Topic: Miners are killing bitcoin - page 2. (Read 10131 times)
We all know that every bitcoin will be mined there is no stopping that. But if bitcoin catches on world wide an is truly excepted by all. Then that means that there will be less coins than people in the world that want them. This could cause price inflations or discretions. It will ultimately become just like all other currency's in the the world.
If you took half the miners out and the other half generate twice the bitcoin per hash then that would mean they did it much more cheaply so they wouldn't have to sell as much bitcoin to pay the bills and the market would stablize.
miners will start "mining" Altcoin 
Miners are in control of whether it is profitable to mine bitcoin. Take half the mining machinery offline, and the other half will generate twice as much bitcoin per hash. It's that simple.
The speculators are also in control of whether it is profitable to buy bitcoin. If they offer twice as much money for the same amount of bitcoin, then the miners will miss out on their share of the additional money until they double the cost of production by spending twice as much money on hashing.
The extent that Bitcoin has value as a currency or for being actually useful is one thing; but right now the seller side of the market is dominated by the price of production and the buyer side is dominated by speculation.
And the price of producing a bitcoin can be no higher (or the miners are losing money) and no lower (because then the miners aren't making money) than the speculators are willing to pay the miners to produce it.
We shall see a departure from this model only if and when Bitcoin has actual value for its usefulness as a means of exchange or storage of value.
Cryddit
The speculators are also in control of whether it is profitable to buy bitcoin. If they offer twice as much money for the same amount of bitcoin, then the miners will miss out on their share of the additional money until they double the cost of production by spending twice as much money on hashing.
The extent that Bitcoin has value as a currency or for being actually useful is one thing; but right now the seller side of the market is dominated by the price of production and the buyer side is dominated by speculation.
And the price of producing a bitcoin can be no higher (or the miners are losing money) and no lower (because then the miners aren't making money) than the speculators are willing to pay the miners to produce it.
We shall see a departure from this model only if and when Bitcoin has actual value for its usefulness as a means of exchange or storage of value.
Cryddit
Bitcoin is in a downward spiral like any commodity crash....miners have to pay their debts by selling bitcoin....as bitcoin goes down it takes more bitcoin to satisfy their debtors so they sell more bitcoin reinforcing the loop. Once the weak miners are washed out of the system and there is a supply shortage the price will go up...rinse and repeat.
P.P.S. To all 51%-attack-phobists, even if 90% of miners drop out, this attack is still very improbable.
I would think so, since if just regular mining at 49% of network is more profitable than any odd few tx you can forge/double spend at 51%, and it's not worth mining, then due to low unit value, then basically it's just trying to be even more inefficent than mining.
The only time it makes any twisted sort of sense, in that it doesn't just have you burning a million an hour in electricity for nothing, is when price is leading the difficulty by some huge amount, but in that situation, mining gear is probably at such a huge premium that your opportunity cost in not just selling the stuff has an accountant somewhere turning purple.
Price falling because Supply > Demand.
The real question is WHY Supply > Demand.
It's unlikely for Demand to drop drastically in short period of time.
Therefore, the main suspect is Supply.
What could be a reason for Supply to increase drastically?
GenTarkin's hypothesis of miners needing to sell more coins to cover costs is plausible, but unlikely.
Miners are not stupid to shoot themselves in the foot by over-saturating the market.
More likely is that somebody is dumping a great number coins (possibly in distress).
P.S. Also, some large miners quitting is a good thing for me - they quit, I get more coins.
I don't care what they worth in fiat right now, I hold them for a long run.
P.P.S. To all 51%-attack-phobists, even if 90% of miners drop out, this attack is still very improbable.
The real question is WHY Supply > Demand.
It's unlikely for Demand to drop drastically in short period of time.
Therefore, the main suspect is Supply.
What could be a reason for Supply to increase drastically?
GenTarkin's hypothesis of miners needing to sell more coins to cover costs is plausible, but unlikely.
Miners are not stupid to shoot themselves in the foot by over-saturating the market.
More likely is that somebody is dumping a great number coins (possibly in distress).
P.S. Also, some large miners quitting is a good thing for me - they quit, I get more coins.
I don't care what they worth in fiat right now, I hold them for a long run.
P.P.S. To all 51%-attack-phobists, even if 90% of miners drop out, this attack is still very improbable.
Merchant adoption might not cause falling prices, but increased adoption could cause long term holders to use their existing stockpiles of BTC for purchases. I know I've made a couple purchases at Newegg using BTC since they've introduced it, whereas I wouldn't have sold BTC before to pay with fiat. I don't think that would cause anything like the current downturn though.
I'm not even sure there needs to be a reason for it. People have been skittish for awhile now, if people are worried about a long-term downtrend it wouldn't take much of a movement to send everyone to the exit before the bottom falls out.
I would agree with this. However the long term effect will be a net positive for bitcoin. We will see long term holders start to sell their bitcoin which will cause pressure on the price, however it will also cause the distribution of bitcoin to be much more even which will cause more confidence to be put into bitcoin because there will be less fear that few people will control the markekI'm not even sure there needs to be a reason for it. People have been skittish for awhile now, if people are worried about a long-term downtrend it wouldn't take much of a movement to send everyone to the exit before the bottom falls out.
I think over the long term the miners will likely sell the majority, if not all the coins they mine for fiat in order to pay for their electric costs. This will probably also cause the price of ASICs to drop dramatically. It has been speculated in many threads that over the long term the difficulty will track both the price of bitcoin and the price of electricity
The price has always fluctuated. Just returning to normal til the next take off.
No miners no bitcoin 
No bitcoin no miners. We kill bitcoin and problem solved. 
No miners no bitcoin
I dont know if this has been mentioned in the thread yet, but regarding the topic....
Its true to a point. Miners nowadays are being forced to cash out a much larger portion of btc mined than theyve ever had to historically.
While the rate of coins mined stays roughly unchanged. The simple fact that theres MW's upon MW's of power that the large farms have to pay every month, means they have to cash out a shitload of coins, they get dumped on the exchange and forces price even lower.
Obviously this is outpacing demand substantially, otherwise the market would just buy it all right back up. This also causes an avalanching effect as the price gets lower and lower, because the miners have to cash out more and more coins.
Back in the 2011 days, miners werent forced to cash out such a large portion due to electricity costs, sure there were farms here n there that did have to do it ... but because there were so many garage miners / hobbyist miners that participated, most of us just hoarded the coins.
The mining landscape is vastly different now ...
But that doesnt change the fact that demand is substantially lacking in BTC at the moment, this is the true reason for its price decline. Another china like bubble hasnt come along yet from a different country, in fact the china bubble may be its last 'holy shit this part of the world has just found out bout btc...' type bubble ever to happen. Whats needed from here on out is a solid merchant acceptance foundation(which it has grown substantially since the years previous), consumer demand(which is nearly flatlined) OR... a major country's currency to go belly up and citizens flock into safe havens, like precious metals / bitcoin .. etc..(which is only a matter of time).
As bitcoin continues to go down, miners n farms will shutdown, diff will drop drastically ... which opens up Bitcoin to its Achilles Heal - being 51% attacked. Thats probably what scares me the most at this point. If people just start 51% it at will... 'The experiment' will have failed.
What pisses me off further is the devs just have ignored the 51% problem, relying on peoples good hearts at a few points in Bitcoins past and now its price fallout and possible subsequent 51% exploitations happening all the time... will be the ultimate example of irresponsibility destroying something potentially revolutionary.
Its true to a point. Miners nowadays are being forced to cash out a much larger portion of btc mined than theyve ever had to historically.
While the rate of coins mined stays roughly unchanged. The simple fact that theres MW's upon MW's of power that the large farms have to pay every month, means they have to cash out a shitload of coins, they get dumped on the exchange and forces price even lower.
Obviously this is outpacing demand substantially, otherwise the market would just buy it all right back up. This also causes an avalanching effect as the price gets lower and lower, because the miners have to cash out more and more coins.
Back in the 2011 days, miners werent forced to cash out such a large portion due to electricity costs, sure there were farms here n there that did have to do it ... but because there were so many garage miners / hobbyist miners that participated, most of us just hoarded the coins.
The mining landscape is vastly different now ...
But that doesnt change the fact that demand is substantially lacking in BTC at the moment, this is the true reason for its price decline. Another china like bubble hasnt come along yet from a different country, in fact the china bubble may be its last 'holy shit this part of the world has just found out bout btc...' type bubble ever to happen. Whats needed from here on out is a solid merchant acceptance foundation(which it has grown substantially since the years previous), consumer demand(which is nearly flatlined) OR... a major country's currency to go belly up and citizens flock into safe havens, like precious metals / bitcoin .. etc..(which is only a matter of time).
As bitcoin continues to go down, miners n farms will shutdown, diff will drop drastically ... which opens up Bitcoin to its Achilles Heal - being 51% attacked. Thats probably what scares me the most at this point. If people just start 51% it at will... 'The experiment' will have failed.
What pisses me off further is the devs just have ignored the 51% problem, relying on peoples good hearts at a few points in Bitcoins past and now its price fallout and possible subsequent 51% exploitations happening all the time... will be the ultimate example of irresponsibility destroying something potentially revolutionary.
Merchant adoption might not cause falling prices, but increased adoption could cause long term holders to use their existing stockpiles of BTC for purchases. I know I've made a couple purchases at Newegg using BTC since they've introduced it, whereas I wouldn't have sold BTC before to pay with fiat. I don't think that would cause anything like the current downturn though.
I'm not even sure there needs to be a reason for it. People have been skittish for awhile now, if people are worried about a long-term downtrend it wouldn't take much of a movement to send everyone to the exit before the bottom falls out.
Well i dont have a ton of BTC so im not worried and I trust the technology long term.I'm not even sure there needs to be a reason for it. People have been skittish for awhile now, if people are worried about a long-term downtrend it wouldn't take much of a movement to send everyone to the exit before the bottom falls out.
But 99% of lucky early adopters must be shitting their pants as we speak, specially if they didn't sold at the 1K milestone. All of these are potential sellers now.
Merchant adoption might not cause falling prices, but increased adoption could cause long term holders to use their existing stockpiles of BTC for purchases. I know I've made a couple purchases at Newegg using BTC since they've introduced it, whereas I wouldn't have sold BTC before to pay with fiat. I don't think that would cause anything like the current downturn though.
I'm not even sure there needs to be a reason for it. People have been skittish for awhile now, if people are worried about a long-term downtrend it wouldn't take much of a movement to send everyone to the exit before the bottom falls out.
I'm not even sure there needs to be a reason for it. People have been skittish for awhile now, if people are worried about a long-term downtrend it wouldn't take much of a movement to send everyone to the exit before the bottom falls out.
Payment Proccessors dont sell their coins on the major exchanges, they sell them OTC
Well, BitPay sells a lot through exchanges like Bitstamp and Kraken:
http://www.walletexplorer.com/wallet/BitPay.com
2015-01-12 21:21:37 -500. Kraken.com
2015-01-12 21:12:22 -500. unidentified wallet [44eaace4eb]
2015-01-07 19:14:24 -900. Unidentified wallet [00a5eacf79]
2015-01-06 03:18:47 -300. Kraken.com
2015-01-06 03:18:47 -1000. Unidentified wallet [44eaace4eb]
2015-01-05 16:21:19 -500. Unidentified wallet [44eaace4eb]
2015-01-05 16:21:19 -200. Kraken.com
If you keep scrolling those pages you will see similar payments to Bitstamp (before the hack).
I haven't looked into the Coinbase wallet (available at the same site).
Quote
where they could sell at a premium relative to the market price! Have you guys ever seen the listings for high-volume buyers? They would buy thousands at a time and not even flinch.
That [44eaace4eb] wallet may be some private whale, but may also be some part of an exchange's input wallet that the site has not yet identified as such.
If the OTC market price was higher than the exchanges, then why would they sell at the exchanges at all?
For lots of 500 and 1000 BTC, the OTC price cannot be much different than the open market price, since a broker could easily buy or sell that amount in the exchanges and make a lot of money from arbitrage in the OTC market.
Now they're crashing the TSX, bastards....
http://www.ctvnews.ca/business/miners-help-push-tsx-down-as-world-bank-revises-global-growth-1.2187648
http://www.ctvnews.ca/business/miners-help-push-tsx-down-as-world-bank-revises-global-growth-1.2187648
First, miners, now merchant adoption? At this rate, every little action we take is gonna kill bitcoin.
How many times does it need to be restated that (Merchant Adoption != Falling Prices), Payment Proccessors dont sell their coins on the major exchanges, they sell them OTC where they could sell at a premium relative to the market price! Have you guys ever seen the listings for high-volume buyers? They would buy thousands at a time and not even flinch.
How many times does it need to be restated that (Merchant Adoption != Falling Prices), Payment Proccessors dont sell their coins on the major exchanges, they sell them OTC where they could sell at a premium relative to the market price! Have you guys ever seen the listings for high-volume buyers? They would buy thousands at a time and not even flinch.
as any bubble, Bitcoin is goin down. it's something normal.
Bitcoin is on since 5-6 years ago. Only 1 MIL users worldwide including China. This is a fact.
There are no newcomers and that's why the price is falling. It will fall much more when the big exchangers will start selling their Bitcoin.
The other reason: I guess maybe the future crashes BTC, because whales can make money from dump and short. They don't need make money from going up.
Bitcoin is on since 5-6 years ago. Only 1 MIL users worldwide including China. This is a fact.
There are no newcomers and that's why the price is falling. It will fall much more when the big exchangers will start selling their Bitcoin.
The other reason: I guess maybe the future crashes BTC, because whales can make money from dump and short. They don't need make money from going up.
as any bubble, Bitcoin is goin down. it's something normal.
Bitcoin is on since 5-6 years ago. Only 1 MIL users worldwide including China. This is a fact.
There are no newcomers and that's why the price is falling. It will fall much more when the big exchangers will start selling their Bitcoin.
Bitcoin is on since 5-6 years ago. Only 1 MIL users worldwide including China. This is a fact.
There are no newcomers and that's why the price is falling. It will fall much more when the big exchangers will start selling their Bitcoin.
Merchants themselves could give a damn about bitcoin in its premise...as all they do is cash out to fiat and dump it on the market the second they receive payment.
They don't do that, actually. When they sell a 100$ item 'paid with bitcoin', they just get 100 dollars in their bank account. That is why it is so easy to convince them to 'accept bitcoin'. It is the payment processor's job to handle the bitcoin and convert it to dollars.
Bitpay and Coinbase must have been running into huge losses with the recent price drops: they must accept bitcoins as if they were worth the current market price, but can only sell them hours later on Bitstamp.
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