In my understanding, if some miners give up due to price drop, there'll be more market for other miners to sell their coins and also the lack of supply will produce a price raise too. It stabilizes itself somewhat.
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Mining is still profitable for most (with low electricity rates), need to keep in mind that many do mining just for fun.
Mining profitability has diferent range from home-miners than farm-miners. There is a big difference between farms price of electricity and home electricity.
for miners they can take profit even below $100 per btc right no, just do the math
they run S5 in every farm already, and i can say that at least 20% or more is Ss7, but for the sake of putting us in the bad position we take into account s5 only
with a 0.05 in electricity(standard for every big farm) and 600w per S5, you have a mere consumption of $20 per month and a profit of 84 per month
a normal 1% farm have 3-4 tera which is 3463 S5, every single S5 is delivering a profit of around 60(84-20), so even if we fall to 100(1/3 of current price) you have still a profit of $7 per month(84/3-20), which is very bad yes but it's not negative
this with the s5, with the s7 the efficiency is greater(350(earning)-43(consumption) = 307 of net profit per month) so even with 1/3 of the value there is still $74 in profit(350/3-43) per month
they run S5 in every farm already, and i can say that at least 20% or more is Ss7, but for the sake of putting us in the bad position we take into account s5 only
with a 0.05 in electricity(standard for every big farm) and 600w per S5, you have a mere consumption of $20 per month and a profit of 84 per month
a normal 1% farm have 3-4 tera which is 3463 S5, every single S5 is delivering a profit of around 60(84-20), so even if we fall to 100(1/3 of current price) you have still a profit of $7 per month(84/3-20), which is very bad yes but it's not negative
this with the s5, with the s7 the efficiency is greater(350(earning)-43(consumption) = 307 of net profit per month) so even with 1/3 of the value there is still $74 in profit(350/3-43) per month
Hmm, this is very interesting. I have always thought that $120-$150 is the limit for most of the miners but now you are saying that this is even under $100.
I guess that mining is still very, very profitable business!
Not to mention many major farms are in VERY CHEAP electric places, and a lot of them run hardware not available to the home miner (Bitfury gear, KnC, SP50 Spondoolies, etc) some of which is probably more efficient than the S7.
The price will never go to zero (i hope).
If the price gets really low, people will start losing money (because their electricity price is higher than the profit) and shut down their mining farm.
When farms start to close, the hashrate will drop, and the difficulty will soon follow
When the difficulty drops, the people that kept on mining will find more blocks with the same hashrate
When they find more blocks, they'll have more coins to sell at the lower price
In the end, there will be an equilibrium... When the price drops significantly, i would expect the total hashrate to drop, and the amount of coins mined by the people that keep on mining will rise.
Nobody can predict the equilibrium, since it depends on: the hardware, the electricity price, the amount of people that mine for fun instead of profit,...
If the price gets really low, people will start losing money (because their electricity price is higher than the profit) and shut down their mining farm.
When farms start to close, the hashrate will drop, and the difficulty will soon follow
When the difficulty drops, the people that kept on mining will find more blocks with the same hashrate
When they find more blocks, they'll have more coins to sell at the lower price
In the end, there will be an equilibrium... When the price drops significantly, i would expect the total hashrate to drop, and the amount of coins mined by the people that keep on mining will rise.
Nobody can predict the equilibrium, since it depends on: the hardware, the electricity price, the amount of people that mine for fun instead of profit,...
for miners they can take profit even below $100 per btc right now, just do the math
they run S5 in every farm already, and i can say that at least 20% or more is S7, but for the sake of putting us in the bad position we take into account s5 only
with a 0.05 in electricity(standard for every big farm) and 600w per S5, you have a mere consumption of $20 per month and a profit of 84 per month
a normal 1% farm have 3-4 tera which is 3463 S5, every single S5 is delivering a profit of around 60(84-20), so even if we fall to 100(1/3 of current price) you have still a profit of $7 per month(84/3-20), which is very bad yes but it's not negative
this with the s5, with the s7 the efficiency is greater(350(earning)-43(consumption) = 307 of net profit per month) so even with 1/3 of the value there is still $74 in profit(350/3-43) per month
they run S5 in every farm already, and i can say that at least 20% or more is S7, but for the sake of putting us in the bad position we take into account s5 only
with a 0.05 in electricity(standard for every big farm) and 600w per S5, you have a mere consumption of $20 per month and a profit of 84 per month
a normal 1% farm have 3-4 tera which is 3463 S5, every single S5 is delivering a profit of around 60(84-20), so even if we fall to 100(1/3 of current price) you have still a profit of $7 per month(84/3-20), which is very bad yes but it's not negative
this with the s5, with the s7 the efficiency is greater(350(earning)-43(consumption) = 307 of net profit per month) so even with 1/3 of the value there is still $74 in profit(350/3-43) per month
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