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All those new ASIC miners coming online? The difficulty jump over the last month is intense: http://bitcoindifficulty.com http://bitcoindifficulty.com edit: T

by Fuzzwah 13y ago

All those new ASIC miners coming online? The difficulty jump over the last month is intense: http://bitcoindifficulty.com http://bitcoindifficulty.com edit: This is a pretty good quick wrap up of what I think is going on here: http://chralash.wordpress.com/2013/09/17/the-new-pseudo-bubble-bitcoin-mining/ http://chralash.wordpress.com/2013/09/17/the-new-pseudo-bubb...

astrodust 13y ago
If anything that should drive down prices.
- eterm 13y ago
  Why? It's now harder and harder for the average person to get hold of a bitcoin. That fewer, richer people are now spending money to get more bitcoins isn't going to reduce the price if those players aren't liquidating their bitcoins.
  - paulhodge 13y ago
    For "average" users, mining has been prohibitively difficult for a while now. CPU mining has been worthless for years. GPU mining has also been mostly worthless, unless you picked (or happened to already have) one of the few cards that perform well. So anyway, I think we're at a point where the mining difficulty has little impact on the price. Newcomers are going to buy coins, not mine them.
simplemath 13y ago
I personally think critical mass has been reached, and unless someone actually cracks the protocol (which I seriously doubt) and brings down the txn network, BTC is here to stay. Quibbling about the current valuation misses the point. The secure transfer mechanism is the real value, and is not getting shoved back in the bag. Bet long on BTC and I doubt very highly you'll regret it, even if you get in at 200US and lose over the next few months.
- TylerE 13y ago
  That's what the btc crowd has said every time it bubbles How about you guys go 12 months without losing 25%+ of value in a single day before you start talking about being "here to stay".
  - simplemath 13y ago
    Again if you're looking at BTC as e-gold you're missing the point. The value is the txn network and that isn't going away. Price volatility is irrelevant to the long term value of it as a transaction vector of last resort for a huge number of applications.
    - betterunix 13y ago
      I would not have so much confidence in a system that, in your own words, is a last resort.
      - simplemath 13y ago
        Last resort on a global scale is still a gigantic market.
  - Fuzzwah 13y ago
    I'd say it is here to stay: http://bitcoincharts.com/charts/mtgoxUSD#rg360ztgTzm1g10zm2g25 http://bitcoincharts.com/charts/mtgoxUSD#rg360ztgTzm1g10zm2g...
    - TylerE 13y ago
      That looks very similar to this one: http://www.ecotao.com/holism/add/enron/Enron_whole.jpg http://www.ecotao.com/holism/add/enron/Enron_whole.jpg If you look at it up to about end-of-year 2000.
      - meowface 13y ago
saalweachter 13y ago
What I always find very interesting is that we had a difficulty jump of ~40% in the last few days, closely followed by a (so far) ~40% increase in price. Is it crazy to think that BTC are largely supply-bound, and BTC miners have just upped the price to the new barely-profitable level?
- VaucGiaps 13y ago
  You can't just 'up' a price.
  - saalweachter 13y ago
    You can most certainly up your price. The only question is how the market responds. Miners have zero incentive to sell their bitcoins for less than the cost of producing them. Left to themselves, the price should approach the minimum cost of producing bitcoins (since they do have incentive to undercut each other as much as possible). Speculators could respond to a price increase by miners by dumping their inventory on the market somewhere between the old break-even mining price and the new break-even mining price, undercutting the miners and lowering the price. This would go on until either the speculators exhausted their supply of cheap bitcoins, or the miners were all driven out of business. The real question is how the supply of the miners compares to the supply of the (active) speculators. If the miners are the principal supply of new bitcoins, and speculators are by and large just holding their bitcoins until some future time when the price is even higher, then the miners could totally up the global price by upping their own prices.
    - wmf 13y ago
      Miners have zero incentive to sell their bitcoins for less than the cost of producing them. Unless bills are due and the credit card is already maxed out.
      - gweinberg 13y ago
        I think the parent meant that miners have zero incentive to produce bitcoins if they can't sell them for at least the production costs. Even if they sunk a big pile of money into their mining rigs, if they can't sell the coins for the marginal cost of producing them, continuing to mine is just throwing good money after bad.

by Fuzzwah 13y ago

astrodust 13y ago

If anything that should drive down prices.

eterm 13y ago
Why? It's now harder and harder for the average person to get hold of a bitcoin. That fewer, richer people are now spending money to get more bitcoins isn't going to reduce the price if those players aren't liquidating their bitcoins.
- paulhodge 13y ago
  For "average" users, mining has been prohibitively difficult for a while now. CPU mining has been worthless for years. GPU mining has also been mostly worthless, unless you picked (or happened to already have) one of the few cards that perform well. So anyway, I think we're at a point where the mining difficulty has little impact on the price. Newcomers are going to buy coins, not mine them.

simplemath 13y ago

I personally think critical mass has been reached, and unless someone actually cracks the protocol (which I seriously doubt) and brings down the txn network, BTC is here to stay. Quibbling about the current valuation misses the point. The secure transfer mechanism is the real value, and is not getting shoved back in the bag. Bet long on BTC and I doubt very highly you'll regret it, even if you get in at 200US and lose over the next few months.

TylerE 13y ago
That's what the btc crowd has said every time it bubbles How about you guys go 12 months without losing 25%+ of value in a single day before you start talking about being "here to stay".
- simplemath 13y ago
  Again if you're looking at BTC as e-gold you're missing the point. The value is the txn network and that isn't going away. Price volatility is irrelevant to the long term value of it as a transaction vector of last resort for a huge number of applications.
  - betterunix 13y ago
    I would not have so much confidence in a system that, in your own words, is a last resort.
    - simplemath 13y ago
      Last resort on a global scale is still a gigantic market.
- Fuzzwah 13y ago
  I'd say it is here to stay: http://bitcoincharts.com/charts/mtgoxUSD#rg360ztgTzm1g10zm2g25 http://bitcoincharts.com/charts/mtgoxUSD#rg360ztgTzm1g10zm2g...
  - TylerE 13y ago
    That looks very similar to this one: http://www.ecotao.com/holism/add/enron/Enron_whole.jpg http://www.ecotao.com/holism/add/enron/Enron_whole.jpg If you look at it up to about end-of-year 2000.
    - meowface 13y ago

saalweachter 13y ago

What I always find very interesting is that we had a difficulty jump of ~40% in the last few days, closely followed by a (so far) ~40% increase in price. Is it crazy to think that BTC are largely supply-bound, and BTC miners have just upped the price to the new barely-profitable level?

VaucGiaps 13y ago
You can't just 'up' a price.
- saalweachter 13y ago
  You can most certainly up your price. The only question is how the market responds. Miners have zero incentive to sell their bitcoins for less than the cost of producing them. Left to themselves, the price should approach the minimum cost of producing bitcoins (since they do have incentive to undercut each other as much as possible). Speculators could respond to a price increase by miners by dumping their inventory on the market somewhere between the old break-even mining price and the new break-even mining price, undercutting the miners and lowering the price. This would go on until either the speculators exhausted their supply of cheap bitcoins, or the miners were all driven out of business. The real question is how the supply of the miners compares to the supply of the (active) speculators. If the miners are the principal supply of new bitcoins, and speculators are by and large just holding their bitcoins until some future time when the price is even higher, then the miners could totally up the global price by upping their own prices.
  - wmf 13y ago
    Miners have zero incentive to sell their bitcoins for less than the cost of producing them. Unless bills are due and the credit card is already maxed out.
    - gweinberg 13y ago
      I think the parent meant that miners have zero incentive to produce bitcoins if they can't sell them for at least the production costs. Even if they sunk a big pile of money into their mining rigs, if they can't sell the coins for the marginal cost of producing them, continuing to mine is just throwing good money after bad.