I expect a continuous increase in mining difficulty, so mining costs will increase, supporting BTC price during the bullrun, while increasing the decentralization and safety of Bitcoin network.
Right till this point and this is were we stop, this part doesn't follow this route.
The subtle difference is first that the increase in difficulty is not an increase in costs, it's a decrease in revenue, my miners will pull the same electricity, I will pay the same bill, it's just that I'm receiving less coin for it. It might not sound as much but:
- I make $1 for every burned 50 cents, my power increases by 10%, I only make 45 cents.
- I make $1 for every burned 50 cents, my revenue goes down by 10% , I only make 40 cents
The better your profitability the harder you get hit, thus putting pressure on expanding, putting pressure on future increase, diminishing the probability of a difficulty rise.
Second, miners don't really influence the price, this is a sort of meme thing, and to be honest I would love to hear how we could do so because it's been 2 rough years and it's not just me , it's many others that would love to have this plan, unfortunately our mining costs don't determine the price, the price determines the hashrate, putting the brakes when the profitability evaporates not he other way around.
Now the third, this is the bad thing about it.
If the difficulty continues to build on as major farms are running on investors money and and afford to mine at a loss, I'm paying each bill out of my ow pocket, for me it's just stupid to pay 100 euros in electric bills to get 90 euros worth of bitcoin, I would just unplug the miners and buy BCT directly from an exchange. So bad times in profits will only kick out little guys, letting only big farms with big pockets survive and that's the total opposite of decentralization. You can see it even now, Foundry is a closed pool, you need 20 PH (that's 200 S19 and 600KW) to join , as well as being us based, and they control almost 30% of the hashrate.
Plus, it's manufacturers that kill individual miners.
Microbt released a 7000W miner, it wasn't enough that Bitmain got a 5500W one, those can't even run in a normal house, it will blow your breakers in the second you put them in, and this help again guys with access to datacenters and cheap electricity, as well as deep enough pockets to keep buying the latest most efficient model.
Unfortunately, ETF or no ETF, the decentralization in mining is starting to become an utopia!