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Firing up additional mining would split the rewards between more people causing fewer rewards per participant. Miners engaged in mining before I arrived would
by nannal 6y ago
Firing up additional mining would split the rewards between more people causing fewer rewards per participant.
Miners engaged in mining before I arrived would have the same costs they had before, but now with fewer BTC to cover them, this would force them to sell at a higher price or operate at a loss until they drown the competition.
There are two ways to look at it.
- Nursie 6y ago"Force them to sell at a higher price" ... so they decide the market? Nope. Miners have costs to cover, mining unprofitably and holding makes no sense whatsoever (you're literally better off turning off your rig, buying on the market and holding at that point)
- nannal 6y agoTurning off your rigs makes them an unprofitable investment you almost certainly are paying interest on if you're running a large operation.
- Nursie 6y agoTurning them on to acquire bitcoins at a higher cost to yourself than the market price just doesn't make sense, investment or not, it won't help you pay down your loan. You're better off buying them from others at that point.
- legolas2412 6y agoForced to sell at a higher price? My dreams of being a millionaire are forcing me to sell this orange for a million dollars. Ergo, oranges will now retail for a million dollars.
- jkhdigital 6y agoExcept that oranges are consumption goods and can be produced in whatever quantity is demanded by expanding production. Bitcoin production is perfectly inelastic, and Bitcoin itself has no consumption value. You need a different analogy.
- nannal 6y agoThat's a terrible analogy. Orange supply could be infinite should we maximize orange production, this is not how Bitcoin works. If there were only 12 oranges produced on all the trees in the world every hour & it cost $500 an hour to operate your orange farm. You therefore have to sell your oranges for at least $42 to cover costs and make a small income However now there are only 6 oranges produced every hour (not 12), what can you do to maintain profitability?
- legolas2412 6y agoAnd if people don't value your oranges that much, you close shop. It is not going to make the people suddenly value your oranges more.