[closed] Mining difficulty and bitcoin price in 2013?

When the mining difficulty goes up for bitcoin, will the price go up or down, and why?

asked 15 Nov '12, 00:31 kenuri 9315 kenuri's gravatar image
closed 29 Nov '12, 07:30
1

i will accept an answer either when only one answer has the most votes and no more activity or on the 28th when the difficulty goes up.

(21 Nov '12, 02:48) kenuri kenuri's gravatar image

The question has been closed for the following reason "Atruk won 42.00 mBTC for the best answer." by kenuri 29 Nov '12, 07:30


I think the trend is upward, but there is going to be more volatility than there has been in this last half of 2012.

The big question is when ASICs hit, will enough miners pick them up. If not there are probably going to be a number of miners running GPU farms that pack it up when their returns dwindle. Many miners though are probably going to switch to ASICs much as they switched to FPGAs (At least the smart ones tired of the powerbills from running many GPUs at 100-350 watts a piece switched). If the early ASIC miners don't dump product, or enough have the foresight to control the rate they push coins on the market a GPU miner exodus may be delayed. It seems that the behavior of AISC miners is going to have a lot to do with value at least early in this transition.

I don't think any single ASIC miner is going to be able to impart whole dollar market swings on their own, and I doubt anyone is paying off a Mini Rig SC in a week, because they as well as most ASICs are being shipped in batches by their manufacturers in order to avoid this kind of disturbance. What can drop the price wildly is if a lot of miners start selling any coins they've saved up.

This kind of drop would probably be good for bitcoin though by creating an opportunity for more people who want to spend them to get their hands on them to spend. The more people with bitcoins to spend is going to increase their attractiveness to merchants. I think a lot of people experiment with Bitcoin, find the affiliate offers that pay less than a full millibitcoin and then decide to back out. I've done that a couple times, but Rugatu is one of the first opportunities I've found that allow you to get not inconsequential amounts of bitcoin to start with. The more people who can get bitcoins in whole number amounts the more attractive bitcoins are going to be to merchants.

For all that happened with bitcoin so far I think I has a future, especially with the ubiquity of android smartphones to become the friend to friend currency. A drop in value with a sell off from disgruntled GPU miners would followed by stability arising from committed miners running ASICs with the drop in block reward. Always a strong network hash rate has kept bitcoins from dropping below dollar parity so even with ASICs and lower power consumption to achieve monster hash rates the $8-$12 equilibrium the past few months isn't going to be below where bitcoins will spend most of 2013.

I think the biggest question though is, will there be enough ASICs.

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answered 16 Nov '12, 18:21 Atruk 3.2k113 Atruk's gravatar image

To people taking about a fall from 7000 to 3500 and predicting a doubling, or considering that a shortage you have to remember the old bitcoins. The block reward isn't being halved because of some great metaphysical imperative. It is being halved because bitcoin was designed in a way other than it would keep growing until infinity bitcoins. Yes the reduction in mining was planned with the idea of supporting their value, but I imagine quite a bit of that is already priced into their value unlike cough, cough the poorly conceived imitator solid coin.

(16 Nov '12, 21:32) Atruk Atruk's gravatar image

So far bitcoin price has loosely been tied to the cost to mine. There will be an initial flood of newly mined coins when the first ASICs start mining. Some miners are going to need to dump those coins at whatever the current price is to cover their investment. I think that there will be enough coin dumping to drive the price down below $8/btc. The higher MH/watt means the cost to mine is lower so miners can afford to sell at a lower price. The high cost of hardware may balance that out a bit but I don't think it will completely cancel out the effect.

The real question is what happens after the dust settles and the system start to equalize again. I think after the difficulty skyrockets and electricity cost becomes the limiting factor again we will see bitcoin prices go up significantly.

Think about this:
If only one BFL Mini Rig SC(1,500GH/s) started mining and no other ASICs that miner would be able to mine roughly 3000 coins and pay off their $30k investment in about week. That alone could bring the price down $0.75 if sold at once.

At least 6 of the Mini Rig SC have been preordered along with several of the smaller units. When/If delivered that is a lot of coins and a very rapid difficulty increase.

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answered 15 Nov '12, 01:00 jsCoin 1.0k4 jsCoin's gravatar image

Mining isn't the only factor and I would add the price raise or fall based on the amount of trading per day similar to stock market!

Consider the following:

the-rise-and-fall-of-bitcoin-a-brief-history

The above link give a brief history of bitcoin raise or fall based on other reason!!

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answered 15 Nov '12, 09:40 splat44 4.5k17 splat44's gravatar image
edited 15 Nov '12, 10:25

Last month the Bitcoin price was around $11 and $12. So every day miners produced approximately 7000 Bitcoins and sold their Bitcoins for $11-$12 . Next month when only 3500 Bitcoins are produced there are 3500 Bitcoins missing on the market. If people still want to by the same amount of Bitcoins like they did last month the price could easy double. Therefor I think price is going up up up ...

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answered 15 Nov '12, 20:54 brunozisterer 2096 brunozisterer's gravatar image
edited 15 Nov '12, 20:56

The price will be going down for bitcoins rapidly in 2013. The market may even crash. There are new bitcoin mining rigs coming out called Jalapeno Miners, which will only cost between $150-300 a piece. These miners are specifically for bitcoin mining and are able to mine at about 3.5 GH/sec. Since the price of these will be so low, the market will begin to have an overwhelmingly large amount of bitcoins being mined, and the difficulty will shoot very far up. That, along with the rapid mining of bitcoins, will make the price go down.

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answered 16 Nov '12, 08:36 ibrennan 963 ibrennan's gravatar image

certainly clear up. because Bitcoin is not related to the situation in other currencies such as the rule set. Bitcoin growing up because users who use the computer network system in use by the user.

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answered 17 Nov '12, 20:19 mojo31 612 mojo31's gravatar image
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answered 21 Nov '12, 22:30 andrewxxx 1115 andrewxxx's gravatar image

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Asked: 15 Nov '12, 00:31

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