Topic: Will Bitcoin fail when the block reward drops to 25BTC? - page 3. (Read 5009 times)

Because people have already proven that they are willing to mine at a loss as seen back in October.
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Please refer me to the relevant posts and/or give me a valid reason for actually doing it.

Alright! I fixed it myself since it was more of a speculation on my part.
To answer your question: In anticipation, difficulty, price action (or possible lack thereof), general boredom.

I'm not saying I would quit before the drop, as opposed to after, but some will.


Because people have already proven that they are willing to mine at a loss as seen back in October.

Why mine at a loss when you can just purchase bitcoins with the money you would have spent on electricity?

Why do you think this? Why would they do that?

I suspect that miners sell Bitcoin for close to their cost because most of them are good geeks, but poor businessmen. I don't know of any other business where people sell their goods for barely over cost, except maybe farmers before they go out of business. When the block reward is cut in half, they will be forced to double their prices or go out of business. If miners are still undercutting each other by then, I will continue to buy Bitcoin at the going rate.

We've been over this, and over this before. Miners *may* start to drop out before we get there, and difficulty will drop such that mining will continue to be profitable for the more efficient miners which remain. The few who push it to the last minute (unprofitably) will taper off just like we saw after the bubble burst and difficulty was almost 2mil. Then when difficulty catches up to price, people will flock back like we see currently.

We're talking about 8 months away. In that time, many new miners may move in. Existing minors will decide if FPGA is the route for them, and some will continue to mine at a loss in anticipation of high prices eventually. The cost/MHs of FPGA *should* be more in line with each other, and who knows? There may be a new tech out by then, possibly even affordable ASIC, and Amazon ECS. Only time will tell.

Give me a break, the explaining part is not my responsibility. It's not up to me to explain why Bitcoin won't fail, because such claims are absolutely ridiculous, it's up to those who make those ridiculous claims to explain why it would fail. None of the explanations so far have any significance.

A 51% attack is not going to get much easier with the next reward drop, in fact it's very likely that our network is significantly stronger in absolute terms at the start of our 25 BTC era. In relative terms it will get weaker over time but it is not a relevant issue right now. I will explain it more if there are better arguments forthcoming, which I doubt.

Regarding the reward drop, Bitcoin's annual money supply inflation will change radically thanks to this change (for the better) and expecting only a 1-3% price increase is beyond idiotic. It will be difficult to ascertain how much of it will be priced in and how early, and how much it increases simply because of this, but talking about 1-3% makes me confident that you don't know what you're talking about.

This change is a massive confidence shift in the way Bitcoin traders and investors look at the currency. Even now in the face of major money supply inflation we have been very stable at close to $5. 1-3%, you have to be kidding me. This year Bitcoin has 33,3% annual increase in money supply. Next year we will have a 12,5% increase in money supply. This is a massive change. The effects of this, mainly on market sentiment, should not be underestimated.

This talk of FUD is such bullshit. Explain why it won't happen asshat. Don't just call it FUD. That is just so weak!


Anyone who knows any economics realizes that there is no reason to expect more than a minuscule price increase (say 1-3% per annnum) from the drop in block reward. Adding a healthy serving of ass to your reply does not lend you credibility.

(addressing the audience) You should take these kinds of bullshit arguments as a tacit admission of extreme weakness.

And it's good more people are saying it since not everyone seems to get it..

Um, yeah, that's what I said.

It's impossible to know how the block reward drop will affect everything exactly but talking about "failing" is absolute FUD. Most likely the effect will be relatively small, in fact I would bet a lot of money that it will be relatively small. Any smart miner knows that Bitcoin price will rise significantly because of the reward drop (it rises because halving of the money supply inflation will raise confidence in Bitcoin's ability to retain value, thus it will lead to more buying). I'm not claiming that it will double but it will certainly compensate.

I don't think this is priced in yet but I would say that it will be priced in months before the reward drop actually happens. So this is also something that smart miners will take into account. Regardless, I'd say that the effect to network hashrate after the drop will be small. Miners will be taking everything into account way before the drop, when they consider investing in FPGA etc. So it's ridiculous to think that right after the drop there would be any significant effect. Most likely hash rate will adjust months before it happens, depending on the price at the time of course.

Why should people feel the need to pay twice as much just because miners aren't earning as much? Halving the block reward doesn't make bitcoin twice as valuable, and nobody owes you free money for mining.
Block reward halves, miners mining at a loss stop mining, difficulty drops. Simple.

I don't think there's any question that if the price does not double immediately after the reward drop, lots of miners are going to drop out.  Whether somebody maliciously takes advantage of that, there's no way to know.  With only more efficient miners left over, assuming the price doesn't jump up enough, then I suspect the price will continue downward as the more efficient miners can tolerate lower prices and remain profitable.

I think there's a good chance this scenario happens as people will probably price an increase in well before the reward change in anticipation of a possible price increase, thus there won't be a subsequent and sufficient price increase after the change.

Someone who has 51% or anywhere close to it will be making a lot of money, I have a hard time believing that someone would go to all that trouble, money, and time just to attack and kill the chain. More likely they would hide the fact that they even have that much to keep confidence from dropping. Just look at the recent mystery miner, had 15-20% of the hashing power, but the only reason anyone even knew about it was because of the 1tx blocks he was producing.

SELL, SELL, SELL!

Into my short.

Bitcoin block reward drops to 25BTC.

Most people appear to be mining/trading Bitcoin purely for profit.

Most of the hashrate is lost due to GPU miners becoming unprofitable as the price does not double, but only increases 25% or so.

Only FPGA miners and hobbyists securing the network.

This makes the 51% attack much more probable.

51% attack takes place and much trust is lost in Bitcoin.

The end?