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See, I had a different thought here. If anything, mining new bitcoins reduces the value of current ones. Correct me if I'm wrong, but what's keeping the bubble

See, I had a different thought here. If anything, mining new bitcoins reduces the value of current ones. Correct me if I'm wrong, but what's keeping the bubble from bursting is more dollars coming in - big miners aren't doing that, they don't buy their BTC. Unlike a clueless average Joe at home, they're running huge businesses, as this article suggests, so they're probably smarter. Does anyone know what the math here is? I'm assuming a) they aren't cashing out too much/too regularly because they're huge and this would drop the price too much and b) they aren't stupid to make huge investments like this, just hoping all would be well. Where am I wrong? Is the number of fresh "investors" still big enough for all of them to have a steady cashflow? Do they believe they can get out before everyone else? Are they just like all other believers, but with deeper pockets?

legulere 9y ago
Big buyers/sellers can influence the price and the price irrationally influences buyers.
CydeWeys 9y ago
The thing that you're missing is that Bitcoin mining has a fixed reward schedule that is independent from the number of miners. If you have more miners, that just means that each miner is yielding less Bitcoin (this is accomplished by scaling the difficulty level, which is currently 1,590,896,927,258X what it was when Bitcoin was released in 2009). The result is that the only factor that affects whether someone chooses to engage is mining is if it is profitable.
totalZero 9y ago
Mining new bitcoins makes transaction easier, which improves liquidity of current bitcoins. That certainly should have a positive effect on the theoretical value of a bitcoin.
- contrarian_ 9y ago
  > Mining new bitcoins makes transaction easier No. As long as at least one person is brute forcing hashes, transactions will be processed at the same rate of about 10 tx/s.
elorant 9y ago
They probably think Bitcoin has a long way to go. I've talked to people who think it could reach 100k one day. I hope this whole shenanigan ends sooner than later because now not only we have to pay higher prices for RAM due to smartphones but we also can't find a decent video card below $200. Fuck that shit.

legulere 9y ago

Big buyers/sellers can influence the price and the price irrationally influences buyers.

CydeWeys 9y ago

The thing that you're missing is that Bitcoin mining has a fixed reward schedule that is independent from the number of miners. If you have more miners, that just means that each miner is yielding less Bitcoin (this is accomplished by scaling the difficulty level, which is currently 1,590,896,927,258X what it was when Bitcoin was released in 2009). The result is that the only factor that affects whether someone chooses to engage is mining is if it is profitable.

totalZero 9y ago

Mining new bitcoins makes transaction easier, which improves liquidity of current bitcoins. That certainly should have a positive effect on the theoretical value of a bitcoin.

contrarian_ 9y ago
> Mining new bitcoins makes transaction easier No. As long as at least one person is brute forcing hashes, transactions will be processed at the same rate of about 10 tx/s.

elorant 9y ago

They probably think Bitcoin has a long way to go. I've talked to people who think it could reach 100k one day. I hope this whole shenanigan ends sooner than later because now not only we have to pay higher prices for RAM due to smartphones but we also can't find a decent video card below $200. Fuck that shit.