Author: Tier Nolan 2016-03-02 18:07:41
Published on: 2016-03-02T18:07:41+00:00
Theoretical possibility of 100% miners shutting off their hardware is discussed in a bitcoin-dev conversation. The revenue halves but not the profit, so it depends on how much costs are sunk and how much are marginal. If hashing costs are 50% capital and 50% marginal, then the network can absorb a 50% drop in subsidy; cost of loan represents half the cost. A business will spend less on capital since this drop in revenue is anticipated, meaning fewer mining hardware. For instance, a 6 months investment with 3 months on high subsidy and 3 months on low subsidy would not be made if it generated massive losses for the 2nd period of 3 months. It needs to make large profits during the first period to compensate for the losses in the 2nd period.
Updated on: 2023-06-11T04:16:16.499612+00:00