Holliday/traderCJ : I think your disagreement is coming from what your assumption of 'baseline' is. CJ is operating on a 'present market supply of BTC and USD' as his baseline so an activity which doesn't add or subtract from the market is neutral to him. Holliday seems to me assuming a baseline of 'all coins' liquidated or on the market somehow, so hoarding anything is a reduction of available coins from that baseline.
Thing is that the history of BTC has ALWAYS been one in which most coins are hoarded very quickly. The distinction were talking about is if they miners are the chief hoarders or if they are just operating a narrow margin business that supplies coins to a market from which hoarders make purchases. In the GPU era I think the former kind of miner was dominant, the barrier to entry was low, the ongoing power cost was the primary expense and the miner liquidated his mining output immediately to lock in profits. Now you have big barriers to entry and infrastructure dominates so the miner today is more likely to be a self-hoarder or at the least to be in a much longer-term repayment horizon so they hold coins longer because deflationary gain is necessary to make the mining process profitable.
This is a much more tenuous basis for a market then the old GPU era, that market badly overbought equipment and the new dynamic is even MORE conducive to over-investment, without the Chinese bubble starting in November we would already be deep into a collapse in which miners would be seeing no ability to ever break even on their machines. China pushed back that data a few months but it would take a never ending bubble to hold it off indefinitely.
Thing is that the history of BTC has ALWAYS been one in which most coins are hoarded very quickly. The distinction were talking about is if they miners are the chief hoarders or if they are just operating a narrow margin business that supplies coins to a market from which hoarders make purchases. In the GPU era I think the former kind of miner was dominant, the barrier to entry was low, the ongoing power cost was the primary expense and the miner liquidated his mining output immediately to lock in profits. Now you have big barriers to entry and infrastructure dominates so the miner today is more likely to be a self-hoarder or at the least to be in a much longer-term repayment horizon so they hold coins longer because deflationary gain is necessary to make the mining process profitable.
This is a much more tenuous basis for a market then the old GPU era, that market badly overbought equipment and the new dynamic is even MORE conducive to over-investment, without the Chinese bubble starting in November we would already be deep into a collapse in which miners would be seeing no ability to ever break even on their machines. China pushed back that data a few months but it would take a never ending bubble to hold it off indefinitely.
Thanks Impaler, good info. I am warming up to your line of thinking on Bitcoin.
