Quote from: enmaku on June 24, 2011, 06:09:37 PM

Quote from: ColeFinlay on June 24, 2011, 06:01:21 PM

The equilibrium happens when the the cost of buying and running a miner is roughly the same as the income.

In the end, by the time everyone is investing in something, it loses its profitability.

Not really, the equilibrium will be influenced by the profitability certainly enough but I doubt we'll see mining become truly UNprofitable.

I have rigs in my living room, bedroom and kitchen. They make a ton of noise, lots of heat, I've had to add portable air conditioners to parts of my house, I have to keep one eye on my pools' status tables to make sure they're all still running and connected, every so often they need reboots, maintenance, etc. It's not the worst job I've ever had but it's still a bit of a hassle and there IS a baseline income below which it's no longer worth my time - and that baseline is > $0.

If you were correct, people would only leave when the net gain of running a miner became zero, which simply isn't true. Once we fall below a certain level of profitability, we'll begin to cross other folks' (and maybe my own) personal thresholds and they will pack up their rigs and go home. At this point, difficulty drops and mining becomes more profitable again.

Check out this post: http://forum.bitcoin.org/?topic=7427.0

There's a wonderful chart there that shows an arbitrarily scaled price over difficulty. See how it dips then climbs and repeats that pattern over and over? It's called homeostasis - you may have learned about it in your Biology class, but they should've taught it in Economics as well

Yes but you got in early, and ideally have already recouped your intial investment on the rigs you set up. If someone was looking to get into bitmining now, I honestly don't think it's worth it, the unknowns with regard to BTC, and the expected time taken to recoup your initial investment on your rig are too high.

There's also alot of people who can mine unprofitable rigs - anyone who doesn't pay their home electricity bills, anyone who can run them on workplace cpu/gpu cycles. That makes profitable mining more difficult for the rest.

We haven't reached a point quite yet, hell Nvidia GPU mining is still profitable, and that must go the way of the dodo before mining margins start to get properly squeezed, but if it continues to gain popularity margins will get wafer thin, and eventually the diff in global energy costs will define by geography who can mine profitably and who can't. My lecky costs in Ireland are double those in some US states for example.