:
At today's prices of roughly $230 USD per bitcoin, 3600 bitcoins per day are valued at about $828,000 USD. That means it is roughly that much mining/electricity cost per day to mine bitcoins and to secure the network.
To sustain a $230 USD price of bitcoin it will cost $302 Million per year in electricity & mining costs.
To sustain a $1000 USD price of bitcoin it will cost $1.3 Billion per year in electricity & mining costs.
To sustain a $10,000 USD price of bitcoin it will cost $13.1 Billion per year in electricity & mining costs.
The thing that has me concerned is all that money is continually leaving the bitcoin ecosystem!
How can this work with that much money leaving the system constantly?
update: Someone pointed me to this PDF file which seems to ask a similar question: http://www.academia.edu/7666373/An_Order-of-Magnitude_Estimate_of_the_Relative_Sustainability_of_the_Bitcoin_Network_-_3rd_Edition
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Is bitcoin price sustainable with mining & electricity costs continually leaving the Bitcoin ecosystem?
I am a firm believer that some day a single bitcoin will be worth over $10,000.
But I can't wrap my wits around the math when it comes to the cost of electricity required to sustain a larger and larger market cap. I say this because the total cost of mining typically grows until it is close to the value of the coins being mined (because it is profitable to do so until they balance out. This is a form of arbitrage).
Some math:
At today's prices of roughly $230 USD per bitcoin, 3600 bitcoins per day are valued at about $828,000 USD. That means it is roughly that much mining/electricity cost per day to mine bitcoins and to secure the network.
To sustain a $230 USD price of bitcoin it will cost $302 Million per year in electricity & mining costs.
To sustain a $1000 USD price of bitcoin it will cost $1.3 Billion per year in electricity & mining costs.
To sustain a $10,000 USD price of bitcoin it will cost $13.1 Billion per year in electricity & mining costs.
The thing that has me concerned is all that money is continually leaving the bitcoin ecosystem!
How can this work with that much money leaving the system constantly?
update: Someone pointed me to this PDF file which seems to ask a similar question: http://www.academia.edu/7666373/An_Order-of-Magnitude_Estimate_of_the_Relative_Sustainability_of_the_Bitcoin_Network_-_3rd_Edition
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