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Offline gamey

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It seems possible we might see a black swan event.  If price drops below breakeven on mining wherever these big mining farms are, they could start shutting off the farms.  If this was to happen right after a difficulty adjustment then it could cause enough disruption to further drive the price down. Then once the difficulty goes down farms jump back into mining and we have 2 weeks of fast blocks but then there are just more to sell on the market.............  So many things could possibly happen.  It will be interesting to see. 

At least this time of year home miners can subsidize power consumption by using heat waste to warm a dwelling.

As for me, I was hoping BTC would rally back up but once it hit 280 I sold what I had left.  Sigh.  It seems likely to me it could just go down to 200ish again.  A lot of true believers already bought in some time ago.  I suspect this won't be a big deal for Bitshares and might possibly be a net positive.  I hate to see BTC tank like that because a lot of neat projects are going to be hurting.
« Last Edit: January 04, 2015, 11:01:40 PM by gamey »
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Offline Ander

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As soon as some miners switch off, the difficulty will adjust back down some (within 2 weeks), and then they will turn back on (or the other miners wont be losing so much money).

However, I think prices would have to fall a lot more for most miners to actually shut off.  As long as they make more than the electricity cost, its worth it to run them.  They are going to run at loss overall when you consider hardware costs, but that is a sunk cost at this point and they are going to run in order to lose as little money as possible.
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Offline Akado

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If somehow the 1.0 release is well timed, we could use this to our advantage. It would go along with our marketing. People would find shelter in bitAssets.
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Offline gamey

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As soon as some miners switch off, the difficulty will adjust back down some (within 2 weeks), and then they will turn back on (or the other miners wont be losing so much money).

However, I think prices would have to fall a lot more for most miners to actually shut off.  As long as they make more than the electricity cost, its worth it to run them.  They are going to run at loss overall when you consider hardware costs, but that is a sunk cost at this point and they are going to run in order to lose as little money as possible.

There are 2 types of miners, those who will run their machines irrationally and those who are purely in it for profit.  Those in it purely for profit and are rational are going to turn the things off because it no longer makes economic sense.  If the price fell after a difficulty adjustment and below break even another 33% in a few days, miners could start shutting off early in the readjustment phase.  That could push that 2 weeks out to 3 weeks and the problem could be compounded.  The network starts to slow down and gets a lot of press causing more scare mongering.  Then when difficulty does readjust everyone jumps back in mining for the next ~10 days then it readjusts and everyone jumps off quicker than ever before.  BTC could just fall to pieces.

I don't expect the above to happen, but to me it seems clearly possible.  Or some subset of it happens.  Most likely it won't, but thats not what I'm trying to discuss.

The larger more corporate mining farms aren't using the wasted heat either so there won't be any winter time subsidies in that regard. I also believe a lot of the smaller miners have left the game after having so many bad experiences.  This has likely centralized mining even more around the large mining farms.

I assume BTC never implemented Komoto Gravity Well or whatever it is..  they never had any need because they never had this problem.  It wouldn't kill BTC but ouch.
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Offline Troglodactyl

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At this point isn't BTC mining sufficiently centralized to avoid this?  If viewed as a single rational actor, the mining industry would have to be quite short sighted to allow this to happen.

Offline gamey

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At this point isn't BTC mining sufficiently centralized to avoid this?  If viewed as a single rational actor, the mining industry would have to be quite short sighted to allow this to happen.

It is centralized at the pool level but not under that.  Miners and pools are typically 2 separate entities unless "cloud mining". 

I agree it is a bit irrational to cut off miners to the point of hurting the network, but when you are operating at a loss with no real guarantee it will go back up anytime soon - would you just start burning capital to help BTC?  Doubtful I would.
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Offline jsidhu

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Offline Empirical1.1

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At this point isn't BTC mining sufficiently centralized to avoid this?  If viewed as a single rational actor, the mining industry would have to be quite short sighted to allow this to happen.

It is centralized at the pool level but not under that.  Miners and pools are typically 2 separate entities unless "cloud mining". 

I agree it is a bit irrational to cut off miners to the point of hurting the network, but when you are operating at a loss with no real guarantee it will go back up anytime soon - would you just start burning capital to help BTC?  Doubtful I would.

It's an interesting idea. Considering the hashers gave little thought to getting Ghash.io to 45% or whatever it was a while ago, many will probably be inclined to shut down if it's not profitable to mine, even if it damages Bitcoin for sure.

Offline Gentso1

I want to say that it would take 14 days for a difficulty adjustment and that transaction times would increase to hours(trying to remember what I read on the subject before) .

I don't consider it to be in the realm of possibility for the network to go dark anytime soon

Offline matt608

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$50 feels more like the fair price for a bitcoin to me, the price before all the willy report fraud.  That imo is the bottom that needs re-testing.  How can any serious investor buy it when the past spikes were probably greatly influenced by fake buy pressure?  Bitcoin needs a reset.  It is a bit sad and it will hurt the whole space but the crypto 2.0s with long enough legs can run fast enough to achieve lift off while it crashes.  There could be a boom before it crashes that low though.  I'm a fan of DanVs predictions.
https://www.tradingview.com/v/A1mFwkEG/ He predicts a crash (shown on another chart somewhere...) to a new low after a bull run starting in a few months.  I don't know if $50 is low enough for miners to stop...

Of course that may not happen at all, who knows. 

« Last Edit: January 05, 2015, 09:52:05 PM by matt608 »

Offline Ander

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DanV, as well as multiple other elliotwave chartists that I follow, are predicting a low in the 200-250 range, a couple months from now.  It is a good count, and a pretty reasonable prediction, imo. 

There is a massive difference between the $200-250 range, and $50.  The ultra bearish attitude that many of you here have towards bitcoin hurts our perception in the eyes of bitcoiners, imo.  If you want someone who is interested in bitcoin to become interested in bitshares, the absolute WORST thing you can do is tell them that bitcoin is going to $50.

Far better would be to predict something like 'while Bitcoin goesover $1000 in the next bull run, Bitshares will go to $1.  While Bitcoin goes up 10x, Bitshares will go up 100x'.  This indicates Bitshares potential to massively increase in value while not immediately prejudicing them against you and evoking a hostile reaction by telling them the thing that the most idiot troll bears have been telling them for months. 

If you would all be less hostile towards bitcoin, it would help us gain better adoption among the current crypto community.
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Offline matt608

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DanV, as well as multiple other elliotwave chartists that I follow, are predicting a low in the 200-250 range, a couple months from now.  It is a good count, and a pretty reasonable prediction, imo. 

There is a massive difference between the $200-250 range, and $50.  The ultra bearish attitude that many of you here have towards bitcoin hurts our perception in the eyes of bitcoiners, imo.  If you want someone who is interested in bitcoin to become interested in bitshares, the absolute WORST thing you can do is tell them that bitcoin is going to $50.

Far better would be to predict something like 'while Bitcoin goesover $1000 in the next bull run, Bitshares will go to $1.  While Bitcoin goes up 10x, Bitshares will go up 100x'.  This indicates Bitshares potential to massively increase in value while not immediately prejudicing them against you and evoking a hostile reaction by telling them the thing that the most idiot troll bears have been telling them for months. 

If you would all be less hostile towards bitcoin, it would help us gain better adoption among the current crypto community.

I'm not being hostile to bitcoin, I hope it doesn't do that, a rising tide lifts all boats.  I'm just saying it's a possibility.  Lower 200s could well end up being the bottom, that seems more likely.  But what if the Winklvoss ETF is a flop?  Everyone's holding out for that, if demand for it is underwhelming $50 is a real possibility. 

Look at the yahoo stock chart price from the dot com bubble, it's insane (all time chart)
https://www.google.co.uk/finance?q=NASDAQ:YHOO&sa=X&ei=UAyrVNivLMrgavKsgegG&ved=0CCUQ2AE

It went from $108 to $4.30 in 2 years.

There no reason to believe bitcoin wont behave like that.   

I thought I saw a long video where Danv tentatively predicted a crash that could be even lower than a low 200s, he might not have done, it was months ago that I watched it I can't remember.

Who knows maybe the winklevos ETF will be a big success and everyone will start holding bitcoin.  It's perfectly possible there will be more bubbles and gradually more adoption, that sounds like the most likely scenario to me.  The blockchain.info chart of the number of transactions has been growing nicely (apart from a recent slump, perhaps due to the holiday season) https://blockchain.info/charts/n-transactions-excluding-popular?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=.

I'm just speculating that it's possible the last '2 bubbles' were actually 1 bubble, in which case it has more popping to do.

(sorry gamey for derailing your thread somewhat)
« Last Edit: January 05, 2015, 10:43:24 PM by matt608 »

Offline gamey

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I want to say that it would take 14 days for a difficulty adjustment and that transaction times would increase to hours(trying to remember what I read on the subject before) .

I don't consider it to be in the realm of possibility for the network to go dark anytime soon

Yes.  If the timing was right then you could see the network start behaving like a fly by night altcoin being hit by multipools.  It really hurt a lot of POW coins. 

I never thought this was *going* to happen.  It was just thrown out as conversation because I do believe it is in the realm of possibility and not terribly far fetched.  A crash right before or after a difficulty change and the big mining farms shutdown because of their power bills. Boom the network difficulty starts yoyoing from profitability to non-profitability.

I have read rumors of state sponsored companies in China utilizing free power.  It would be interesting to know if this has any truth to it. That would mitigate the problem.
« Last Edit: January 05, 2015, 11:08:27 PM by gamey »
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Offline Gentso1

I want to say that it would take 14 days for a difficulty adjustment and that transaction times would increase to hours(trying to remember what I read on the subject before) .

I don't consider it to be in the realm of possibility for the network to go dark anytime soon

Yes.  If the timing was right then you could see the network start behaving like a fly by night altcoin being hit by multipools.  It really hurt a lot of POW coins. 

I never thought this was *going* to happen.  It was just thrown out as conversation because I do believe it is in the realm of possibility and not terribly far fetched.  A crash right before or after a difficulty change and the big mining farms shutdown because of their power bills. Boom the network difficulty starts yoyoing from profitability to non-profitability.

I have read rumors of state sponsored companies in China utilizing free power.  It would be interesting to know if this has any truth to it. That would mitigate the problem.

Even id the big farms shut down you still have all the die hard's. Transaction times would slow to a crawl and further damage bitcoin's image and business. I would think that companies that depend on bitcoin like circle and bitpay would prop up the network with hash in the short term. Either way their are too many companies that are making money from bitcoin to allow it to die anytime soon.

The chart I like best predicted support in the 250+ range and shows a long term price prediction of 133$....

Offline svk

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