Topic: What happens to the miners' reward coins? (Read 316 times)

The miners could just simply sell their coins peer to peer or just sell it to the exchanges. If they sell it peer to peer then they just need to make sure that the person they are dealing with is a payer otherwise their bitcoin is wasted. A meet up in peer to peer transactions is a good deal. To remove confusion the miner could just sell his coins to the exchanges but you are worrying if they sell it to the exchanges that the value will go down. It does not matter anyway anything could happen in the market and almost all of the miners are selling their coins to the exchanges without regard for the value going up or down, the most important part is that they can pay for their electricity and they are gaining profit.

Miner have to cover with operating cost have higher price than how much earn from mining, last for the mining know by public many people interested with mining have higher payment for every days, after bitcoin price dump and mining participant very much earning from mining look down and hard, now mining participants look little with less earning and enjoy for invest money in bitcoin or altcoin.

It also depends on the miners. The smaller ones likely join pools. And by small, I mean anyone who doesn't have more than 5% or 3% or 1% of the hash power.

They would mine in a pool, withdraw their coins, and possibly get as much as half to their favorite exchange. Until they can pay their electric bill directly in bitcoins, they will have to resort to payment gateways or processors or exchanges.

And basically, the reason why the cost is increasing is because the fees is so, let's take for example, bitcoin halving provides the blockchain a division of mining rewards from its current state, in this case, miners will receive less rewards from the transaction or work that they've done. In contradict to it, the halving should take's place only on cryptocurrency that has a potential market value increase. Through this, if there's less reward, its market value still is great.

I don’t think one service can really know the motives of their buyers, nor exchanges know what will the buyer do with the coins, but I’m pretty sure one can always look as to where would the coins end and from that we can draw a line.  As for the miners, most large firms are capable of storing coins for as long as they can knowing that they have the $$$, though if things get tough, pretty sure they are doing OTC trades to not really move the markets that much.

bitpay has released some data about growth in retail usage. more or less, their findings are that as price rises, people spend more value. they call it a "wealth effect pattern":


they processed more than $1 billion in payments in both 2017 and 2018, so retail usage definitely seems to be growing.

i guess you miss the fact that blockchain data is clear to see, you can easily see where coins go.
for instance. some pools move coins in large clusters. some make a transaction paying out to lots of little amounts.
its easy to spot differences where say slush pool is paying out to individual hobby miners their small amounts or paying a large player a single large amount
you can then follow the spends to see how long it takes and how many spends it takes to then end up in known exchange cold wallets

add to that when main pool owners do interviews they explain their business models and even laugh when people presume that large pool owners sell on exchanges and be held to the whims of such volatility.

yes the little hobby miners that only earn a few crumbs an hour are too small to even bother investigating, plus their crumbs dont have much impact to b of concern. but the bigger pools do actually talk alot about how sustainable their business models are.

some unrelated stuff i found funny when looking into pools handling of funds.. couple years back the propaganda machine was rampant. there were pools like slush pool who were very vocal about their love of segwit and then the propaganda machine saying btc.com was very much anti-segwit.. funny part is 2 years later and slushpool put their coin rewards on legacy (1) addresses and btc.com put them on segwit(bc1q) addresses
and on unrelated note i still see peter wuille who developed segwit still prefers to accept donations through a legacy address

all im saying is there is quite alot you can actually learn if people actually bother to investigate/research.
too many people still think bitcoin is anonymous and no info can be found about anything..

Operating cots very higher and result from mining very lower its why I am not back with mining now, last two years maybe we can get much profit with mining but now better you buy or invest your money in altcoin and bitcoin than you want to start mining project, every day you have pay mining operating from electric to your internet access and many service needed every week for you mining tool, you have much output for you mining tools.

Bitcoin is decentralized and that is why it is hard to gather statistics as to what purpose does the bitcoin buyers why do they buy bitcoins. Also there is no analysis reports, if bitcoin is decentralized who in their right mind will handle that task and who will pay them for doing so. Hence, it is impossible for us to know those things especially those peer to peer transactions. But if you are really interested then you can make some polls to have a rough data and statistics here in this forum, though the accuracy is far off from the real events but at least you can gather some data and have a better understanding about bitcoin transactions.

There's been plenty of talk of institutional types paying a premium for 'virgin' coins. If that's true then miners will be your one and only source. If I were a miner selling on an exchange I would consider that a failure on my part to hustle further. If there's any demand out there as a miner you have the most desirable supply.

of course the small pools made up of individuals syndicating their hashpower end up taking their slices ofcoin to exchanges,
but thats more about not having the volum/big enough slice of the pie to excite otc traders

but the larger pools that win more often because they are running industrial factory size farms, need to know before wasting electric that they can be sustainable. they cant plan buying new asics and upgrading and paying bills by relying on the whims of the open market.

hense why they preplan days,weeks,months ahead what their growth strategies are going to b and that only happens if they have buyers commiting to valuation contract and by not impacting the open market price which would then harm their 'value' which they privately quote, because if coins become cheaper to buy on an open market instead of otc. then they cant remain sustainable. so ofcourse they are not gonna shoot themselves in the foot for short term gain which would harm long term growth

That's interesting--I can tell you that I tried to buy bitcoin through an ATM a couple of weeks ago, but the damn thing kept crashing when I tried to scan my ID.  I just wanted to try the damn thing out and didn't want to buy a whole lot of bitcoin at the inflated price that the ATM was selling coins at.  I bet bitcoin ATMs get used a lot, because they're convenient but who knows.  I can't say that for sure.

I don't have any hard data on what miners do with their coins, but I would assume a lot of them have buyers in place off the exchanges--but my guess is that at least some coins get sold on exchanges as well, because it's easy to do, consistent, and they'll always get market prices.  Just because they might do that doesn't mean they'll suppress the price, though.  They don't have to sell everything all at once, for one thing.  For another, the bitcoin market is pretty liquid and can absorb those selling orders pretty easily, especially in good times.

OTC trades have been happening for years. its not like a recent development which has suddenly changed the equilibrium. it found its niche and markets both otc and public exchange found their balance of supply and demand years ago.

but as i say its not like yesterdays 300btc from a top pool suddenly hits an exchange once the 100th confirm matures the funds. instead thats done off exchange and then later (weeks/months) the recipients have distributed funds even further and into smaller allocations so that by the time those coins do end up on an exchange due to smaller fish rather than a big whale, the funds are spread more thinly and at different times to not cause a drastic impact/walls

lastly. when talking about supply/demand.
exchanges are very bad at displaying supply and demand.
for one, although there are 18mill coins in circulation. recent graphs suggest only 10% of that sit on exchanges. so the supply is never going to be all coins.. nor should it. so never ever think that fresh minted coins should be put onto exchanges. people can hoard coins if they want, and they obviously do. 90% of people are hoarding

as for demand. again exchanges are poor examples. take AML/KYC that paperwork restricts institutions from buying $millions (120 coins+) the liquidity of exchanges is low per user. so dont expect an institution to deposit $3m to try grabbing 360+ coins.  firstly exchanges would have to go through extra paperwork to even allow that, but also by say the 30th btc the price would be rising and by the time they spent the first $1m they would have raised the price significantly that they would not even get a 360btc target. and be just shooting themselves in the foot the more they buy the more the price rises meaning they are getting less coin for their fiat.

I have been wondering whether bitcoin mining has been even profitable at all during these past few days the slump in the values these past few weeks and am talking specifically about those with a few mining rigs. Most miners sell their coins to people who will later resell them at a higher price or they can sell to people who tend to use bitcoins personally.

Well miners could dump coins onto an exchange, and open a geared short position just before they do it. That'a an alternative way for them to make money, and repurchase their coins when the price has dropped if they want to keep them.

Private and OTC transactions for Bitcoins are not included in the data coming from many cryptocurrency exchanges hence we could not really determine with certainty the many details of that market especially its size and volume though maybe there can be those who can make some estimates.  Here is a good explanation on the OTC market:


I read in some publications that there are times when the price of the Bitcoin can severely be affected when Bitcoin miners decided to unload a chunk of the coins they are holding...which resulted into dumping of the coin value in the market. Maybe if they can choose to do OTC then the impact will not be very visible in the exchanges.

The whole crypto industry will fall but we will never see stats about those transactions, there are reasons why they are doing a private deal obviously to keep it to themselves alone and no information should spread out from both parties.
Private or OTC deals helps miners to cashout instantly the coins reward they have received without affecting the market price, while the buyer benefit from it because he is the one to set the price when deals like this happen.

I think it is a mistake to assume that OTC trades don't affect the prices on exchanges, and vice-versa. The two markets are not exclusive, and supply and demand in one affects the supply and demand in the other.

Well this is what we call anonymity of transactions. This was why BTC was made and this is why they we are soo concerned about illegal activities going around with btc. I know this not any illegal activity. There are absolutely no traces about when these transactions took place or even if they have taken place. Moreover, motives of such bitcoin buyers are pretty straight. As we all know there are not many markets to spend bitcoin so everyone is either holding it to launder their fiat assets into crypto to evade taxes or else they are merely holding it for appreciation in long term. I am clear about the motives but I think there can never be any conclusive reports even if there are they will be more sort of speculative than being based on facts.

I've seen a few people try to produce these reports by checking wallet addresses, but that seems to be quite difficult, and subject to manipulation. I think the really interesting graph would be the changes in the use of Bitcoin for retail purchases. I've accepted Bitcoin for domain name sales, but it doesn't seem to be very common.