Topic: Next Halving in 2016 Mining consequences ? (Read 5563 times)

The block subsidy halving is not going to be any kind of surprise. People who are considering to buy an additional (or first) miner are gong to take the upcoming reduced block subsidy into consideration.

I would think we will start to see the consequences of the lower block reward early this year (2015) as many miners will not expect to ROI for at least a year under good conditions

In the beginning : the mining was only for support the network , but now it is only a question of money. I really would like to see what will happen before~after the next halving ( at the end of 2016).

no no, price needs to drop.  If the price rises more big investors will see it as profitable to set up large mining operations with high end equipment that will just push the at-home mining further out of the picture.

Now if the price dropped to $150 today we'd see a few PHs worth of machines shut down tomorrow.  Then the difficulty would drop and someone with 2 antminer S1s in their closet will finally have a reason to turn them back on

I guesss thats one big advantage bitcoin has to it . Can't be printed in excess and there is always a count to it.
There aren't any fake coins as well.

however, what is more likely to happen:

a) small miners switch off their euipment, hashrate and difficulty down

b) miners sell their gear to consortiums who can still make money based on economies of scale

Or price to rise.

When you have a lot of GHS it is always great to see the difficulty going down

it would be beautiful to see the global harshrate plummet and difficulty along with it.

I expect the "reward halving" to have a significant, negative impact on large mining operations. Another way to phrase this is "income halving" (in terms of bitcoins). Virtually everything that goes into a mining operation is priced in fiat (USD for me). That means electricity, hardware, staff salaries, cooling and so forth. Unless bitcoin doubles in value, a large operation will likely lose half it's "income", and have zero reduction in it's cost of operation. Show that to any large industrial operation (e.g. auto manufacturer), and they will all say it's time to do something drastic (e.g. close plants, lay off folks, etc).

I don't see how a large bitcoin mining operation can avoid this, unless they start to "wind down" in some way prior to "reward halving".

I'd trust the dollar if new ones were printed at a predictable and measured rate, too. They aren't though, and that's the reason why Bitcoin is a better store of value over a longer period of time, regardless of how bad it has been over the last year.

well its going to be more difficult to mine them so I would have to think its going to go up.

Well, technically I think it was Congress in 1933 and then Nixon in '71.... Either way, bitcoin is much better.  I think mining is what led to bitcoin being a success and gaining greater popularity. However, the great ASIC race kind of ruined things too :|

It is hard to tell you how much profit you can get but you will have some answers here at current difficulty : https://bitcoinwisdom.com/bitcoin/difficulty

100GHS earns 0.00008922/week 0.0003824/month - maintenance costs

Any idea on hpow much do the miners bear for the cost of mining 1 bitcoin?

and approximately how much profit they make on an average?

Yes the same amount of bitcoins is created : 3600BTC/day right now wether you have 1 miner or billions of miners. If the price is low and there are many miners, the maintenance costs are higher in BTC terms.

I don't think that you understand how bitcoin works in general. Bitcoin emission is a mathematical algorithm; it does not matter if there are 10 or 10000 or 1000000 miners (greed or no greed). The same amount of bitcoin is issued regardless (at the current block size=25 BTC right now) every ten minutes no matter what as long as there is a functional network.

Yes it is what I meant, bullish means the price will go up

That's exactly what he meant by "bullish".

Bear market Vs Bull market:

http://www.investopedia.com/ask/answers/129.asp

How is it bullish? Wouldn't it be rather good, as the price would go up, as less sellers would be there?

those seems random number to be honest

personally i think there will be a pump long before the havling then a price correction, aka dump, but we will get a better value compared to the current one

Miners will have half less bitcoins to sell on the markets but the same maintenance costs which is bullish for the price.

i believe that point 2 would happen.
after the reward halving some more people need to buy bitcoin, that increases the demand. (assuming that they need bitcoin!)
because it would be less profitable for the most to run a miner efficient.

Very, very difficult to predict, but this is a very reasonable guess.

No,i get it the miners are the ones who make the bitcoin or I should use the term "generate".

Just like how the federal reserve prints their currency.
It was awesome in the beginning and everything but now people are just milking the system out of greed.
And it shows,look at bitcoin as it stays low 300s like a B list pornstar. This is terrible.

I don't think that you understand what miners are doing-they are basically transaction validators.
Without mining there is NO BITCOIN.

i just want to say that all the miners are ruining bitcoin just like how the federal reserve ruined the dollar.

Good summary. The next halving in 2016 is definitely bullish for the price but the effect will be integrated in advance to the price

There will be no noticeable difference immediately after, as it will already have been priced in.

It will ease up the sell pressure so that might help the prices. But 2016 is a long time off and much bigger factors in play would have acted to change the price in an unpredictable manner by then.

No answer is good because the price will be pushed higher by the next halving but the market will anticipate it way before it happens, it even anticipates it now

I used to think this way as well, in fact, I think a lot of us did, but the evidence shows that the difficulty before, during, and after the halving stayed about the same (on a grander scale) for at least two months. Only after ASICs starting coming out in late February did the price and difficulty significantly change.

Check the chart if you don't believe it:

Price increase would almost certainly be a result of it. But that factor can't be accounted for now, as its still almost 2 years to go .
And we don't know what the price at that particular time be.

I would expect any bitcoin price increase due to the halving to be small, and to occur before the halving based on people expecting the increase.

There are about 3,600 bitcoins mined and possible sold each day. I am not convinced a fall from 3,600 to 1,800 bitcoins will be significant in terms of the total number of bitcoins transacted each day.  Currently it would represent less than 10% of all daily bitcoin transactions.  

By 2016 the volume of bitcoins moved each day will be higher than it is today and sales of freshly mined coins may be a smaller part of all transactions.  

In summary I am not certain that a fall in 2016 from selling 3,600 to 1,800 mined bitcoins per day is going to make much of a long term difference to the bitcoin price.  By 2016 bitcoin could be transacting a million bitcoins per day.

The fundamental question is - what actually sets the value/price of bitcoins?

Bitcoin price will definitely increase. Currently around 3-4K is dumped daily by miners.
Once the number goes down, dump will decrease, hence price will be expected to increase.

I believe it will be scenario 1).  Everyone knows the change to mining revenue is coming so it is something people can include in planning.

BTC prices may rise slightly before the halving and fall afterwards, as been mentioned by others.  I would be surprised if there was a massive change in bitcoin price.

It is also worth remembering that by 2016 almost all mining will be done in large mining farms in areas with cheap electricity.  These people plan ahead and will plan for the revenue change.

But mining will be greatly affected.  

1) The value of the mining industry will halve overnight.  Suddenly there is half the revenue.   So mining farms will keep marginally profitable miners running up to the halving date and then turn them off.  

2) Difficulty will fall as uneconomic miners, and mining farms, are turned off.  In theory difficulty will fall to half the value before the halving.

3) Sales of new miners will collapse in 2016. People will want to see how the new mining world stabilizes.  In particular people will want to see how fast miners turn of older miners, and the effect on difficulty.  Some mining farms may even run at a loss for a period in the hope that others go under first.  Those left standing after the shakeout will get the spoils.  In the second half of 2016 there may be a glut of cheap uneconomic second hand miners.

How did you come up with those % figures?

The other scenario re price is that since everyone will expect it to go up, there will be a lot of buying pressure shortly before the halving. Therefore, the price may actually go up before, and drop after the halving.

That means its more advanced for everyone, end result less bitcoin being produced.

The mining technology will advance exponentially by 2016 and the halving will be a non event, IMHO

The thing with cloud mining is that it just passes the buck and you're not guaranteed a profit any more than if you bought your own hardware; you (and mostly the manufacturers/hosters) are just saving on shipping, support, etc.  Cloud mining in and of itself barely does anything for profitability, except for those manufacturers/hosters where each contract adds up.

The Gen4 chips are slated for 'soon' or mid-2015.  While that's great for that period, imagine the market gets saturated with those more efficient miners.. it's just back to the current situation, where there's certainly smaller miners already calling it quits.  Halving come mid-2016 isn't going to help that any.  It would have to be offset by even more efficient miners, higher exchange rate, what have you.
And thus it's back to crystal ball gazing and discussions that have been had many times before.  All I know for certain is that it'll be a completely different landscape from the last halving; whether that's for better or worse is something for future history books

Hah - Libreoffice; I didn't even bother saving the file.  However, sources are:
1. Block 210000 at blockchain.info to get the timestamp of when that block occurred.
2. Bitcoin Price Index at coindesk.com, just because it's a bit of an average across exchanges and they have a decent CSV export you can work with.
3. Bitcoin Hash Rate at blockchain.info, again because of CSV export.
The graph was then generated using a simple X/Y plot chart.

That time we experienced ASIC boom. This time it'll be the rise of Gen4 chips and hosted mining aka cloud mining.

ohh

The halving will have, approximately, the following 3 effects:

1. The Bitcoin price will go up by 26%
2. The difficulty will go down by 20%
3. The revenue per hash will go down by 20% (something which miners need to consider in the decisions they are doing now).

Of course, all 3 can also be affected by factors unrelated to the halving.

grait!

2, only half as much miners dump their bitcoin now, so I expect bitcoin to rise a lot at least 50-100%.

Thanks Steve.  Where did that graph come from?

It's hard to say what the halving brings. It's honestly probably priced in for the most part, but a few months after the last halving we had the first ASICs, so people sometimes associate the halving with increased price. In reality, the price had mostly stabilized around $12 at that time after having risen to $15 in August and falling some from there.

That halving back in 2012 was the only one so far - and plotting it against price and hash rate doesn't really show it having any impact;

The hash rate increase may have sagged a little bit, but wasn't entire out of tone.

The next halving will be in a completely different playing field.

That's what I remember, along with a good amount of hysteria.  I was trying to find a timeline with the past halving and price.

'The last time' was back in November, 2012 - well before the ASIC boom, and still during a rise in mining popularity.

This discussion's been had numerous times.  I don't think anything has changed in the landscape that would change the course of the more recent of those discussions - maybe revisit if/when during the next year and a half there's cause to think different.

yes, sorry, my english is not perfect
what happened last time?

consequences

Probably the same thing that happened last time.

What do you think will happen in 2016 when the next halving is going to happen ?

1. Bitcoin will keep almost same price, and miners will just get half the BTC.

2. Even tho we will mine half bitcoins, bitcoin price will explode just because it's harder to mine.

Which one you belive is more probable to happen ?