Quote from: Puppet on May 04, 2014, 04:13:22 PM

Quote from: pjviitas on May 04, 2014, 04:00:25 PM

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.

I doubt that. First of all, hardware manufacturers seem to instantly convert bitcoins to dollars, for obvious reasons (its not like TSMC accepts bitcoins). And do miners purchase coins to buy their gear with? Highly doubtful, since most hardware manufactures take dollars too, so I suspect almost all bitcoin purchases would be from existing stashes, so the net effect of mining hardware business, if any, is most likely that more bitcoins are being sold on exchanges, not the other way round.

As for what will happen once mining becomes a large enterprise thing; there is no way to know whether or not these companies will liquidate everything they mine, or assemble a bitcoin stash. My guess is most will do a bit of both, it doesnt seem likely you invest millions in a large mine if you do no believe in the long term prospects of bitcoin.

As for current small miners that will no longer be buying hardware; that could also mean they have more funds available to invest in bitcoins, something thats likely a better investment than mining gear anyway. Either way, the impact of mining on the BTC exchange rate is generally grossly overstated. There are nearly 13 million bitcoins. Each day, only ~3600 are mined. In two years, only half that.

Your assuming that BTC is a good investment...I think the jury is still out on that.