Topic: What will happen if there's no price rise for the halfing? - page 10. (Read 13571 times)

The difficulty is always balancing everything, yes. This is based on a period in which 2016 blocks are found - this should take roughly 14 days, or about 10 minutes per block. If, on average, it takes more than 10 minutes per block then difficulty will decrease proportionately. If it takes less than 10 minutes on average then difficulty will increase. These changes in difficulty obviously impact the most marginal miners, "encouraging" them to start or stop mining. This will then feed into the calculation for the next 2016-block period.

The whole network  has worked on comparatively little hashpower - this graph shows (on a log scale) how the power of the network has grown over the last 6-7 years. Ignoring the early days, when difficulty was kept higher than you might expect, difficulty has always tracked hashpower (with a 2016-block lag). Hashpower has occasionally fallen, and difficulty has fallen to match it (there are a few examples during April-June 2015). However, as difficulty fell marginal miners suddenly found that they could mine for a (small) profit, and started mining, increasing hashpower again, and (2016 blocks later) difficulty rose again.

In the long-term BTC won't exhibit supply inflation, so giving BTC to miners finding blocks isn't tenable in the long-term. However, miners will always need some sort of reward for maintaining the network. For this reason Bitcoin has built in a process to encourage a market in transaction fees, and to encourage an increase in transactions fees and less reliance on block reward the block reward is periodically reduced (every 210,000 blocks the block reward is halved). Incidentally, this is the reason why difficulty changes don't happen precisely every 14 days, and the block reward reduction doesn't happen precisely every 4 years - because changes are based on blocks being found, not on time, and the rate at which blocks are found tends to be faster than 1 every 10 minutes.

Ok so the more hashpower the higher the difficulty.

And how much hashpower do we need to get the whole network working? Is the difficulty always balancing everything so it'll always be profitable for enough miners to mine?

I think the miners, will cry out loud it will be a real pity for them.
But the halving is also a good thing for us to make profit if it would rise.

I guess op is not aware of effects of halving. First mining rate reduce to half the value according to current mining level of bitcoins. Demand in a market will get increase for bitcoin, miners will get more pay than now for mining. Once demand is on market. Sure cen percent price will change accordingly.

They will stop differently, that's one thing for sure but most professional miners already have a lot of bitcoins on their wallet. So its no problem for them if it happen, it would be a real pity if the price will not rise at all.

The price will slowly bleed to who knows where.

I don't think all of the miners will stop mining, we may see some of the small miners leaving not the big one. As the current price may be still profitable for big ones which has lower running cost.

well yes i understand that there always be profit for someone, there will be always miners out there, but the point is not getting a reverse trend on the diff

where the diff keep going down because the value is going down, i believe that the halving is there to force a certain threshold on the value, and maintaining the network always more secure than before

I don't think it really matters whether difficulty falls as much as some people think it will. What matters is that it decreases (or increases) in response to the rate at which blocks are found, not by how much it decreases/increases. If it falls a little, a few old miners may purchase new hardware, or a few new miners may enter the game. If it falls a lot many old miners or many new miners or some combination thereof, etc. The point is that the block reward reduction won't be the apocalypse some people seem to think - the system was cleverly designed to anticipate this and find an equilibrium, and has already survived (and thrived!) through the 50 to 25 BTC reduction.

if the diff will decrease because those with high rate will leave than the other with lower rate will add more hash, right now they can not because that hash is busy from those with higher rate

so diff will not actually decrease so much as many believe, unless the price fall under a certain amount

Not directly linked to the amount of miners, but indirectly through hash power. As the computational power of the network changes, blocks are found more or less frequently. Every 2016 blocks the difficulty changes to keep the rate at which blocks are found close to one block every 6 minutes.

Computational power is what matters, not the amount of miners. Given two mining operations with the same computational power - one a mining pool and the other a vast mining operation owned and operated by one very wealthy individual - there's no computational difference to the network between the two operations (i.e. the probability of either operation finding a block is the same), even though the mining pool aggregates numerous small miners.

OOOOOOOOOOOOOOOOH!

I was not getting something xD
So it means that difficulty is directly linked to the amount of miners in action?
Does that mean that we absolutely don't need so many miners? Do we know how many miners we actually need to secure the transactions?

You are not getting something.

"The miners" are not a homogenous group.  Different miners have different fixed costs, different variable costs. They will not stop mining as one big group. The block reward reduction will not come as a total surprise to them - they will have been aware of it just as long as everyone else - and when they determined their own, individual, ROI they will have taken the reduction into account. The most marginal miners may stop mining - but all that means for the remaining mass of miners is that difficulty will decrease.

Hmm... Yes one can. As it will mean the miners are going to die as they won't earn enough to cover their expenses, which will mean they will stop mining which will mean btc is going to die :p

Am I not getting something?

Just because there is no price increase during halving one can't say that bitcoin is dying. This time the scenario might be the same, there might be no price increase during halving as the current market situation of china is worse than how was it during the last years halving

Not on the long term for sure, cause it's effectively a supply demand market.
But if it's on the short term, it could have no or very small effect and thus massive dumping would be the direct consequence -> decrease of price!

Nothing. The current price is good for miners.
But the next generation miners will be even more profitable of the big guys. The small guys will never make ROi.

impossible price not rise after halving, that moment will help bitcoin price up even though up a little but i hope price will jump high at least $100-$200 from last price before halving

If there's no price rise when halving ends i think you should still holding your bitcoins because no stable price of the bitcoin it will still rise even halving ends. So keeping your bitcoins still be profitable.
But miners will be affected if the halving end maybe the difficulty will be reduce after halving.

i think nothing will happen but miners will stop what they are doing right now .