Ethereum Price Plummets As Mining Difficulty Skyrockets

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rgMekanic

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It appears the Ethereum gold rush may be coming to and end. As the price skyrocketed from $8.22 at the end of 2016, to it's peak of over $380 in June many people started investing in mining rigs. While Ethereum is in no way dead, the cryptocurrency has dropped over 28% in value over the last week, as the influx of mining rigs coming online has caused the difficulty to jump from less than 200 THash/s in March, to over 1000 THash/s July 2nd. This week, the Ethereum network was hit with the largest difficulty increase in its history. The difficulty rating jumped from 1.066 PHashps to 1.228 PHashps in less than 48 hours.

I didn't jump on the Ethereum bandwagon, although I wish I would have when I was looking into it back in March. On the upside we may see a flood of used GPUs hitting the market soon, as well as pricing coming back to normal for new cards. I wonder how manufacturers feel about all the mining specific motherboards and graphics cards they've been launching recently.
 
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Yeah, i've been mining a long time now and sold all my AMD stuff in the madness a few weeks ago, got lucky and bought a couple dozen more nvidia cards before they got scarce. I dont mine eth anymore but there is still money to be made if you power costs are decent and you are smart with your rigs. I think we will see a lot of smaller guys getting out and dumping hardware soon enough.
I do it as a hobby and longer term investment, and i find it fun. Research some alt's and join the party, just treat it like you would entertainment money, dont go spending your rent on a mining rig thinking you are gonna make a living on it overnight.
Anyway, yep, ill be ready to buy some discounted hardware in the coming dump!
 
Perfect timing .. few days ago my doctor was asking me my thoughts on Ethereum as an investment, I told him to hold off because all of the subcoins tend to have their rush period (the GFX card mining craze) before hitting the difficulty wall. Now with the difficulty, the horde will jump to another coin.

The real investment potential is identifying the next coin that will pick up this cycle. Litecoin, Dogecoin, Ethereum .. I'm sure there's been more.
 
Why would they sell their cards when alt coin mining can be done? We'll probably see some cards hit the market, but not what most are expecting.
 
Riccochet said:
Why would they sell their cards when alt coin mining can be done? We'll probably see some cards hit the market, but not what most are expecting.
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In addition, the mining guys are itching to buy the cards of the part-timers at big discounts too, so expect to still have a shortage. I was selling a 1070 last week and had someone offer me 150 quid. No doubt some numpty out there would accept. I told him to foxtrot-oscar
 
MrAhlefeld said:
Ahhh you'r that goddamn locknessmonster

No ETH mining for me, diff to high. Bought some @ 40$ a pop months ago though
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Good eye...you hanging on to them for awhile yet?

In June I started farming drive space with Storj, not as a way to get rich but I think the idea has merit and it might go somewhere - plus I already have a Plex server running 24/7 with some space free so why not?
 
I don't understand why difficulty to mine going up makes the price cheaper instead of more expensive. You'll have less dilution going forwards.
 
Spidey329 said:
The real investment potential is identifying the next coin that will pick up this cycle. Litecoin, Dogecoin, Ethereum .. I'm sure there's been more.
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That's not investment, that's gambling. All of this coin stuff is speculative betting. Investing is when you evaluate a company, technology, commodity, etc for the fundamentals, decide they are solid, and put money in to develop it so that you can reap long term benefits. This is all just gambling. It is hoping you can get on the upswing of the Next Big Thing(tm) and get out before the downswing. That's fine, if you want to play that game, people do all the time on thinly traded stocks and shit. Just don't kid yourself in to thinking it is a sound investment and make damn sure you are playing with money you can afford to lose.
 
EODetroit said:
I don't understand why difficulty to mine going up makes the price cheaper instead of more expensive. You'll have less dilution going forwards.
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Difficulty increase does not make the price cheaper. Difficulty, on eth, has gone up because of a difficulty bomb and an exponential increase in miners.

Price dropped from ICO's dumping coins, speculative trading, new traders, fear of the upcoming fork, and a bunch of other factors. That you need to read up on if you are thinking of investing.
 
buzzbomb said:
Good eye...you hanging on to them for awhile yet?

In June I started farming drive space with Storj, not as a way to get rich but I think the idea has merit and it might go somewhere - plus I already have a Plex server running 24/7 with some space free so why not?
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I have a pretty big SAN (about 11TB) that I used to use for my VM lab that's doing pretty much nothing now. I wouldn't mind looking into this. Plus power usage wouldn't creep up as it's always on anyway. How much do you make on that? Is it worth it?
 
buzzbomb said:
Good eye...you hanging on to them for awhile yet?

In June I started farming drive space with Storj, not as a way to get rich but I think the idea has merit and it might go somewhere - plus I already have a Plex server running 24/7 with some space free so why not?
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Yup.. hanging on to them and more =)
 
I bought a mining contract on Eth a couple years back, not very much unfortunately. Sitting on about a dozen, but I would have been better off just buying Eth on the open market instead of mining it (by about 3x). :( Was my first toe dip into crypto, still nearly a 10x increase in value, well worth it, but 30x would have been better!
 
That doesn't make sense, when difficult rises, so should prices as they become harder to acquire. There are other things at play.

Eventually Ethereum will go back up
 
Shows you how much of bitcoin markets just is sucking eachother off. As soon as it becomes hard to farm coins, large portions jump ship and money exits the market, these really aren't currency they act like shitty commodities markets except without intrinsic value.
 
davethehedgehog said:
I have a pretty big SAN (about 11TB) that I used to use for my VM lab that's doing pretty much nothing now. I wouldn't mind looking into this. Plus power usage wouldn't creep up as it's always on anyway. How much do you make on that? Is it worth it?
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TwistedAegis said:
I bought a mining contract on Eth a couple years back, not very much unfortunately. Sitting on about a dozen, but I would have been better off just buying Eth on the open market instead of mining it (by about 3x). :( Was my first toe dip into crypto, still nearly a 10x increase in value, well worth it, but 30x would have been better!
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Wait a minute!

When did storage space translate into a better mining environment? I thought it was all about graphic cards and their better ability to do complex math. If it was a storage space determinate, why wouldnt the tech market see a increase in valuation of ssd's and harddrives instead of graphic cards? I wonder if the picture is a bit unclear as to what is needed to successfully mine.

Is it storage space or is it computational power? Both? What equipment should a miner spend his money on? The shovels to get the valuable elements out. Or the ore cars to store the elements?

Just wondering since I never came across storage space as being a necessary requirement.
 
Most coins require computational power to mine them using Proof-of-work algorithms. There's a new trend moving towards Proof-of-Stake algorithms, which require that the miners actually hold the coin they're mining, but require almost no computational power. There are a couple now that only require storage space using Proof-of-Capacity algorithms.
 
Khahhblaab said:
Wait a minute!

When did storage space translate into a better mining environment? I thought it was all about graphic cards and their better ability to do complex math. If it was a storage space determinate, why wouldnt the tech market see a increase in valuation of ssd's and harddrives instead of graphic cards? I wonder if the picture is a bit unclear as to what is needed to successfully mine.

Is it storage space or is it computational power? Both? What equipment should a miner spend his money on? The shovels to get the valuable elements out. Or the ore cars to store the elements?

Just wondering since I never came across storage space as being a necessary requirement.
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depends on the coin. Burst is a hdd minable currency. ethereum is GPUS. and Bitcoin is ASIC. Etherum is by far more profitable then burst.
 
aokman said:
That doesn't make sense, when difficult rises, so should prices as they become harder to acquire. There are other things at play.

Eventually Ethereum will go back up
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The same amount of coins are minted per
block, there isnt any shortage of coins to drive the price up. It just takes more computational power to solve those blocks. The only thing at play is a crazy overinflated price bubble bursting. Difficulty doesnt affect price in the way that youre thinking.
 
I wonder what crypto currency NVIDIA and/or AMD will develop (or fund development of through shell corporations) as the next mining craze.
Frankly, if these graphics card companies are smart, they will hire crypto currency experts to create ever more crypto currencies. They should have at least 5 different new unreleased crypto currencies on hand with slight variations in their functionality and transaction methodologies at any given time. In this way, they can always be ready to roll out the next crypto currency for a graphics card powered, mining crazed public to jump onto.

This is truly the Tulip Mania of the early 21st century, but NVIDIA and AMD are set to make huge permanent gains from it without any real downside as long as they can surreptitiously continue having new crypto currencies become available for the public at large to mine when the last favorite mining currency gets too hard to continue.

--The preceeding text is only my cynical opinion and should not be considered as a statement of fact.
 
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the main thing here is the prices are dropping because of the bitcoin august 1st thing, either going segwit or something else to address the transaction slowdown etc. People are scared because it could possibly mean a split, when bitcoin going down, everything else goes down in price. after august 1st, i expect prices to go back up as long as there is no split and the implementation goes off without a hitch. either way the price will go up just how much.
 
dinmaster613 said:
the main thing here is the prices are dropping because of the bitcoin august 1st thing, either going segwit or something else to address the transaction slowdown etc. People are scared because it could possibly mean a split, when bitcoin going down, everything else goes down in price. after august 1st, i expect prices to go back up as long as there is no split and the implementation goes off without a hitch. either way the price will go up just how much.
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I would guess that you'll get a small spike then you'll continue the downward trend for a while. The prices are too high right now and the market is due for a severe correction. Its happened many times before i dont see any reason why it would be different this time. Until bitcoin has more mainstream uses and the marketcap is high enough to prevent these violents swings the cycle will repeat.
 
Saw that comming a 10 miles away. Had a heated talk with someone on etherum forums and he kept going on and on its not going to happen. He not too happy now after I told him so.
 
Wolf_Tech said:
Saw that comming a 10 miles away. Had a heated talk with someone on etherum forums and he kept going on and on its not going to happen. He not too happy now after I told him so.
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It's not like there's no history to back you up.
 
CVNet1 said:
I wonder what crypto currency NVIDIA and/or AMD will develop (or fund development of through shell corporations) as the next mining craze.
Frankly, if these graphics card companies are smart, they will hire crypto currency experts to create ever more crypto currencies. They should have at least 5 different new unreleased crypto currencies on hand with slight variations in their functionality and transaction methodologies at any given time. In this way, they can always be ready to roll out the next crypto currency for a graphics card powered, mining crazed public to jump onto.
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I don't think you understand how crypto currency works.
 
I hope the whole mining industry blows up.
GPU prices are ridiculous even if you can find one. Damn GPU scalpers are the worst.
 
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