What happens to the price when only people with 500Ghash/sec+ can make coins next month?
Early adopters are rightfully getting a nice reward now, but how do you get "fresh blood" when the difficulty is off the chart unless you have several thousand dollars in hardware?
wat. The important figures for miners are the btc/usd conversion rate, the network difficulty, your hash rate itself, how much you initially paid for your rig ($/Gh) and how much power you're drawing ($/watt). All of these factors are important, but what will dominate over the coming months is power cost. Someone mining a 100 GH/s rig will make 5 times less BTC per day as someone mining a 500 GH/s rig, it's true, but if the 500 GH/s is sucking up proportionally more than 5 times the electricity then it can be better to mine with the lower hash rate. If the conversion rate improves that delays the period where electricity costs outweighs the income. For the difficulty to rise another order of magnitude (which would make BFL 60 GH/s Singles worthless), there needs to be about another 30 PH added to the network -- where's that coming from in only a month? In any case, people dropping their rigs because they're too power hungry may cause the difficulty to go down and make it worthwhile again for some who live in low-electricity-cost areas... There are variables you're not taking into account, hence the wat.
Anyone with MH/s-level farms from GPUs have turned them off months ago (or moved to Litecoin). There's some new 28nm ASICs that use less power per hash than the larger nm ASICs, so eventually those will face the same fate as GPUs from power costs (not so much from hash rate -- there are only a few TH machines on the near horizon), but the next 30-60 days isn't enough time to make that happen.
Isn't Litecoin's value more or less pegged to BTC? I did a quick calculation with one of the online calculators [1] and it seems that it's a challenge to turn a profit from Litecoin GPU mining too.
It's hard to make a profit with litecoin, but a single 7950 can still make you around USD $1/day right now after electricity costs. I have a friend who started mining with 4 of them when summer began, they (and the motherboard, power supply, etc. he used for his setup) ROI'd a while ago. I don't know if it makes sense to buy new GPUs anymore... But at least if it does become unprofitable for all but those who have the best GPUs on the market in the cheapest electricity areas (or even for everyone in the event that litecoin dies completely), you still have very excellent gaming GPUs you can resell at a good price to people on Craigslist/ebay. With the "next gen" of consoles that have just come out being so under-powered, a gamer can expect a 7950 or better to handle any PC ports that come out of this gen...
Difficulty does not affect the price at all. Bitcoins are produced at a more-or-less stable rate regardless of the amount of mining competition.
In fact, before hashrate was that high a lot of investors' money was going into mining, not to exchanges (30% growth every 10 days over the last 6-7 months). As mining becomes more and more competitive, less money will go there and more to BTC holders, thus moving the price drastically.
If Bitcoin is only about mining then it deserves to die. If Bitcoin wants to be an actual currency then it should be able to work like any other currency where you can't print money.
You cannot make bitcoins with a shitty CPU, or a shitty GPU. You can try, but the difficulty is too high, and is always increasing.
If this is a new concept to you, imagine:
When I first received my BFL Jalapeno (ASIC 5G mining rig) and started mining, to the time I sold it, the difficulty had increased enough that I was seeing a .05 BTC gain in twice the time. So now you can imagine how eventually only people above a certain mining speed will be profitable.
At the next difficulty estimate, an i7 with free electricity mining all the time at 8 MH/s would make about 9 US cents in a month. Since the difficulty will probably go up again in less than two weeks, make that less than 2 US cents per week. Since very few people actually have free electricity it's not worth it.
Okay, in the hypothetical world where 1 satoshi is worth some huge amount of USD more than it presently is, if you suck up the electricity cost now (which I believe would be less than $1 USD per day for an i7) you can get a few satoshi that may one day make that up-front cost worth it...
Whether you can actually get a single satoshi from a pool is another story. If the pool uses PPLNS, you might not ever. I think most would object to you for being misleading. If you want bitcoins, buy them, or get an ASIC miner and don't use a sucky-ass CPU or GPU.
By the calculations above, you would be far, far better off just buying Bitcoins on an exchange than you would be mining them with non-free electricity.
Early adopters are rightfully getting a nice reward now, but how do you get "fresh blood" when the difficulty is off the chart unless you have several thousand dollars in hardware?