AlexGR
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December 22, 2015, 10:41:52 PM

We have no idea on the price direction. If BTC crashes to 10$, then subsidy and fees are already too low. If BTC goes to 45.000 a subsidy of a single coin will be like 100 current coins of 450$. USD prices are very relevant if a miner wants to pay their power bill, equipment, etc.

If the price goes down, profit from an attack will likely go down as well, and vice versa if price goes up. Correspondingly, the amount spent on security in currency should likewise go down, or up. The cost of "sufficient" security as percentage of market cap should remain roughly the same.

Does this make sense?

Kind of. But it depends on how the miner views the situation. Say you have a crash in price but the miners don't pull the plug because they believe this is a temporary situation that will be corrected in a few weeks, instead of taking current BTC price at face value. Ok, some will shut down because they are on a tight budget and can't afford to lose money but others are braver and then you see a slash of price by 90% and the hashrate dropping just 20-40%. It will take a very long time sitting at a very low price to reach a similar equilibrium.

And it's also the outlook of the situation not in terms of securing the network but "gaining coins". That's the miner's interest. As long as the monetary base is still being distributed, some people will get the coins anyway. Whether it is 100 miners or 10.000 miners, the coins will be there for the taking. For non miners, the ideal scenario is "the more hashpower, the better". For the miners, if it makes economic sense to pursue it, they will pursue it. Earlier in the thread some people suggested the network is oversecure etc etc. But in the end of the day what matters for the miner is if he is making profit. If he pays x for setting up and electricity and gets 2x from the coins he mines => it's worth it for him => so why not. The actual question at that point is not why the network may be at 400% more security than necessary, but why isn't it at 800% when miner costs are far lower than their profits and the market isn't self-adjusting fast enough (which is reasonable to a large degree, especially after the price moving a lot and the infrastructure not being adjusted at the same pace).