Quote from: Ray Anastasio on August 26, 2013, 03:21:43 AM

Why do so many people assume miners HAVE to sell bitcoins right away to "pay bills"?

Why not assume the have other resources and can horde?

That's likely due to the situation when mining was for GPUs and the Bitcoin revenues dropped to where they barely matched the increase in the electricity bill. There was a high level of whinging (e.g., October and November 2011) by those who felt they "got suckered" into buying hardware (which is kind of true, since much press from May, June and July 2011 touted how miners were making huge bank. These were not crypto-currency enthusiasts, they were techies who saw their friends getting "free hardware" and they jumped in -- oftentimes maxing out the credit card to do so. So many of them truly were selling most every coin they mined and used the proceeds for paying off the purchase of the hardware and for the electric bill. So then, of course, when difficulty rose it took more and more bitcoins, which collectively pushed the exchange rate lower ... incenting further spending, and spiraling on and on further down it went.

The miners who bought ASICs had to pay the cost up front so there's little additional cost to operating ASIC hardware yet (relative to BTCs earned), and thus more miners are today saving their coins than when comparing to 2011 when that sell-everything-you-earn behavior was prevalent.