[gweinberg]

I think the parent meant that miners have zero incentive to produce bitcoins if they can't sell them for at least the production costs. Even if they sunk a big pile of money into their mining rigs, if they can't sell the coins for the marginal cost of producing them, continuing to mine is just throwing good money after bad.

[saalweachter]

Yeah, the word for businessmen who sell goods at less than the cost to produce them is "bankrupt". I don't doubt more than a few miners have lost quite a bit of money selling below cost -- probably most without realizing it -- but I have to assume they have all been weeded out by now, given the notorious fierceness of the mining world. Selling BTC below cost might help stave off bankruptcy for one billing cycle, but on the next you'll be deeper in the hole than you were before.

[aaren]

If selling under cost makes the difference between being $10000 in debt and $1000 in debt then it matters. The latter is much easier to deal with on a personal level, because individuals tend to have support networks / savings.

I'm guessing here, but I think mining is currently on the level of individuals and not corporations.

[wmf]

I was talking more about depreciation of capex than marginal cost. Almost all ASIC owners are facing losses and some of them are inventing rationalizations like the idea that they can force the price up by not selling (even though the price cannot affect the mine vs. buy tradeoff).