Quote from: poby on June 21, 2017, 04:47:35 PM

Quote from: Rudsild on June 21, 2017, 04:30:32 PM

Quote from: vg54dett on June 21, 2017, 03:57:11 PM

I don't understand why people say the Eth price will crash due to higher hashrate and diffuclty.

If ETHs are difficult to get (to mine), won't their price grow up ?

I agree with that. When more people mine it, the price will go higher.

I would love to hear how that works! By what mechanism, (besides wishful thinking), can people mining a coin cause the price to rise? I don't know how many different ways I can explain this... It's really not complicated...

Difficulty is solely and entirely determined automatically and periodically to try to maintain a constant and fixed confirmation time. When more hashrate power is applied to a coin e.g. more miners mining it, confirmation times start to shorten which causes the difficulty to increase automatically to try to maintain the same confirmation time. It has absolutely no relationship to price. The price is not involved in the calculation.

So we have established there is no mechanical or mathematical relationship between difficulty and price. The only other way, might be if investors saw a rising difficulty and took that as a reason to buy more coins. But it begs the question why the heck would investor care what the difficulty is?? I can't imagine investors look at mining difficulty at all. It's just not relevant as it bares no relation to present or future price movements. All an increasing difficulty suggests is more miners are mining it. All that means is that it is more profitable to mine, usually because it has had a rapid run up in price. Now investors are interested in price movements but why would they look at an indirect imprecise indicator of price action (mining difficulty) when they can glance at any historical price chart?

Anyway, I'm hoping someone can prove me wrong and demonstrate a distinct correlation between mining difficulty and price. I can't imagine how that might work but I try to maintain an open mind

I entirely get what you are trying to saying and really appreciate the semi deep dive into the relationship between price and hashing rate. Let me try to put explain it another way:

The release of coins (ETH) into the world will be CONSTANT regardless of how many miners there are. Because of the CONSTANT rate of release of ETH, miners will have no direct bearing on the the PRICE of ETH.

I am still not 100% sure as to the correctness of that statement, but I think that was your point.