Honestly, I think home miners should only mine as a hedge against bitcoin price stagnation, which could theoretically lead to difficulty stagnation. If you are long on bitcoin, have a sort of 15% mining operation.
Lets say you buy 10 BTC. Maybe it would behoove you to buy 2 Antminer S3's. If the difficulty skyrockets beyond profitability too quickly, then it would be probably safe to assume that the bitcoin price would have reflected upward momentum to account for the increased difficulty.
Again this is in a perfect world and we all know miners aren't rational. But in the event of a +20% btc price, you would see a lot of old miners turn back on, and other companies roll out batches to gain hashpower. At this point I can see maybe the difficulty doubling at the current BTC price.... anything beyond that and I'd start to worry.
Lets say you buy 10 BTC. Maybe it would behoove you to buy 2 Antminer S3's. If the difficulty skyrockets beyond profitability too quickly, then it would be probably safe to assume that the bitcoin price would have reflected upward momentum to account for the increased difficulty.
Again this is in a perfect world and we all know miners aren't rational. But in the event of a +20% btc price, you would see a lot of old miners turn back on, and other companies roll out batches to gain hashpower. At this point I can see maybe the difficulty doubling at the current BTC price.... anything beyond that and I'd start to worry.
The home user obviously can't mine if difficulty goes up but the fiat price doesn't - they can't get BTC ROI currently and then they may not even get fiat ROI.
The mining manufacturers, on the other hand, who can sell the miners for 5x their cost - they can still make miners for themselves and mine until the difficulty is 5x higher. So we know who is adding the the network...all those private farms we subsidized
^^^^ This - we were literally just discussing that here... CoinTerra rolling out 11 MegaWatt farms after we purchase a huge amount of hardware from them left a pretty bad taste in our mouth. Just saying... thanks for selling it to us at retail (when we inspected the insides of the machines) which were pretty rigorously protected (even as far as seals) showed some of the patch work that went into the machines.
So essentially as she correctly wrote... we literally purchased 2nd hand hardware at full retail while they mine with better equipment before they sell it on to us... >:|
Killed our industrial sized mining operation - rather than roll over and die we chose to move to a more feasible location and try to recoup whatever investments we can.