What are miners doing with their profits? - page 3.

Yakamoto

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Quote from: RealBitcoin on March 02, 2016, 07:24:21 PM

Quote from: Yakamoto on March 02, 2016, 06:58:29 PM

In my opinion, I think a large majority of miners take their profits and treat them like how you and I would use money that we earn; exchange it, buy things, pay bills, etc.

Maybe a small amount of miners take their profits and then re-invest back into their operation, but if the money keeps on rolling in, I think they're happy with what they're mining.

So no miner has any savings in bitcoin that they HODL in your opinion? That sounds really unreal.

I can understand using BTC as money, but generally speaking bitcoin is technically a commodity, plus people already do save in money, especially bitcoin users who try to avoid fiat.

So with those assumptions I guess any miner has at least 10-15% of his profits saved.

I completely forgot to mention that actually.

I think that a year or two ago, before the halving was so close to occurring, there would be a lot more miners who would just take the straight exchange and then go do whatever with their funds. Now that we're bordering on the halving, I have a feeling miners are holding more than 10-15% of their profits and are waiting for the halving to roll around. I think some miners are holding upwards of 40% of their funds waiting for the halving, but I'm not a giant Chinese Bitcoin mine owner, so I am not entirely sure.

RealBitcoin

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Quote from: Yakamoto on March 02, 2016, 06:58:29 PM

In my opinion, I think a large majority of miners take their profits and treat them like how you and I would use money that we earn; exchange it, buy things, pay bills, etc.

Maybe a small amount of miners take their profits and then re-invest back into their operation, but if the money keeps on rolling in, I think they're happy with what they're mining.

So no miner has any savings in bitcoin that they HODL in your opinion? That sounds really unreal.

I can understand using BTC as money, but generally speaking bitcoin is technically a commodity, plus people already do save in money, especially bitcoin users who try to avoid fiat.

So with those assumptions I guess any miner has at least 10-15% of his profits saved.

Yakamoto

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In my opinion, I think a large majority of miners take their profits and treat them like how you and I would use money that we earn; exchange it, buy things, pay bills, etc.

Maybe a small amount of miners take their profits and then re-invest back into their operation, but if the money keeps on rolling in, I think they're happy with what they're mining.

Ferrero

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It all depends on their strategy and assumptions. If they strongly believe in mining, they would reinvest most of the profits. Otherwise, they would withdraw it and invest in other kind of assets.

RealBitcoin

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Quote from: pawel7777 on March 02, 2016, 05:32:53 PM

You could achieve exactly the same buy using your profits/salary to buy bitcoins and hold forever (or just burn them straight away) instead of trying to dictate what others should do with their profits.

Child down, i`m not dictating anything, where do you get this?

I`m just curious to know thats all, i am an hobby economist and always like to analyse these things

Quote from: Raimonn on March 02, 2016, 05:48:16 PM

I think that is not possible to know what they do with the fee profits. I don't see a big problem if they sell all their profits for dollars, other people will buy this bitcoins. On the other question, you say that some million dollars were spent on this attack, it could be that someone move it from one of its wallets to another of its wallets, this bitcoins weren't spent only moved.

Not just fee profits but the minting profit as well. There is a big problem if miners dump all their profits, because that means that they only exploit bitcoin, and if they have most of the power over bitcoin consensus, they will not represent our best interest.

But I dont think they dump it all.

On the other hand, the money came from outside if a large organization was behind it, they first bought bitcoins, and then used that bitcoin to spam.
The money trail could be traced back by exchanges, but thats another story.

DarkStar_

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They probably sell it for profit, and hold some bitcoin for the long term. Obviously they invested fiat for mining equipment, and they want to make fiat profit since it's accepted in more places then bitcoin right now. They would also hold a portion because if they mine they should know that the btc price might go up soon and they might sell it then for a bigger profit.

Can't say for sure though.

Raimonn

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I think that is not possible to know what they do with the fee profits. I don't see a big problem if they sell all their profits for dollars, other people will buy this bitcoins. On the other question, you say that some million dollars were spent on this attack, it could be that someone move it from one of its wallets to another of its wallets, this bitcoins weren't spent only moved.

pawel7777

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You could achieve exactly the same buy using your profits/salary to buy bitcoins and hold forever (or just burn them straight away) instead of trying to dictate what others should do with their profits.

RealBitcoin

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I have always wondered where the money go that miners get. Of course from the obvious expenses: server cost, rent, maintenance, electricity bills,etc... I`m more interested what miners do with their profits, not income.

I try to understand how beneficial miners are to the economy, of course aside from securing the network, I mean from a financial standpoint.

I would certainly not want to see miners dumping all their bitcoins on exchange for dollar or euro, that would be very bad for our bitcoin economy.

For example in this current spam attack, millions of dollars of bitcoins were spent by the attacker to slow down the network.

All that money goes to miners in forms of increased fees. But if the miners dump all that money for dollars then its a net loss for the entire network.

But if the miners just HODL all their profits, or at least the majority of them. Then essentially any attack against the bitcoin network, is just a free subsidy for the miners profits, and if they HODL all their profits, then it makes bitcoin more scarce and more valuable, essentially the attacker subsidizing the whole bitcoin economy ,and achieving the exact opposite what he intended to do.

So please answer my question as precise as possible, or if is there any way to know or calculate what the miners do with their profits, in aggregate.

Topic: What are miners doing with their profits? - page 3. (Read 3181 times)