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And that, to me, is the strangest thing about Bitcoin: https://blockchain.info/charts/hash-rate https://blockchain.info/charts/hash-rate The miners, never, st

by compare 12y ago

And that, to me, is the strangest thing about Bitcoin: https://blockchain.info/charts/hash-rate https://blockchain.info/charts/hash-rate The miners, never, stop. Completely disconnected from the market pricing.

deciplex 12y ago
You assume they're all paying for the power. Once you remove that assumption, it makes more sense.
- BobMarin 12y ago
  The reason is much more Machiavellian, namely if you keep the price of entry high and you loose money to mine for 80% of the time then the 20% of the time that it's extremely profitable you have a bigger multiple since the competition is weaker then it would've been otherwise.
  - knodi123 12y ago
    is mining competitive, though?
    - eurleif 12y ago
      Absolutely. A fixed reward (25 BTC) is rewarded each time a block is mined. Each block is based on the prior blocks in the chain, so when one miner mines a block, all the other miners must start over. Blocks are mined on average once every ten minutes, so basically, a random miner is selected approximately once every ten minutes to receive a reward.
      - hueving 12y ago
        Saying they have to start over is implying that you're somehow making progress. The only progress your are making is just ruling out a few inputs from a massive search space. You don't really lose any work when it resets because the work you've done is useless.
        kbenson 12y ago
        I understand the semantic difference, but I'm not sure the distinction matters in any way. The implication that there is progress is tenuous at best.
        clarkm 12y ago
        Of course they lose work. They have to pay the set-up cost of bundling a new set of transactions for the next block.
dvcc 12y ago
Currently, mining is still profitable so it wouldn't make sense for them to stop yet. Once Bitcoin dips below a certain value (around $100 I believe?) then we will have to watch for the drop off.
letstryagain 12y ago
They will only stop once the electricity is more expensive than the mined bitcoins. We're not there yet.
- canvia 12y ago
  Many won't even stop then because of the belief that the price can/will return to previous levels if not higher. Quite the interesting dynamic.
  - riffraff 12y ago
    but that is effectively irrational isn't it? if mining 1 bitcoin costs you 500 dollars and they are sold on the market at 400 why don't you switch off your gear for a while and just buy them ? Maybe the point is people are merge-mining multiple bitcoins, or the electricity bill for them is way lower than we think it is.
    - baq 12y ago
      maybe they don't have the money to buy them because it's been all spent for mining gear?
      - icebraining 12y ago
        Then how can they afford the electricity?
        jafaku 12y ago
        They will earn more coins by paying the electricity and using the already bought mining gear, than if they stop paying for the electricity and use that money to buy coins.
        StavrosK 12y ago
        Not if buying the coins is cheaper than mining them, which is what the GP is saying.

by compare 12y ago

deciplex 12y ago

You assume they're all paying for the power. Once you remove that assumption, it makes more sense.

BobMarin 12y ago
The reason is much more Machiavellian, namely if you keep the price of entry high and you loose money to mine for 80% of the time then the 20% of the time that it's extremely profitable you have a bigger multiple since the competition is weaker then it would've been otherwise.
- knodi123 12y ago
  is mining competitive, though?
  - eurleif 12y ago
    Absolutely. A fixed reward (25 BTC) is rewarded each time a block is mined. Each block is based on the prior blocks in the chain, so when one miner mines a block, all the other miners must start over. Blocks are mined on average once every ten minutes, so basically, a random miner is selected approximately once every ten minutes to receive a reward.
    - hueving 12y ago
      Saying they have to start over is implying that you're somehow making progress. The only progress your are making is just ruling out a few inputs from a massive search space. You don't really lose any work when it resets because the work you've done is useless.
      - kbenson 12y ago
        I understand the semantic difference, but I'm not sure the distinction matters in any way. The implication that there is progress is tenuous at best.
      - clarkm 12y ago
        Of course they lose work. They have to pay the set-up cost of bundling a new set of transactions for the next block.

dvcc 12y ago

Currently, mining is still profitable so it wouldn't make sense for them to stop yet. Once Bitcoin dips below a certain value (around $100 I believe?) then we will have to watch for the drop off.

letstryagain 12y ago

They will only stop once the electricity is more expensive than the mined bitcoins. We're not there yet.

canvia 12y ago
Many won't even stop then because of the belief that the price can/will return to previous levels if not higher. Quite the interesting dynamic.
- riffraff 12y ago
  but that is effectively irrational isn't it? if mining 1 bitcoin costs you 500 dollars and they are sold on the market at 400 why don't you switch off your gear for a while and just buy them ? Maybe the point is people are merge-mining multiple bitcoins, or the electricity bill for them is way lower than we think it is.
  - baq 12y ago
    maybe they don't have the money to buy them because it's been all spent for mining gear?
    - icebraining 12y ago
      Then how can they afford the electricity?
      - jafaku 12y ago
        They will earn more coins by paying the electricity and using the already bought mining gear, than if they stop paying for the electricity and use that money to buy coins.
        StavrosK 12y ago
        Not if buying the coins is cheaper than mining them, which is what the GP is saying.