network terahash goes up, but not the price of btc

cloudytoday

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Quote from: kalleguld on October 04, 2012, 08:23:40 AM

Quote from: cloudytoday on October 04, 2012, 05:57:22 AM

If more mining rigs use FPGA and ASIC, then those miners will be able to sell for less. So there will be less resistance to a fall in price.

No, miners are always selling for as much as they can, they are not (that) stupid.

Yes, they will look for the highest price. But if the price drops (for other reason) ASIC miners will still be able to have profit. ASIC will not cause price drop, but will reduce resistance to price drop, until everyone has ASIC, difficulty is x500 higher, and mining costs are high again as today.

x500 from https://en.bitcoin.it/wiki/Mining_hardware_comparison - Mhash/J for GPU is about 2, for ASIC is 1000.

At current difficulty a GPU miner cannot profit if price falls below $5.50, but ASIC miner can profit at $0.02 (this is just electricity cost, ignores hardware cost). Look at http://bitcoinx.com/profit/index.php, with difficulty=3million, electricity $0.15/kwh, power 1500W with 1500GH/s for ASIC (eg BFL minirig SC) or 3GH/s for 4xGPU.

Good business plan would be - buy BFL ASIC minirig, sell coins at $5, force GPU miners to quit. From http://bitcoinx.com/profit/index.php you profit $40000 in 1 month - time to buy another BFL ASIC. But difficulty might reduce from GPU miners quitting, so maybe you profit even more. Or maybe you cause crash in bitcoin and lose everything :-)

Biggest problem: do BFL really have 1.5TH/J hardware for $30k?

kalleguld

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Quote from: cloudytoday on October 04, 2012, 05:57:22 AM

If more mining rigs use FPGA and ASIC, then those miners will be able to sell for less. So there will be less resistance to a fall in price.

No, miners are always selling for as much as they can, they are not (that) stupid.

BurtW

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Quote from: Gabi on October 04, 2012, 07:10:18 AM

Quote from: solareclipse64236 on October 03, 2012, 07:40:31 PM

why is this? shouldn't the increase in terahash bandwidth cause an increase in price of btc?

i mean it means that more people are fighting over blocks and its rewards

And how does that increase the price? Cheesy

Do people pay to see these guys fight for blocks?

Yes, there are more people fighting for the block. But why should i pay a block more? If a block is worth x$ then i'll pay x$, no matter how many people fight for it.

The World Bitcoin Mixed Martial Arts cage match on Pay-Per-View! Watch as miners fight for blocks of bitcoins!

Gabi

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Quote from: solareclipse64236 on October 03, 2012, 07:40:31 PM

why is this? shouldn't the increase in terahash bandwidth cause an increase in price of btc?

i mean it means that more people are fighting over blocks and its rewards

And how does that increase the price? Cheesy

Do people pay to see these guys fight for blocks?

Yes, there are more people fighting for the block. But why should i pay a block more? If a block is worth x$ then i'll pay x$, no matter how many people fight for it.

BurtW

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Quote from: lassdas on October 03, 2012, 11:31:59 PM

Quote from: SAC on October 03, 2012, 10:50:53 PM

We have had almost three difficulty increases in this last month, the hash rate has increased.

Did you even take the time to look at the hashrate-chart?
It has been everywhere between ~19TH/s and ~24TH/s within the last 30days, right now where at ~20TH/s, so where exactly has it increased?

Are you really trying to argue over the fact that the difficulty is going up (meaning = the average hash rate is going up by definition)? See the actual data in this post: https://bitcointalksearch.org/topic/m.1243847 It is just silly to argue over facts, because, well, they are facts.

cloudytoday

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If more mining rigs use FPGA and ASIC, then those miners will be able to sell for less. So there will be less resistance to a fall in price.

kalleguld

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The price of Bitcoin, like all prices, are determined by supply and demand.

Mining doesn't increase supply (since there will always be 50BTC / ~10min).
And it doesn't increase demand, since miners don't want to buy BTC.

So mining does not affect the price of BTC.

kwoody

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Balls. That is all.

yrtrnc

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Ive seen a steady price increase lately!! Although will it be able to keep up with the difficulty the Asics will cause. I dont know.

SAC

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Quote from: lassdas on October 03, 2012, 11:31:59 PM

Quote from: SAC on October 03, 2012, 10:50:53 PM

We have had almost three difficulty increases in this last month, the hash rate has increased.

Did you even take the time to look at the [urlhttp://blockchain.info/charts/hash-rate?timespan=30days]hashrate-chart[/url]?
It has been everywhere between ~19GH/s and ~24GH/s within the last 30days, right now where at ~20GH/s, so where exactly has it increased?

Don't have too just yesterday it went from the high 2m to just over 3m an increase, the diff change before that was an 8-10% increase same as the one before it, it has been doing similar increases for the last few months. The last three diff changes all increases as the ones before them were.

http://blockchain.info/block-index/311130/00000000000003a5e28bef30ad31f1f9be706e91ae9dda54179a95c9f9cd9ad0
http://blockchain.info/block-index/311129/000000000000041fb61665c8a31b8b5c3ae8fe81903ea81530c979d5094e6f9d

http://blockchain.info/block-index/297251/000000000000002e00a243fe9aa49c78f573091d17372c2ae0ae5e0f24f55b52
http://blockchain.info/block-index/297250/0000000000000304760bf583f4ac241c5ffe77312fa213634eba252c720530f1

http://blockchain.info/block-index/277923/00000000000003f64d7662362aba91a5bdccbdbf6574fb42ddca28f1f0ec11fe
http://blockchain.info/block-index/277922/000000000000067080669115c445f378f3dec19787558d0e03263b9dec5d7720

lassdas

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Quote from: SAC on October 03, 2012, 10:50:53 PM

We have had almost three difficulty increases in this last month, the hash rate has increased.

Did you even take the time to look at the hashrate-chart?
It has been everywhere between ~19TH/s and ~24TH/s within the last 30days, right now where at ~20TH/s, so where exactly has it increased?

FbBitcoinLottery

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the price is going up... just slowly, but itll probably pick up when we get closer to the split...

BurtW

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Scroll down to the charts at the bottom of the page at this link and look at the various charts.

http://bitcoinx.com/charts

So now you do not need to guess at what is happening. You can just look at what is happening.

SAC

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Quote from: lassdas on October 03, 2012, 10:34:29 PM

Quote

network terahash goes up, but not the price of btc

What i'm wondering is, what timeframe are you looking at?

When i look at the charts i only see the opposite,
that the price of btc went up about 20% within the last month,
but the network hashrate didn't change at all.

We have had almost three difficulty increases in this last month, the hash rate has increased.

gmaxwell

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Quote from: BurtW on October 03, 2012, 10:45:47 PM

Price of BTC goes up -> More people mine -> Network hashrate goes up
Price of BTC goes down -> Miners take a break, give up, go back to playing games, etc. -> Network hashrate goes down

Yep. Moreover, the price has already gone up. GPU mining is loopy profitable again... rate is still catching back up, no doubt tempered by expectations of incoming asics.

BurtW

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Price of BTC goes up -> More people mine -> Network hashrate goes up

Price of BTC goes down -> Miners take a break, give up, go back to playing games, etc. -> Network hashrate goes down

lassdas

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Quote

network terahash goes up, but not the price of btc

What i'm wondering is, what timeframe are you looking at?

When i look at the charts i only see the opposite,
that the price of btc went up about 20% within the last month,
but the network hashrate didn't change at all.

kwoody

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Bitcoin's value only goes up when people buy them. People buy them when they're needed to pay for goods and services. Goods and services that can ONLY be paid for with Bitcoins are therefore the best way to increase the value of Bitcoins. Bitcoin jumped in value by approximately 3000% when the world discovered Silk Road. When merchants are willing to take Bitcoin over fiat, that's when Bitcoin wins, and rises in value. Hashrate has nothing to do with goods and services available to public and private markets, with the exception of companies who sell mining equipment. If anything, ASICs will drive prices down temporarily since the production of Bitcoins will be inflated while blockchain difficulty compensates for the increase hashrate. People with Bitcoins who DON'T mine are the ones driving the value up, and many of them will be completely unaware of the upcoming block reward being cut in half. If you want Bitcoin value to rise, merchants need to accept Bitcoin only, and deny customers who can only pay with fiat. This is much easier said than done, as most merchants who accept only Bitcoin are typically dealing in illegal goods and services and wish to do business in a clandestine fashion.

SAC

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Quote from: odolvlobo on October 03, 2012, 09:48:03 PM

Quote from: solareclipse64236 on October 03, 2012, 07:40:31 PM

why is this? shouldn't the increase in terahash bandwidth cause an increase in price of btc?

i mean it means that more people are fighting over blocks and its rewards

That 50 (soon to be 25) BTC reward is a small piece of the bitcoin economy. Most people using and trading BTC are not fighting over the block reward.

Anyway, your premise is wrong. The price of BTC is rising. It was 1/3 of the current price less than 1 year ago.

And 15 months ago it was just about 3x the current price or if going back to last December just about 1/6, if you are choosing arbitrary point in time to try and look like you are making a relevant point at least pick the one that looks the best. Oh and to the OP as the difficulty has increased this summer the price has risen as well from $5 at the start to just about $13 now. More than making up for the increase in the difficulty.

odolvlobo

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Quote from: solareclipse64236 on October 03, 2012, 07:40:31 PM

why is this? shouldn't the increase in terahash bandwidth cause an increase in price of btc?

i mean it means that more people are fighting over blocks and its rewards

That 50 (soon to be 25) BTC reward is a small piece of the bitcoin economy. Most people using and trading BTC are not fighting over the block reward.

Anyway, your premise is wrong. The price of BTC is rising. It was 1/3 of the current price less than 1 year ago.

Topic: network terahash goes up, but not the price of btc (Read 1987 times)