Quote from: Puppet on May 04, 2014, 07:12:44 AM

Quote from: Brunic on May 04, 2014, 02:07:39 AM

Great discussion going on here, interesting to read.

Bitcoin mining is in a huge bubble right now. It's hard to get data to analyze that market, but how many $$$ have been injected in that market since 2012? Consider all the R&D, investments in mining business, and investments in ASIC manufacturers. I'm pretty sure the money injected in mining overshoot what the Bitcoin economy is able to support today.

Bitcoin mining can't go over what the Bitcoin economy is able to support. The better the Bitcoin economy is, the better it's network is going to be. Like any bubble, it usually ends with a crash. I think mining was temporarily saved by the Bitcoin bubble last November, but it can't grow like that eternally, not at that rate.

I'm pretty sure it's going to crash hard in the following months. The market has to correct itself, the sooner the better.

That doesnt make any sense. If people overinvested in mining, it isnt going to influence the exchange rate. Why would I sell my bitcoins lower because you (hypothetically) are out of a few tens of thousand dollars or dozens of bitcoins in unprofitable or undelivered mining gear? Getting screwed, whether its in BTC or fiat doesnt really influence btc rate. This is no different than when pirate's ponzi collapsed.

If there is an impact, it will be tiny, and probably work the other way. Those that bought these unprofitable miners may hoard their mined coins hoping to eventually break even if the price goes up. But considering how few coins are mined compared to how many are traded, its not going to make a big difference.

When mining centralizes sometime this year it will have an effect on BTC price since the consumer market for miners will be gone. Consumer circulation of Bitcoin to buy hardware is actually a large segment of the Bitcoin economy.

Miner manufacturers will be forced to tighten the margins on their hardware because they will be dealing with buyers that are looking for 100's or 1000's of miners as opposed to buyers looking for 10's of miners. Less profit again means less money being injected into the Bitcoin economy.

Once distributed mining becomes impossible this will generate a ton of FUD which again will affect the speculators.

So ya, centralized mining WILL have an effect on the price of Bitcoin...its just a matter of how much and for how long.