Correct me if I am wrong but I thought supply is "released" following a geometric series diminishing returns. It was my understanding that mining releases a set amount of bitcoins per time frame.
To put in simple terms no matter how many 10 or 100 machines mine, after 1 hour only x amount of coins will be mined and spread between either 10 or 100 machines, thus making supply spike impassible, is this not correct?
Pretty much yeah, I'm certainly not an expert but have been following things a bit more with recent developments.
Effectively the network tries to ensure that blocks are generated at a roughly constant rate (and each generated block grants a certain number of bitcoins)
This rate isn't adjusted immediately if new computing power comes online though, so you may get bitcoins being generated faster for a short period of time.
Over the longer term you will only gain if you increase your portion of computing power relative to whatever else is out there.
Basically this means that as soon as ASICs become commonplace then GPU based mining will pretty much be irrelevant as the difficultly of mining a block will increase in response to the increased hash generation capabilities so your GPU based system will have less and less ability to generate blocks.
IMO it's all looking a bit bubble like at the moment. I think if you extrapolate the gains over the last couple of weeks it works out to be millions of % on an annual basis, which certainly isn't sustainable and will likely only lead one way in the coming months.
