Forget $9,000… Bitcoin falls below $7,000 | Hacker News Reader

Forget $9,000… Bitcoin falls below $7,000

arstechnica.com

59 pointsmaltalex64 comments

At what point (BTC-USD price) does the mining mini-industry start becoming unprofitable? With the large scale investments in massive climate-controlled datacenters crammed with ASICs anchoring the world's biggest mining pools, there must at some point be a negative ROI. If the price passes that threshold, would we potentially see many of these mining operations scaling way down or packing it in and retiring? Selling off equipment? I'd love to know.

Has to drop to a third of what it currently is at according to https://digiconomist.net/bitcoin-energy-consumption

Depends what the cost of electricity is, how efficient machines are and network hashrate (directly influences difficulty).

By my calculations prices could go down to 3kCAD and it would be breakeven for me in Quebec. That is not factoring difficulty drop as many might stop mining altogether.

Climate controlled datacenters? From what I've seen, these things tend to be run in sheds, even if the floorspace is measured in acres. https://qz.com/1055126/photos-china-has-one-of-worlds-larges...

The only thing that matters is if mining brings in more money than it costs to operate.

Sunken costs (buildings, hardware) are just that - sunken. Just like the shale oil industry where people were predicting that drilling would stop after ROI became negative, but that didn't happen, it's still better to lose 60% than to lose 80% of your investment.

I want reasonably priced GPUs for machine learning, so I'm hoping GPU miners will flood the market to liquidate their assets (most can probably get back their much of their sunken costs if they sell now) rather than risk mining it when the price looks like it could go even lower.

Then you likely want to see a crash in the price of Etherium. GPU mining for Bitcoin hasn't been profitable in quite a while.

Yep, Etherium is down 50% from peak as well :-)

Shale has considerable startup and wind-down costs.

Mining really doesn't.

My opinion is that this drop is going to strengthen cryptocurrencies/tokens as a whole. There are a number of things that have happened leading to this drop since the high the first week in Jan. Some of the most recent:

- Tether auditor quits/is fired.

- It is revealed that Tether may have manufactured $1B worth of Tether, which it sold for Bitcoin on Bitfinex, leading to much of the gain in Bitcoin.

- SEC investigating several recent ICOs, they were nothing but scams.

- China is restricting access to non-Chinese exchanges.

- Similar restrictions in Korea.

- Stripe drops support for Bitcoin. [edit]

- Bitcoin settlement times and transaction fees are skyrocketing.

- Credit card companies no longer letting you buy cryptocurrencies.

And those are just off the top of my head.

Businesses and governments are still trying to figure this all out. Once they do, cryptocurrencies will come out stronger because they've negotiated this and have answers for these questions, or the weak ones have died off because of it.

Much like the SCO lawsuit being good for Linux. For a white it was a lot of drama and fear, but in the end Linux came out stronger because it had been through it.

IMHO.

> - Square drops support for Bitcoin.

You're thinking of Stripe. Square is announcing their plans to use Bitcoin in their cash app.

Indeed, thanks!

Much like the SCO lawsuit being good for Linux. For a white it was a lot of drama and fear, but in the end Linux came out stronger because it had been through it.

I have to disagree with this.

If SCO actually had been arguing something interesting from a legal point of view, Linux (RH, IBM, Novell, etc. in this case) would have then had a more solid legal foundation. If, for example, this had been a case about GPL enforcement.

However, SCO spent a long, long time obfuscating what exactly they were arguing about. They spent a long time (and lots of resources) trying to just wear down the defendants and get them to settle.

When finally distilled by the totally awesome Judge Kimball and the defense teams, what was truly left was a small pile of crap, from a legal point of view. It did nothing to set precedents going forward, and we (as a society) didn't end up learning anything of value, other than that BSF (the main law firm for SCO) was morally bankrupt.

So you're saying cryptocurrencies would have been weaker if the opposite of all those things had happened? That's hard to imagine

So you're saying cryptocurrencies would have been weaker if the opposite of all those things had happened. That's hard to imagine.

Maybe GPU prices will finally start to go down, especially after used 1080TIs flood the market

Hopefully, as it seems to finally be pulling down the most popular GPU mineable coin, Ethereum:

https://www.coinbase.com/charts

Ethereum at $700 would have be crazy profitable 6-8 months ago, but it no longer is, due to increased difficulty. You might scrape a little profit there, but in June that would have represented ~$10 in profit a day on a 1080TI. Now it's maybe $2.

Will the difficulty adjust downward again?

As miners leave and hashing power goes down the difficulty will go down

Only indirectly through Ethereum and other currencies. Bitcoin itself has not been mined with GPUs for a long time now.

That's ok, Ethereum is down to half of what it was a little over a week ago, Monero is also down to less than half of it's high price in the last month, etc. When Bitcoin has large swings up or down it tends to drag the whole crypto ecosystem with it.

You really don't want a used mining rig GPU, but yes, the prices will go down overall as the market gets flooded with used GPUs.

An open-air case running a GPU (sometimes undervolted) at a constant load versus a "gamer" GPU going through heat cycles (and sometimes overclocked)?

I'd take a mining rig GPU for a discount.

The biggest problem that mining GPUs tend to all suffer from is fan failure. I'm speaking from experience.

Replacing a video card's fan is certainly doable, but it isn't nearly as easy as replacing a CPU or case fan (due to the fact that so many GPUs have custom fan setups).

Excellent point, I had forgotten about this.

Some of the GPUs (like Sapphire's) have fans which are easier to replace. These are not the norm. Also, being easy to replace doesn't mean they are easy to acquire.

Maybe, maybe not. I've still got 2x machines running old 7950s which were mined with for over a year and they're running perfectly fine.

Gaming and general computing is such a low intensity activity - if they didn't break while they were mining I figure that they're comprehensively stress tested at this point and they'll run til they're too old to be useful.

I can’t help, but think about the megawatts of electricity turned to heat over something for which the floor is literally $0.00 USD. I truly hope that Btc ends up being the catalyst for something worth what currently appears to be an incredible waste of a dwindling resource.

“So how did you make your fortune Alice?”

“Well Bob, I polluted the world a bit at the cost of enough power to light up a city for a week.”

I think you just mined a completely new crypto-joke.

They rehashed an old one.

There are many things produced that bring no value but pollute the world... take cigarettes for example.

Cigarettes produce value! They take the edge off.

There must be a more cost-effective way to dilute the population. Space seems ripe for disruption.

$500k for a one way ticket to Mars?

At least you can cash out a cigarette by smoking it. That’s value right there, even if you don’t appreciate it yourself.

Or 10K parking lots running 500+ 1kw HPS bulbs.

Wasteful and useless are not the same thing. A $0.00 is truly useless, while the lights in parking lots are simply wasteful.

Also, how are we defining value? Bitcoin certainly brings secure transactions to the table which has its own value (just ask the likes of Western Union, Paypal, etc...)

It sounds like you have a narrow definition of the word 'value'. Care to elaborate?

Cigarettes are valuable, they’re just harmful as well. There are also legitimate medical uses of cigarettes for schizophrenics and perhaps others. It’s a dubious product at best, and a really poor choice for most, but some people enjoy smoking. Nuclear bombs are harmful and destructive, but hey do have a use regardless of any consensus regarding their imagined value.

What can you do with a Bitcoin when no one wants to buy it from you? Try smoking it? A better analogy to Btc using cigarettes would be collecting the heat from burning cigarettes and trying to sell that.

> I truly hope that Btc ends up being the catalyst for something worth what currently appears to be an incredible waste of a dwindling resource.

This is exactly what I had hoped, too, but it hasn't materialized yet, and I'm losing hope it will. Instead of inventing some ultra-smart general purpose supermachine people stucked to producing very specialized hardware able to do just one thing.

There is some glimpse of hope: now that it's less and less profitable to use electricity, the miners might have more incentive to use different forms of renewable energy rather than anything else. This can have various unpredictable consequences though...

Aren't miners mainly using hydro power right now?

Hydropower is renewable, but it's not very scalable (once you've dammed up your biggest rivers, that's it, you're done; hydro has been capped in the US for decades because of this). Hydropower is also quite ecologically damaging, though in the local sense rather than the global greenhouse gas sense.

No they are not.

Electricity is reasonably fungible. Hydro power is cheaper locally because you lose energy in transmission, but if they where not using it that energy would be shipped out and replace peaking power.

No, they are using whatever is cheapest.

Do you also get sore thinking about the pollution and waste of energy caused by people playing video games?

Also, if the cost of Bitcoin falls to $0, I will want to collect all of the coins for free. But then someone else will probably offer $0.01 for them, so then I'd need to offer $0.02. But then maybe someone else will offer $0.03. And so on and so on. The price would only drop to zero if everyone decides there's no useful utility behind Bitcoin that makes them desirable to hodl or use. I just don't see that happening.

Passive-aggressive paraphrasing, for free:

> then video games are bad! Checkmate!

> assuming people assign BTC value then BTC will not reach zero value

> I don't think that will happen so it won't happen.

I'll accept your criticism, except for:

> > assuming people assign BTC value then BTC will not reach zero value

Please explain to me what's wrong with this. If there's still at least two people who value BTC enough to pay to own it, how can it reach zero value?

I can't dispute the statement if it happens to be vacuously true https://en.m.wikipedia.org/wiki/Vacuous_truth

It's true people can assign value. It's not necessarily true that they will.

One could argue Bob provided a valuable service by calculating some hard to calculate sums which could then be used by others securely.

Isn’t that sort of a circular argument? The calculations are trivial, but difficult, and only have value as proof of expended energy. That proof only has value while Btc has value, but it has no other use.

Proof of Work algorithms are not hard to calculate, it's simply designed to increase capital costs to access writing to the database (adding the next 'block' set of transactions to the blockchain).

The actual math amounts to a best effort guess in a lottery for write access to a database.

The network would function just as fast with 3-10 computers as it does with 3 billion times the amount of "computing" power.

In summary, Proof of Work is designed to waste as much energy and capital input as possible.

Some previous discussion https://news.ycombinator.com/item?id=16310690

So, the latest drop seems to be triggered by credit card companies blocking purchase of cryptocoins "'cuz volatile".

Am I missing something? Since when do CC companies get to decide where you use your card? I thought it worked the other way around — businesses decide whether or not they accept CCs.

Are there other examples of CC companies blocking (legal) purchases made by people with good credit history?

The greater fool basis for valuation runs out eventually. I believe this is simply a bubble popping.

So long as they are able, so long as it's profitable, people speculating in cryptocurrency will encourage yet more bubbles.

Some credit card networks, processors, and/or banks also prohibit counterfeit or unauthorized goods, gambling, marijuana, tobacco, weapons, fireworks, radioactive materials, mug shot publication, bankruptcy lawyers, psychic services, etc. (copied from Stripe) I thought they also banned the sale of human hair (no joke) but maybe that's been changed.

Also keep in mind that these banks allow you to buy cryptocurrency with debit cards, just not with credit.

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