For anyone that thinks bitcoin is going to die because the price has been going down needs to readjust their thinking.
As the price has been falling, the hash rate has been continuing to make new all time highs.
Check out the hash rate:
(Source: https://twitter.com/btc/status/1008713672095621120)
As you can see, even as the price declines the hash rate continues to make new highs.
That means more and better equipment (and miners) is/are constantly being added to the network. Things that ultimately help make the network more secure.
It appears the fear of a mass exodus of miners due to falling prices was overblown.
But isn't it already unprofitable to mine bitcoin?
Well that is all a matter of perspective, and where you live.
In some places yes, in others not so much.
Check out this chart that shows roughly the cost of mining by country:
(Source: https://twitter.com/CryptoOutsource/status/1008989550033633281)
As you can see the price of bitcoin is well under the cost of electricity in some countries, while in others, the price is still significantly above the break-even cost.
In the past when prices fell, the price of bitcoin often followed suit, though there was some lag time.
Given how far we have fallen and the fact that the hash rate continues to go up is a testament to newer and better miners being added to the network, and also likely the belief that prices are going to go back up again in the future.
Miners would not be adding new equipment and continuing to mine if they thought prices were headed to zero.
Either way, it is interesting and encouraging to see the hash rate continuing to go higher.
My expectation is that over time, mining will be a break-even endeavor, which means it will likely move to the lowest cost regions/countries and take advantage of the cheap electricity for as long as they can.
Stay informed my friends.
Image Source:
Follow me: @jrcornel
Just keep on mining and Bitcoin will rise 😁👍😁
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That is the hope by some I am sure. Especially the ones that aren't paying their own electricity bill. :)
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If prices are rocketing up, all are happy and nobody is asking "why". Had miners something to do with the highs of November-January? I dont't know.
I think there is a clever self-regulating mechanism in Bitcoin mining. With the same amount of Bitcoins created every 10 minutes, if mining gets too expensive, some miners will go (or mine other cryptos). In this case the remaining miners are getting more of the new coins. If mining results a better business, more miners will come. I don't see why mining costs should influence Bitcoin price, or not very much.
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You are right, it doesn't affect the price very much. Though it is interesting to see the rates continue to go up while prices fall. Like you said as more miners go underwater, you would think the hash rates would start to flatline or decline at some point. They continue to go straight up.
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I'm glad the miners are not slowing down and I hope they are not becoming more centralized. I was worried about the death of BTC for a while.
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In my opinion- growth of hashrate will flatten over next six months helping miners profitability to come up which will decrease pressure on miners to dump their newly mined coins into the market to cover their thinly stretched backs.
That would help BTC prices to appreciate.
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To be honest I am not sure which prices cause them to dump more coins... If prices are high, and they feel they are high, they may want to sell as many as they can. Conversely, if prices are low, and they feel they may be higher in the future, they may hold those coins. Though I can see your point as well.
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That’s what would happen in the ideal world, however, the cold hard truth is that the electricity bill is not going to pay itself.
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True, though being a bitcoin miner likely is not their only source of income. Once you get it setup, it mostly runs itself. Leaving plenty of opportunity for other sources of income.
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But they need to recover the cost of their mining operations as well as capex.
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Wow it's sounds something interesting that the charm is still available in the beauty, will be more beautiful sides reveals join the conversation.
Thank you for keep motivating us dear.
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Anyone that thinks bitcoin is going to die because the price has been going down - has poor remembrance...
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Or is new to the space :)
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Yes, that can certainly be said for many.
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Yes this is true .....👍
And i always give to all. upvote and comments .but no body want give back.all pepole want to becom rich.with support. but they dnt want to support others pepole.
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btc never die wait for December and it will go 60,000$ to the moonnnn
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I hope you are right. Though, that number seems very high to me. I was thinking more around $15k as the likely number. I am hopeful for $20k-$25k, though $60k would be perfectly ok with me.
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Don't see any logic here.
#1 If more highly efficient miners come online, this causes an oversupply condition, and prices should fall, not rise. Rising prices are what happens when miners drop out due to unprofitable biz models, thus bitcoin rises due to reduction in supply. So you have this backwards we believe.
#2 If you are correct and mining moves to lower cost regions, then Venezuela per your chart would be come the #1 best place to mine bitcoin, and thus the BTC price would likely drop to it's cost of product. If your data is correct (we don't really believe that Venezuelan number, we'd want to see reasons why it's so low), then BTC would drift down to below $1,000 per BTC.
While we think that's where BTC is actually going before 2018 ends, not sure you're arguing that.
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Is there really a reduction in supply though, bitcoin is produced roughly every 10 minutes correct? The difficulty just gets adjusted to match the number of miners.
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But same number of coins when distributed over less number of miners - increases profit for miners. Therefore, I argue that hashtate growth has to come down for btc prices to go up
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Have you looked at the hash rate vs. price trends to see if this is actually what tends to take place in the market?
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I have done some analysis in past but I am getting some additional insight into how to look at hash rate growth and it’s relations to price. I am in vacation now. I will publish soon my analysis after my holiday is over.
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Interesting thought, first of all the supply of bitcoin is very low, the effect of the supply increase doesn't really explain the price drop in a short term of 6 months (since january). The logic is here, when the price drops mining should be less incentivized and the hash rate should drop, but according to @jrcornel graph that didn't happen, so either miners are operating at losses now or they are more efficiently mining.
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Yes exactly, the main point was that it is surprising that the hash rate continues to make new highs while prices continue to make lower lows.
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The miners had already committed their investment. They have no other avenue to use their resources. So now they are cutting their losses by mining at losses. And so my argument that additional mining power will not be deployed for some time resulting in reduced growth of hash rate.
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This is a good point. Some of these large scale miners took months or even years to get setup like they are right now, which means they mine whether prices fall or fly.
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The increase in popularity of cloud mining is something that has to be taken into consideration when talking about hash rates.
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Awesome the slowly crawling back of the market is making me a little bit anxious haha! It's very amazing to see that the hash rate keeps increasing. I got to admit now the fees are down, I got more hope in bitcoin. I was possitive that it will stay for a while, but seeing the fees dropped, it could work out for bitcoin.
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The fees are lower today than they were at almost any point in 2017.
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Indeed! It's awesome
This is the fees graph:
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Also segwit adoption seems to have changed the game in terms of fees.
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Yeah...That's a clear indicator. Miners aren't just some petty investors...
They make their mining decisions very carefully, so increasing hashrate represents growing miner's optimism and trust in bitcoin:)
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I still expect your typical year end bull ride.
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Uhmm..interesting about the hash rate. Thanks for the heads up on this info. @jrcornel
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The top players are shaking out the weaklinks and when they are done they will re enter along with big institutional players which will create the next bull run leading to a year end price prediction of 30k. So sit tight and enjoy the ride. #HODL
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What is your theory as to why $30k will be hit?
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채굴원가를 누가 정했나? 단지 전기세로 책정이 되지않는다고 본다.http://goo.gl/YzW4X8
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