I expect a large group of individual miners to stop mining and leave that entirely to large farms. That, in turn, will decrease the amount of disposible Bitcoin in the hands of people that frequent retailers instead of just selling mined coin to cover expenses like farms do. More selling to exchanges than spending or buying will decrease the price. It's always been expected that fees will replace the reward as it drops so the system is self correcting. I don't think that's really how it's going to work. Transaction fees can't be pushed up fast enough.
That is a really interesting take on the situation. I had just assumed that it would drive the the price up.
I thought that most individuals had already stopped mining? Don't the farms and pools pretty much run the show now, at least for bitcoin? I think that there will still be mid sized farms, and the new equipment coming out soonish will further decrease the ability of the average person to get into mining. Assuming it is more expensive then the last generation. Even if it does drive everything to large farms, it is only speeding up the inevitable.
If you look at current hashrate distribution at least 50% of the mining is still performed by small to medium sized pools. These pools are comprised of individual miners "pooling" their mining power to find blocks and split the reward. The individuals need to be rewarded with a large enough share of the found blocks to make continued mining financially desirable.
Bitcoin is designed to be a balanced system where difficulty, reward and fees self adjust to keep everything in equilibrium. In other words, as miners stop mining because it's no longer profitable for them the difficulty drops and increases the profit for the remaining miners, this in turn increases profitability which causes more people to mine. The same is true for the designed reward drop. Bitcoin gets at least some of it value from scarcity as there are only ever supposed to be 21 million of them. The design planned to reward early adopters to an untried risky system with a large reward for continued mining. As the system grows it's believed that less reward will be necessary to keep the system going. As the reward drops it was believed that fees would organically increase to stabilize the profitability of continued mining until eventually only fees are paying for the cost of mining.
I don't happen to believe this system will work as advertised for a multitude of reasons. Most of those reasons are outside the control of the original design team because human behavior is difficult to calculate with a slide rule. In theory it sounds perfect; however, theory and reality seldom meld into a perfect union.
