Bitcoin Forum

Why are the bitcoins so expensive?
Does the price of them rising matter with the product bought with them?

If you're buying them to spend immediately, then no. Prices are still being determined dynamically in fiat by most merchants. Spend away!

You should've checked out BTC prices a few days ago, they peaked at ~$15.40 (USD)!

You can check approx. prices at mtgox.com.

Bitcoins have a limited amount, the more people and money that gets put into bitcoins, the less coins per person and the more money per coin

That's how I see it anyway, I'm not a finance expert by any stretch

It means if you're buying them to spend, they will buy 10$ worth of goods while they cost 10$.

If you're scared off from investing in a commodity because the price changes, you don't understand finance enough to invest. Avoid it.

If you just came here to bash bitcoin, then goodbye.

Its under 4 years old, so no, it is not steady yet, but the more it gets used the more steady it will be

IMO both $5 and $10 are low prices for something that is 1/21000000th of an entire economy

and as pointed out, if you buy them to spend right away you get dollar for dollar in buying power

How many coins?  We offer below market prices to large buyers (see sig).

If you need a few coins and need them right now, BitInstant is likely your easiest and most direct option.

If you want to use an exchange check out bitfloor.

Bitfloor is who I'd recommend, with bitcoinsdirect being a better option for large orders. Either one boils down to cash deposit at a bank branch.

To understand the price its probably a good idea to have a look on other financial instruments, for this example i take stocks.

(a share traded with a high dollar value might still be cheap, a stock worth tens of a penny could be worth not even the paper its printed on, ie completely overpriced, look on penny-stocks, many are worth nothing)

http://www.investopedia.com/terms/m/marketcapitalization.asp

Also to consider:
- electricity costs of mining
- equipment to mine
- running costs, exchanging parts
- time spent on mining that might need to be compensated

You recommend bitfloor over mtgox?  Why?

Ease of getting money to the exchange: cash bank deposit and rough time to market of ~ 1 hour with 0 fees. Best at MtGox is wiring money with a > $10 fee for time or dwolla with a $0.25 fee and an initial 30 day wait for price.

If you trust the blockchain enough, you can also see bitcoin as a very good long term investment.

If I understand correctly the OP is wondering what makes bitcoins valuable.
The closest thing to bitcoin is gold, if you exclude using gold in jewelry [which is mostly to show it off], bitcoin and gold are similar in many ways.
Compare bitcoins to gold ingots, they turn out to be similar in many ways:
-Both are rare and limited in the world.
-Both require effort to produce.
-Both can be traded anonymously and are accepted as payment methods in many places.
-Both have no way of reversing the payment unless the person who received them willingly sends them back.
-Both have a deflating value, not really deflating but rather than the money we use is inflating :)

The money we use now is originally used as a replacement for gold, I think the old US Dollar had something that says you can refund the money to gold anytime you want.

TL;DR version: bitcoin is the new gold :)

You got it all right!

1BTC pegged to 1oz of gold would be quite nice.

quite nice indeed.

1oz of gold worth arround 1600$, if btc goes up to 1600$ per bitcoin, everyone will go crazy (me included)

down again  >:( wtf

For sure - but also understand that there are over 5 billion ounces of gold in existence and currently only around 10 million bitcoins (with the maximum amount ever to exist less than 21 million).

If bitcoins were to really be valued as being worth the same as gold then that would make 1 btc closer to 1 million USD.  ;D

whats happening  i report the spam

Hehe, that'll be the day.  Makes mining at 14 Mh/s seem a lot more worth it right now :P

it is popular now ))

I'm sure everyone has pointed out how inexpensive they were when you first made your post.  But many products adjust their bitcoin pricing when it goes up.  Like if bitcoin doubles in value vs the US dollar, they charge half a Bitcoin for it instead of a full one.

Yes, Bitcoins are expensive, however, I believe that what is important (in terms of trading and speculating) is their long term potential and % change in value over time, I believe that people are put-off by the idea of not being able to own a whole bitcoin, I would propose denominations on the Satoshi Scale as follows:

10 = 1 Gigoshi
1 = 1 Bitcoin
0.01 = 1 Megoshi
0.00001 = 1 Kiloshi
0.000001 = 1 Hectoshi
0.0000001 = 1 Decoshi
0.00000001= 1 Satoshi

Suddenly, I feel like I am inside a Nintendo game...

which is why I prefer millicoins. 

I mean at $0.12 per millicoin I can't see how people think they are too expensive*


*As if the nominal value really matters.

But unfortunately most bitcoin-USD transfers aren't instant unless you have fiat laying around in some exchange.

Hundred dollar bills are expensive then too. I don't see anybody complaining about how much they cast, though.

it's a simple economic explanation with supply and demand, and SPECULATION of course :)

prices changing every day depends on for example how many people buy and sell them through the night. Lots of people just sell them when the price is heigh, and buy them when the price is low.
and they try to make profit this way. but personally i think it is really worth to keep them. even invest in them, as i believe prices ll go up and up as the real cash more and more inflated. anybody agree?

Currenty, I believe speculative ups & downs are hurting the establishment of BTC as a reasonable alternative for online traders to Paypal etc.
BeeCoin

They will be much more expensive in the future  ;)