[ssharp]

> Nobody will pay $1 for electricity to generate <$1 of bitcoin.

Hobbyist miners are convincing themselves that <$1 of Bitcoin will be worth >$1 the future. Major miners seem to have question business models as well, where they are either losing money or have something shady going on with their cost of electricity. BTC still seems to be very prone to pump-and-dump schemes, so major miners may be able to pump the price enough to sell their coins profitably before the next crash.

[IkmoIkmo]

No not really. If you believe $1 of X will be more than $1 in the future, you buy it for $1, you don't pay more than $1 for the manufacturing or mining of $1 of X, it makes no sense from a financial perspective, especially considered the time, effort and substantial risks in purchasing and running mining hardware.

The argument that you mine to hold to invest, while mining and selling right away is unprofitable, doesn't really hold when you can just buy and hold instead for cheaper and less hassle & risk.

The exception is of course when buying coin isn't an option, but buying electricity & hardware is. Which is why you may see shady operators mine above cost in China, because purchasing bitcoin in bulk in China can't be done easily anymore, a substantial premium cost.

But generally speaking, mining expenses approach mining revenues and top out there, as with virtually every other market. There are some caveats sure but they're not the rule.

Beyond that though, electricity isn't very relevant. At the end of the day if you have 1 million bitcoins, and the annual mining rewards are 50k bitcoins, the most coins that can be sold is 5%. Regardless of electricity prices, the new supply is 5%. Whether it ends up in the hands of miners or others, that's the inflation and the amount of downward pressure. It's true if electricity is expensive and margins are tight, miners sell more quickly. But in the long-run, the supply on the market is still averaging 5%, there's no magic way to go above that number. You could see miners sell 0% the first half of the year and then the entire 5% the second half of the year when margins are tight and miners sell to get cashflow, but it's still 5% a year, regardless of electricity prices.

So 5% is just a hypothetical number, but the reality is that by design it's set to go to 0%, again regardless of whether electricity is cheap or expensive. Which is why I contest the earlier statement by the guy I replied to that electricity prices is something to worry about.

[sanswork]

>No not really. If you believe $1 of X will be more than $1 in the future, you buy it for $1, you don't pay more than $1 for the manufacturing or mining of $1 of X

I know you read /r/bitcoin so I know you know that there are a lot of people who stupidly don't think about it that way even just in that subreddit. There are also a lot who think their tiny collection of miners is contributing to the hash rate and helping the network even if they are losing out.

Also with all the delays in shipping miners there are a lot of people mining with obsolete hardware just because they don't have to feel completely scammed so if they mine something they can convince themselves it was worth it.