It's a self-correcting equilibrium though, since the block difficulty is tied to the hashrate, which will fall as miners pull out.<p>That said, the hashrate is not showing major drops yet:<p><a href="https://www.blockchain.com/charts/hash-rate" rel="nofollow">https://www.blockchain.com/charts/hash-rate</a>
There is a serious problem that is not much discussed. Bitcoin is susceptible to a 51% hash rate double-spend attack. As Bitcoin has grown, this has never been a practical issue. No miner or consortium has had that much hash-rate compared to the rest of the market.<p>But when the hashrate drops below 50% of its previous maximum, that means that there are idle mining resources enough to carry out the attack. And owners of those resources may not mind throwing the whole Bitcoin system into chaos if they can get one last big payday.<p>The lower the active hashrate grows, the smaller the consortium required to make an attack.<p>So watch for chain forks and double-spend attacks. Maybe not this month or this year, but my expectation is it will be part of the eventual Bitcoin downward spiral.
This seems like a temporary problem given the difficulty adjusts? <a href="https://news.bitcoin.com/bitcoins-sinking-price-pushes-hashrate-below-200-exahash-mining-difficulty-expected-to-slide-2-8-lower/" rel="nofollow">https://news.bitcoin.com/bitcoins-sinking-price-pushes-hashr...</a>
As several people already wrote, difficulty adjusts.<p>Are people playing devil’s advocate just for the sake of a rebuttal, or do you all really believe this “time is different”. Its not different enough to me. The macro environment’s influence isn't different enough to observe that the network still functions at a lower hashrate and a lower price.<p>The best conversation is regarding the difficulty algorithm as bitcoin’s is the oldest one and no other community has used it since 2011.
Assume for a moment that the graph in the article is trustworthy. Then mining has been highly profitable for quite a while now and is now getting unprofitable. It has been unprofitable before. That's the same as in every busines: There can be periods of unprofitability. That does not mean that such business will die out completely. Especially after a phase of high profits there are buffers and there will be hope that profits will return.<p>The question is how that graph is created. The mining costs are not the same for everybody. Probably some electricity used for mining is not paid for at market prices. (Including some might not be paid for at all) And even if it were, market prices (after subsidies and taxes) vary proably quite a bit over places where mining is happening.
Here’s what I don’t understand. I’m genuinely looking for an explanation for this.<p>Let’s assume everything works great for BTC. BTC is designed to eventually max out the number of coins. I believe the current expectation is that no more coins will be issued by 2040.<p>What happens after that? If no more coins are issued, there’s no incentive to mine. And if there is no more mining then there will be no more transactions.<p>Will the BTC blockchain just freeze at that point? If so why will it have any value any more?<p>I’m not sure what the ideal expectations are beyond this scenario.
How is "average cost of mining" calculated / assessed? (Following the link just leads to some random tweet).<p>It would be heavily dependent on the equipment used and the price of electricity which would vary a lot by location.<p>And meaningfully it could be split in two: A fixed cost that is still there if the mining stops and a variable cost. And miners would be expected (short term at least) to continue mining until the price hit the variable cost which, in cases where excess free energy is used, is probably very low.
I'm trying to imagine how many days I would lose money mining in hopes of helping establish equilibrium. I can't imagine miners are very altruistic. I can also imagine many of them deciding the party is over and selling their valuable hardware. I don't have a clue what happens when nobody wants to mine it.
As a miner, do you get to chose which transactions you mine? i.e. as the mining pool dries up(why run a rig if you're losing money), can whales sponsor miners to give their transactions priority, giving them superior liquidity to smaller bagholders?
It's not really serious unless transaction fees need to spike massively to compensate, otherwise like others noted, difficulty adjustments will handle to problem just fine.
I think it's only unprofitable in the US. Since China has banned mining, the US has become the country with the largest share of miners, and now as the price drops, mining will simply move to countries with lower costs of electricity.
It was profitable at $1 and it will remain profitable because of the difficulty adjustment. This is tge second uninformed post in 2 days, the other didnt get many upvotes. Who is writing all these fake news?<p>Edit: read up on pow before downvoting facts.