BTC miners are finally throwing in the towel!
The bear market of 2018 is affecting everyone.
Bitcoin miners, those verifying and securing transactions, are starting to throw in the towel in very large numbers.
According to Mao Shixing, founder of F2pool, between 600,000 and 800,000 bitcoin miners have shut down operations in the last 2 weeks alone.
If you are not familiar, F2pool is the 3rd largest mining pool in the world.
According to Shixing, miners are no longer able to make money at the depressed prices and are having to throw in the towel in regards to mining bitcoin.
More about that can be found here:
https://www.coindesk.com/600k-bitcoin-miners-shut-down-in-last-2-weeks-f2pool-founder-estimates
How much does it cost to mine bitcoin?
The global average cost to mine bitcoin is said to be roughly $7k according to Fundstrat research.
Though it is often cheaper than that in some countries due to cheap electricity rates.
Check out some of the rates:
(Source: https://cryptoiscoming.com/bitcoin-price-vs-cost-of-mining/)
As you can see, the current prices are now getting down to the point where even the cheapest miners are having trouble turning a profit.
The miners referenced above were mostly miners out of China, who are finally seeing prices move below many of their break-even points.
Is this good news or bad news?
Well that depends on who you are.
If you are a miner that is no longer able to make a profit, this is bad news.
It also signals that bitcoin mining will likely get more centralized among those that are able to operate with the lowest costs.
Something that most using the bitcoin protocol would not like to see because the more decentralized the network can be, the better.
However, if you are a hodler and investor out there, the fact that prices are falling below the cost to mine likely means we are near a bottom.
According to Tom Lee of Fundstrat Global Advisors, the cost to mine has traditionally marked a floor that bitcoin usually doesn't trade at or below for very long.
That means that miners exiting in droves could mean we are close to seeing a change in direction for the price of bitcoin.
Finally.
Stay informed my friends.
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Good to know and surprised to see you post about it.
I hope for a good riddance, while I suppose that it will not happen soon.
Bitcoin and all of its forks should die and same for Litecoin.
I remember that I read lately that a 50% attack is coming.
Not sure if it was about Bitcoin, but such news are another step towards it.
The only problem about it is that the best alternative to Bitcoin is listed almost nowhere and cumbersome to use.
Why were you surprised I posted about it?
In regards to your 51% attack...
New study says that is extremely unlikely:
https://bitcoinist.com/bitcoin-51-percent-attack-study/
I was surprised because you make the impression of a shill for Bitcoin whom probably sits on quite a lot of it.
You ignore its bad properties:
waste of energy, centralization of currency ownership and centralization of currency mining, and I probably forgot or was never aware of more.
I don't ignore them, I just listen to what the market is telling me. Everything you have said about bitcoin is true, yet why has it not been knocked off its throne now for close to 10 years? Many altcoins have been better than bitcoin for getting close to a decade, yet here it remains... why?
The market tells you contradicting things over time.
Now the trend is down.
Even you became pessimistic.
When do you choose to care about the market's tells?
Because it had a monopoly for over 5 years out of the 10, and when competition emerged, it was not better, and was even less popular due to bitcoin's relative longevity.
First, no "altcoin" even existed over half a decade ago
Second, no "altcoin" that is better existed for even close to half a decade ago.
Third, as far as I know, only Byteball is better, the rest are shit or worse, or do you know about other currencies that are better?
So much for Bitcoin's legacy, that the entire market capitalization of all of the rest of Bitcoin's competition combined with Bitcoin itself are as big as one DJIA component, at least Gregory Mannarino said so more than once.
Bitcoin and its competition, including Byteball will not break out into mainstream due to the extreme difficulty of their use and the perils of centralized exchanges.
Most people are even less tech oriented and even more risk averse than I, so how can these currencies be adopted by common people?
You claim that Bitcoin remains, but it never and will probably never break into mainstream because of what I wrote.
Ethereum and Litecoin are not better.
Most of the rest are even worse.
"First, no "altcoin" even existed over half a decade ago"
Namecoin was the first altcoin and launched in early 2011. I'll respond to the rest of this later.
Regarding the market telling me things... it tells me things in how it has built the infrastructure. There is a reason that bitcoin is the most widely used pair at exchanges. I don't decide which coin people are going to stick with, but for whatever reason, bitcoin has been crowned king and not given up that crown despite literally thousands of altcoins claiming to be better than bitcoin in different ways over the course of roughly 8 years. That could certainly change at some point, but for now, it is what it is. The fact that bitcoin is merely software that can be upgraded and updated at any time likely is a big part of this. What bitcoin lacks today, it could have as a feature tomorrow, ya know?
Bitcoin doesn't have to break into mainstream as a payment option to make it a wildly successful investment. I wrote previously about endowments moving in, pension funds will be next. They will take a 1-3% allocation in bitcoin because it is not controlled by any government and it is not correlated with any other financial assets. It makes for a great portfolio diversification tool. These funds collectively control trillions of dollars.
With that being the only driving force, bitcoin could still reach new highs even if it has nothing else going for it, though it likely will have other advantages as well.
How does the market tell you that?
Which "altcoin" existed 7 or even 6 years ago?
You mean that it can turn from a wasteful POW blockchain to a DAG, or that it can become inflationary like Steem, or both?
This is obviously and evidently true.
What are endowments?
Pension funds will not be allowed to do it, the same way that they are forced to loan money to tycoons whom bribe judges to default on their debts and bribe politicians and regulators to force the pension funds to buy their debt again and again.
If so, why are you not buying it like crazy now at a discount?
Where to start...
I just told you that namecoin was created in early 2011, close to 8 years ago at this point.
The market tells me that because if there were a better option, the market would use it!
You do know that bitcoin is inflationary as well right, as are most cryptocurrencies?
Endowments = https://cointelegraph.com/news/report-harvard-stanford-mit-endowments-all-invest-in-crypto-funds
Endowments were not allowed to buy it at first, just like pension funds weren't. They all will be soon, a bitcoin ETF is the final hurdle.
I am buying it hand over fist. I have been buying all the way down actually.
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Everyone is getting rekt in crypto, except exchanges, they are still making a killing.
Yep. Only crypto businesses in the world making money right now.
Judging by the charts, I would say we're likely in for a move back upwards...but I don't know that the price to mine is necessarily something we can rely on. Though the price being so much lower than the cost to mine does mean that the network starts to break down. Now I suppose the only people left are the most efficient in the cheapest places to operate. And of course the people with the deepest pockets...
I personally think it's probably a good investment at this level...but the question is in what time frame? It's on a support line...will it stop here? Will it bounce back? Will it bounce back to 5k or 6k or 7k? Higher? Lower? Whether or not it bounces back, are we going lower?
If it does stay below the average mining cost for a month or more, what will that do to the network?
Great questions and I share just about all of them. I think if you can hold on for the long-run, say another 3 years or so, buying right now is a good idea. Shorter than that, I have no idea.
Good info @jcornel 👍🧐👍
Thank you corndog.
Bound to happen at these prices
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Yep. I think many miners have been throwing in the towel for months now. It just that we are finally seeing even the low cost producers throwing in the towel.
The exit of miners will reduce the supply ultimately which would lessen the fuel currently out in the market to sell so price could potentially find a balance as these economic factors stabilize. I think it is net good news despite the centralization concern...
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One might think that, but isn't bitcoin designed to produce a set number of bitcoin per day no matter the number of miners? The difficulty adjusts to produce that said number based on the number of people mining... correct?
Sometimes I feel very happy and proud of myself. There is a time where my account value reached to around 1,400$ and I decided to sell my all s.p.s and invest them in mining. But then my laptop sucks and then I cancelled the plan. And now I think it's the god plan to save me :)
Haha so what did you end up doing with that? Still mining?
No, I didn't power down my Steem power, so I didn't invested in mining, so I'm safe now☺☺😊
Unless steem keeps doing down. Though, seeing a nice bounce today.
Yup, I think so
Yes it is a funny time in Cryptocurrency. To my opinion there isn't too much to worry about. it is only money. Things will get better later on. No need for people to leave crypto at all. Its all about patients and determination. Thanks for sharing!
There is likely a lot of truth to this. If we could just fast forward about 12 months from now. I imagine people will feel a lot better about owning bitcoin.
Hmmm if there are less miner bitcoin will be more profitable right, because its easier to mine. I like the self correcting system of bitcoin.
Yes. I believe there is about a 9 day lag or so from when hashrate drops to when difficulty adjusts. Those that can stay in the game now will likely start making money again later on.
almost 1 million miners?? didn't realize there were so many of them
Yep, and this represents only a fraction of all the miners out there.