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.

No offense, but I think there is a miscommunication here. Maybe my first post wasn't clear. Wink

Bitcoin mining market and Bitcoin market are two different things. I think the Bitcoin mining market went on a bubble, too much money was entering the mining market compared to its actual value. The mining market cap is dependent on the Bitcoin market. You can't have a better infrastructure than your own economy.

It's the Bitcoin mining market that is going to crash, not the Bitcoin economy.