Is halving a big damage to mining pools?

Oasisman

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Quote from: STT on May 20, 2020, 04:41:20 PM

Bitcoin has got to the size where the pools are corporate entities who have annual accounts and taxes and expenses. The halvening will have some effect but its also alongside energy costs falling and other bonuses and challenges we are seeing currently. The main concern is the ongoing demand for BTC usage, fees have risen ever since the halvening so despite the block reward going down people are paying more and its possible the pools are doing quite fine.
Year to year I think they are ok so long as BTC is rising in its usage and population and thats the real question for everyone on the network I think.

The lesser the miners generate new Bitcoin into circulation, the higher the demand, because of low supply production, that explains why there's such a huge increase of Bitcoin price months after the halving.
So, I guess you're right mining pools would be fine, because they're not only earning the block rewards but also the transaction fees, which I also guess the Bitcoin adaption will increase in number as time passes by.

STT

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Bitcoin has got to the size where the pools are corporate entities who have annual accounts and taxes and expenses. The halvening will have some effect but its also alongside energy costs falling and other bonuses and challenges we are seeing currently. The main concern is the ongoing demand for BTC usage, fees have risen ever since the halvening so despite the block reward going down people are paying more and its possible the pools are doing quite fine.
Year to year I think they are ok so long as BTC is rising in its usage and population and thats the real question for everyone on the network I think.

KTChampions

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Quote from: beerlover on May 20, 2020, 03:09:41 PM

Probably he referred the miners by using the term "mining pool".

Unlike you mentioned, price increase will not happen immediately following the halving. That is where the point, OP is referring. Until, prices turn profitable, definitely miners will suffer which may lead to less number of miners in a mining pool; and probably OP is mentioning that situation as a damage Grin

.

The time gap between halving and BTC prices to become profitable for miners must be a struggling period for both miners and common bitcoiners. Yes, we are the people who suffer because of 100x more tx fees than usual. People who make 1 or 2 transaction per month may not suffer but the others. So, halvings do damage not only the miners but also the frequent BTC transactor. The only consoling thing is, expectation of higher value for BTC in near future as past halving have done that so why not this time as well

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If this period is long enough, then new models of miners will have time to capture the market and miners who own old equipment will not have a chance to return to the market even if the price of bitcoin increases. Surely for them it is a big blow. But for the ecosystem, I think this is good - since energy efficiency increases when disconnecting miners with old equipment.

beerlover

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Quote from: BitMaxz on May 13, 2020, 07:03:33 PM

After the block-halving, the supply will reduce which will lead to the price increase, and demand will increase due to attractive prices increased with the help of low supply.

I don't see that it will cause some damage to the mining pools after block-halving but I think only miners who will suffer due to halved rewards they get and due to operational cost.

Probably he referred the miners by using the term "mining pool".

Unlike you mentioned, price increase will not happen immediately following the halving. That is where the point, OP is referring. Until, prices turn profitable, definitely miners will suffer which may lead to less number of miners in a mining pool; and probably OP is mentioning that situation as a damage Grin

.

The time gap between halving and BTC prices to become profitable for miners must be a struggling period for both miners and common bitcoiners. Yes, we are the people who suffer because of 100x more tx fees than usual. People who make 1 or 2 transaction per month may not suffer but the others. So, halvings do damage not only the miners but also the frequent BTC transactor. The only consoling thing is, expectation of higher value for BTC in near future as past halving have done that so why not this time as well

.

Bezobraznike

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Quote from: Smitty Werben Man Jensen on May 15, 2020, 06:16:50 AM

Halving did make the Bitcoin rewards from mining to 6.25 BTC, but I'm sure the miners won't complain, the price of Bitcoin is still reasonable, the miners still accept it because they haven't lost profits, if they have been mining Bitcoin since 2010 there's nothing to worry about it, if they have Bitcoin reserves to repay losses if necessary

Some will not complain, some will have to stop with Bitcoin mining and start mining some other coin.
Profitability is important, and every miner have some ideas and plans.
It's not the first halving, experienced miners are prepared for this event! They had 4 years to prepare
for this and many of them did that!

pooya87

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Quote from: buwaytress on May 16, 2020, 03:35:20 AM

There was really no such concern that I recall in 2016,

then you are forgetful Wink

there was 10 times more drama circling the previous halving in 2016 than there was this year. there was even a big scale FUD campaign with the keyword downward spiral where they tried convincing everyone that as soon as reward goes from 25 to 12.5 a large number of miners leave and from there price falls and hashrate falls alongside until bitcoin dies within months from halving.
today we know what happened in a couple of months after halving! hashrate also started rising shortly after halving...

buwaytress

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Quote from: STT on May 15, 2020, 12:46:14 PM

Its a change or tightening to the protocol, I wouldnt worry especially about this event because the difficulty is constantly being raised on the miners. Im not sure if I completely agree with that idea because lower difficulty could lower the block times to 5 minutes instead of 10 but this is what has been decided. Higher diff is constantly causing hardware to become redundant and I dont view the block reward changing as much different, the price of BTC itself must justify all work done also.
All these factors will inter relate and effect each other and its been going on a while now, many doubted it would work yet somehow it has thus far.

Actually, it's funny that people are actually worrying about halving. There was really no such concern that I recall in 2016, and doesn't seem like there's much online to suggest people were worried in 2012 either, but I guess this one was hyped so much to the point that people are now wondering if capitulation really is about to happen.

Halving's supposed to be a good thing, and 6.25 btc, or even 3.125 or 1.5625, for that matter, is still a crapload of rewards for the next 12 years. Plenty of time to not worry =p

Findingnemo

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Miners may choose to stop operating due to lesser rewards but who are doing mining in the large scale won't stop it and I believe they already hold enough bitcoins to survive the near future expenses, once they survive that the prices will hit too hard in this year or in next by that time they will be getting huge rewards in USD based calculation.

whyrqa

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Undoubtedly, today there are a lot of nuances that are debating that put miners and other Bitcoin users at a disadvantage after halving. but it should also be noted that reducing the level of remuneration for mining Bitcoin reduces the level of inflation. thus increasing the deficit of Bitcoin, puts cryptocurrency in a better position, If you compare Bitcoin with the most famous fiat currencies, as well as gold metal.

bitgolden

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Maybe it would be bigger than what we imagine but I still think that pools are making money basically by just existing so they do kinda deserve to not make this much money anyway. However do not forget that pools are making money depending on what their miners are making, which means let's say you are a pool with 1000th and your miners mine certain amount, if tomorrow there is a 1000th more coming into your pool you will not be losing anything.

So, the result is pools should be trying to get as much people as they can to mine in their pool to make money. However when there is a result for the pools which doesn't even cost any money by just getting more people there is no result for the miners but to spend money and get more machines and mine more bitcoin to make the same profits.

STT

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Its a change or tightening to the protocol, I wouldnt worry especially about this event because the difficulty is constantly being raised on the miners. Im not sure if I completely agree with that idea because lower difficulty could lower the block times to 5 minutes instead of 10 but this is what has been decided. Higher diff is constantly causing hardware to become redundant and I dont view the block reward changing as much different, the price of BTC itself must justify all work done also.
All these factors will inter relate and effect each other and its been going on a while now, many doubted it would work yet somehow it has thus far.

DoublerHunter

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Quote from: Smitty Werben Man Jensen on May 15, 2020, 06:16:50 AM

Halving did make the Bitcoin rewards from mining to 6.25 BTC, but I'm sure the miners won't complain, the price of Bitcoin is still reasonable, the miners still accept it because they haven't lost profits, if they have been mining Bitcoin since 2010 there's nothing to worry about it, if they have Bitcoin reserves to repay losses if necessary

^ Because I believe in the Law of Supply and Demand and it is one factor that affects the price of anything in the market like more demands in bitcoin with lesser supply in bitcoin probably cause a pump on the price but if we will have a lesser demand and with a huge supply of bitcoins may dump the price. Halving will cause two things some miners may quit and rewards will be halved definitely these two will give us a lower supply of bitcoins and if the demand will still be the same or will be increased then we can expect a pump on bitcoin's price. Nevertheless, since halving causes a lower reward that can be mine we may expect a continuous increase in the price that may be slow but definitely it will since people around the globe also start to embrace the bitcoin and other cryptocurrencies.

Smitty Werben Man Jensen

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Halving did make the Bitcoin rewards from mining to 6.25 BTC, but I'm sure the miners won't complain, the price of Bitcoin is still reasonable, the miners still accept it because they haven't lost profits, if they have been mining Bitcoin since 2010 there's nothing to worry about it, if they have Bitcoin reserves to repay losses if necessary

crwth

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Just like what others discussed, it's not "mining pools," but the miners themselves are going to take the hit with less BTC rewards. IMO, it's us, the users who transact BTC who will get the hurting the most. As an individual, no, but the transactions as a whole. It's going to be more expensive if there are fewer miners around.

pooya87

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Quote from: BlackHatCoiner on May 13, 2020, 04:35:35 PM

Year 2020. In these days there are no people who mine blocks by themselves. As I can see only mining pools generate the new bitcoins.

mining pool is just a server that the individual miners meet each other to share the work. it is still miners who "generate new bitcoins".

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Do you think that this will be a reason that bitcoin price will increase?

no it won't. the fact that the "workers" earn less money will never ever affect the price. the only reason why price would go up or down is when the demand for bitcoin increases or decreases respectively.

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If the price had to be doubled on each halving then it would be a bubble again like back in 2017.

wrong. a bubble does not happen just because price has increased an arbitrary amount (like 2x). a bubble happens when the price goes higher than the intrinsic value.
so if you think $15k is not possible the only valid argument that you can make is about why you think bitcoin's intrinsic value is less than $15k and not more than it?

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You should note that there are other variable involved like mining difficulty, transaction fees and others. All this adjusts itself to make sure the system keeps running. As said above some miners might close down due to the reduced fee, some others could see it as an opportunity to set up. The effect of the halving would level out in a couple of months, and then we look forward to the next one and then the next one; till the total supply has been mined.

pixie85

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It was already explained above why pools will not take a hit.

Even if you don't mean mining pools but miners the situation is the same. They will not be damaged in any way because the market will adjust to the situation just like it did in the previous halvings. Bitcoin will not remain at 10 thousand for years because it would mean mining at marginal profitability. We should be at 12 thousand or more but right now there's not enough of those expensive post-halving coins on the market to change the price.

gentlemand

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Quote from: justdimin on May 14, 2020, 01:34:02 PM

Pools will make less amount of course

Not necessarily. Some pools give miners the block rewards but keep the transaction fees for themselves. They're likely to be doing considerably better at the moment than they were before. I can imagine they'll be slowly abandoned as fees become more important.

justdimin

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Pools will make less amount of course because the amount they are cutting from the miners are going to drop as well since the miners will not be making as much hence they won't be paying too much neither. However, let's not forget that all the big whale miners are making their own pools as well, they are so big that they are mining blocks themselves, so there is no "people are not mining all by themselves" or anything, bitmain for example is big enough to mine all by themselves.

So, some people still do mine all by themselves with all the power they have, which still doesn't change the fact that there will be some increase in price because they are not making as much money as they normally do so they will want to make the old amount by increasing the price or at least increase the fee.

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Quote from: BlackHatCoiner on May 13, 2020, 04:35:35 PM

Year 2020. In these days there are no people who mine blocks by themselves. As I can see only mining pools generate the new bitcoins. Therefore, halving their reward might be a little damaging... Do you think that this will be a reason that bitcoin price will increase? Due to the law of demand and supply?

I believe it will surely increase but not above 15000$. If the price had to be doubled on each halving then it would be a bubble again like back in 2017.

Now, your thoughts.

Bitcoin have proven itself, the bubble is over there's no need to consider Bitcoin as another bubble, there are so many prediction that Bitcoin can go 6 digits, experts are predicting that level, and the community are not treating this as a bubble, I expect the price to double but that doesn't mean that it's a bubble.

Jating

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Quote from: BlackHatCoiner on May 13, 2020, 04:35:35 PM

Year 2020. In these days there are no people who mine blocks by themselves. As I can see only mining pools generate the new bitcoins. Therefore, halving their reward might be a little damaging... Do you think that this will be a reason that bitcoin price will increase? Due to the law of demand and supply?

I believe it will surely increase but not above 15000$. If the price had to be doubled on each halving then it would be a bubble again like back in 2017.

Now, your thoughts.

It is going to be survival of the fittest here, if you have old rigs then definitely you are not going to survived at there will be no profits for you. However, I think those miners have prepared themselves for the worst. Heck they could have been preparing this for years ahead and slowly migrating their old hardware to the new one to be able to cope with the difficulty.

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Quote from: mu_enrico on May 14, 2020, 05:21:16 AM

Mining pools (per se) are just computer server that distribute the work to the miners. I think the miners will get the blow by reward reduction, not pools.
From this $10K BTC price currently, the situation is like $10K/2 = $5K pre halving. So if miners can't survive $5K pre halving, they will turn off their farms.

Pools are living off the fees, if they were getting 1% of the reward before the laving they were getting 0.125 now they are getting 0.062.
It's the same as credit card purchases if the shops get hit with a 50% drop in sales, so will the payment processor who is seeing less volume and less income.

So, basically pools will be hit just as hard as miners.

Febo

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Quote from: BlackHatCoiner on May 13, 2020, 04:35:35 PM

Is halving a big damage to mining pools?

Only thing to damage mining pools is if someone hack them and steal their bitcoins. But that is danger of any centralised Bitcoin service. They need to work on the security a lot.

davis196

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Quote from: gentlemand on May 14, 2020, 05:31:22 AM

Quote from: BlackHatCoiner on May 13, 2020, 04:35:35 PM

As I can see only mining pools generate the new bitcoins.

All pools are are administrators and distributors. Some may mine themselves. Others won't even have one laptop allocated to mining. And if a mining pool goes down or looks like it's trying to screw Bitcoin or the miners who are using it then it'll be abandoned en masse and be forgotten.

Miners are service providers to users. Pools are service providers to miners.

That's right and I think that we should stop with the BTC halving discussion.There's nothing new that we could add to the discussion and asking such "Will the halving damage the BTC miners?" or "Will the halving damage the mining pools?" questions is pointless,because nobody can give a clear answer now.The Bitcoin halving is behind us and we will see the impact of the halving over miners and mining pools in the next few months.
By the way,this thread doesn't belong to the Speculation forum,since we don't discuss the BTC price.

gentlemand

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Quote from: BlackHatCoiner on May 13, 2020, 04:35:35 PM

As I can see only mining pools generate the new bitcoins.

All pools are are administrators and distributors. Some may mine themselves. Others won't even have one laptop allocated to mining. And if a mining pool goes down or looks like it's trying to screw Bitcoin or the miners who are using it then it'll be abandoned en masse and be forgotten.

Miners are service providers to users. Pools are service providers to miners.

mu_enrico

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Mining pools (per se) are just computer server that distribute the work to the miners. I think the miners will get the blow by reward reduction, not pools.
From this $10K BTC price currently, the situation is like $10K/2 = $5K pre halving. So if miners can't survive $5K pre halving, they will turn off their farms.

ultrloa

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For sure it has a damage since for rising up the difficulty provably the small time miner will get affected to it since it could lower down their profit and running their operations will not good since they might not gonna earn with it and I wonder on what will happen in future if all the miners will close down and hopefully this scenario will not happen towards this industry.

Darker45

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There might be some shrinking of the mining pools because of miners quitting due to the reduced reward. But this is no reason for the price to increase. This may have nothing to do with the law of supply and demand. The increase in price is primarily driven by the demand increasing while the supply decreasing. And that has nothing to do with mining pools.

$15,000 is possible. $20,000 is possible. Even $50,000 is possible. Everything is just a matter of time. There is nothing that says the price will double in each halving. That depends purely on demand.

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If there are entities to be affected, they are small mining pools and small miners who don't have enough financial funds to keep mining with temp negative profits in a few months. Big mining pools and strong miners will survive and earn huge profits. I do believe it because price needs time to take off after the halving. Bitcoin has rise more than two times since its latest bottom so I am sure it will take a few months to see bitcoin rising to higher range. Despite of some months of stuck around $10k, bitcoin will do take off to the range $13k later this year.

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I think halving will effect to mining pool because Block reward is down a half. But maybe the bitcoin's price will increase, so their profit will increase too, maybe there will balance.

BitMaxz

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What do you mean by damaging the pool?

Mining pools are just operators who hiring miners to mine blocks. The only thing will happen after block halving is they get halved rewards per block from 12.5 BTC to 6.25 BTC.

Since block halving is done we will see some miners will exit on the market and stop mining on the pool because they get fewer rewards compared to the past. Which I think will lead to a slow Bitcoin network during transactions and the pool operators will get less and less rewards.

After the block-halving, the supply will reduce which will lead to the price increase, and demand will increase due to attractive prices increased with the help of low supply.

I don't see that it will cause some damage to the mining pools after block-halving but I think only miners who will suffer due to halved rewards they get and due to operational cost.

BlackHatCoiner

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Year 2020. In these days there are no people who mine blocks by themselves. As I can see only mining pools generate the new bitcoins. Therefore, halving their reward might be a little damaging... Do you think that this will be a reason that bitcoin price will increase? Due to the law of demand and supply?

I believe it will surely increase but not above 15000$. If the price had to be doubled on each halving then it would be a bubble again like back in 2017.

Now, your thoughts.

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