I am surprised it took this long, but here’s news on Bitcoin mining costs: Want to Mine Bitcoin in New York? You’ll Have to Pay a Premium.
The New York Public Service Commission on Thursday cleared the New York Municipal Power Agency to raise electricity bills for cryptominers seeking to take advantage of the state’s low-cost hydroelectric power. The agency is made up of 36 municipal power authorities in the state. In some cases, the miners — which require huge amounts of electricity for data processing — accounted for a third of a municipal utility’s demand, the commission said.
“If we hadn’t acted, existing residential and commercial customers in upstate communities served by a municipal power authority would see sharp increases in their utility bills,” Commission Chair John Rhodes said in a statement
Bitcoin Death Cross?
In unrelated news, Bitcoin’s ‘Death Cross’ Looms as Strategist Eyes $2,800 Level.
Bitcoin’s 50-day moving average has dropped to the closest proximity to its 200-day moving average in nine months. Crossing below that level — something it hasn’t done since 2015 — signals fresh weakness to come for technical traders who would dub such a move a “death cross.” Another moving-average indicator of momentum has already turned bearish.
“There’s been a definitive shift over the past couple of months after the bubble activity at the end of 2017,” said Paul Day, a technical analyst and head of futures and options at Market Securities Dubai Ltd.
The strategist studied the virtual currency’s 2013 tumble for clues on how it may act this time round. His conclusion? Gear up for a 76 percent tumble from late February highs, which would take Bitcoin to a paltry $2,800, if the downtrend is repeated.
Another gauge that suggests weakness is the moving average convergence-divergence indicator, which measures price momentum to flash buy and sell signals.
In regards to the “Death Cross”, I pay little attention. Then again, I fail to see why Bitcoin is worth much of anything. But bubbles are bubbles. That’s how bubbles work.
In regards to extra charges, it is absurd that Bitcoin is draining public utilities. It’s a seriously flawed design. And the party ends when it costs more to mine a bitcoin than the Bitcoin is worth. Right now that price is about $2,500, I am told.
Some believe that can’t happen. I believe it will.
Peek Inside a Mining Operation
Please see Peeking Inside an Actual Bitcoin Mine.
Also consider Crypto Mining Stresses Electrical Grid in One Washington State County.
Finally, think of all the stress on the electrical grid if Bitcoin hits those inane $1,000,000 price targets. How much competition and grid stress will there be for $1,000,000 coins.
Idiot’s Game
Bitcoin is an idiot’s game at this point. The Bitcoin Fad is Fading Fast.
Mike “Mish” Shedlock
Very likely although it is possible that it evolves to become a better protocol over time. Much as etherium has implemented lots of new features making it a stronger competitor over time
Only the least efficient miners can’t make money, they drop out and there share of the mining rewards are then realocate to the more efficient mining operations
No, adjusting difficulty ensures that the number of coins created is always in line with what the designer of bitcoin predicted regardless of how many miners are present in the system
People lose interest every time it crashes and it has a major crash once a year and 3 or four minor crashes a year . Anyone who has held for a year or two knows this
NY has its reasons while other regions will see the economic advantage of providing cheap electricity to attract bitcoin miners. Bitcoin mining will provide tax revenue. For the time being mining activity adds more Bitcoin (money velocity) to the system. The crypto digital float will increase and decrease according to economic activity unlike the Central Bank fiat system which inflates the base when it wants more economic activity. Bitcoin isn’t money it’s electronic barter, and so has the potential to translate goods and services anywhere.Right now a worker in China gets a lot less than the same worker in the US. Strip away the BIS, Fx markets, rentier class global bankers and stock holders who get rich by borrowing money to speculate on paper gains leverage on the disparity. This iteration may or may not survive but the technology is here.
” for the 20,000 time the technology and the coin are not the same thing”.
Many crypto haters like to conflate the technology with an individual coin. Even crypto supporters will generalize using Bitcoin as an eponym for the crypto/blockchain world. If you understand the technology is going revolutionize business, why are 99% of your post on the subject negative? Why don’t you focus on Archie (original Web search engine) or Diners Club as the end all for search engines and credit cards?
The bottom line is the technology will continue to improve and grow because of the added value, which is why smart people and businesses continue to invest – https://www.coindesk.com/mit-founded-startup-raises-20-million-for-supply-chain-blockchain/.
The fact that NY wants to tax anything that moves is certainly not a surprise. Yet, you lead with it like it’s a sign that crypto mining is a lost cause. Good grief, miners have moved to places with cheaper energy, like Iceland; and places like AZ, WY, and PR are passing laws to make it easier for crypto businesses. Besides, over the coming years new energy sources will reduce the cost of mining (validating transactions). So, this story is a total non-story, and Bitcoin will make another new high this year, as global participation goes from 3% to over 10%.
Seb, isn’t adjusting the difficulty confirming it’s all a sham? It now sounds like it’s in its death throes.
Mish- Are you short bitcoin then? I am certain it will be below $1,000 within five years. But I just can’t bring myself to short it. Too much stress.
If the difficulty drops that low people will go back to mining on home computers. It’s not going away. Bear markets are allowed in crypto. Not so much for stock or bond markets. How long has gold sat around it’s same price? Not worried in the least.
Lastly, it you can’t make money mining, and miners drop out, who is going to do hashing?
“And the party ends when it costs more to mine a bitcoin than the Bitcoin is worth.”
Which, in any competitive market, from grain farming to gold mining, is exactly how anticipated cost of production and anticipated sales price is always related.
The only “markets” where this does not hold true, are those where select groups of more equals, are given privileged access to produce and sell something by fiat. At the point of a lot of asymmetrically big guns.
Over time, the necessity in the former scenario to constantly improve efficiency; or go out of business as soon as someone else can produce, hence sell, products for below your cost of production; leads to technological improvements that prove useful across other parts of the economy as well.
While in the latter scenario, the privileged can comfortably sit back and rake in without innovating nor improving one lick; safe in the knowledge that the government will underwrite the extractive rent they are due on account of nothing more than their membership in the privileged classes. Look at innovation rates in Bitcoin space compared to in printing-Washington’s-head-on-paper space over the past decade for an illustration. Or, at US vs Soviet retailing (or any other) efficiency in the Walmart era.
Don’t need Bitcoin to buy weed in Canada. Speaking of weed utilities don’t like illegal grow ops either.
80% of the bitcoins have already been mined. The difficulty of mining the last 20% is water under the bridge. Bitcoin will crash. Bitcoin will not go away. I need it to buy weed.
This video explains why you should not buy bitcoin https://www.youtube.com/watch?v=XbZ8zDpX2Mg
So the number of bitcoins produced will decline over time due to the mining reward deminishing. The number of miners require to mine the coins is variable. Bitcoin adjusts the difficulty or how much computing power is required to mine coins every two weeks. The difficulty is adjusted so that the mining reward stays at the predicted level regardless of the number of computers mining Bitcoins. As the mining reward is deminishing over time miners will receive a smaller mining reward , but they also receive a small transaction fee for processing transactions . Over time the mining rewards will drop and the transaction fees should rise. This will happen regardless of how many computers are mining . Each miner should with equal hardware get a equal slice of the pie. Too many miners will drive the least efficient miners out of business. Too few miners will increase miner profitably encouraging new miners to come on line . Miners effiency is based on electricity cost and hardware efficiency.
Easy jump on a bitcoin exchange like bitfinex, or bitmex both can be used to short. Also if you have big pockets you can short use futures through a brokerage account. Lots of options to short or hedge bitcoins
If the price of Bitcoin drops to $2000 (below the cost of mining), then Bitcoin can weaken the difficulty so that does not happen? The limiting factor would then seem to be how much people are willing to pay for electricity, or governments are willing to let Bitcoin suck up energy. Comments?
Why will it? The algorithm mines fewer and fewer coins over time until supposedly there are no more. The math by design must become harder and harder.
Finally, if you think anything I say or do affects the price, you are only nuts
BTW – for the 20,000 time the technology and the coin are not the same thing
Buy more – go all in – some had – The clever ones did LONG ago. They are now cashing out to idiots
An article on marketwatch claims that the average in the US is $4758 https://www.marketwatch.com/story/heres-how-much-it-costs-to-mine-a-single-bitcoin-in-your-country-2018-03-06
Please keep spreading the FUD. I would love to pick it up at lower prices. BTW, what’s the alternative when the current debt-based system implodes? Why are IBM, MSFT, states, countries, etc investing so much in blockchain-based technologies? You remind me of establishment candidates that must rely on ignorance and beliefs to sell their message. Fortunately, the invisible hand driving the anti-establishment, decentralized trend could give two sh*ts about beliefs and biases.
But how can you make money shorting this? $2500 is insane, maybe $250.