Bitcoin Forum

why is this? shouldn't the increase in terahash bandwidth cause an increase in price of btc?

i mean it means that more people are fighting over blocks and its rewards

Hashrate isn't the only factor influencing the market.

IMO, in any case, the price affects the hashrate, no the hashrate the price.

Edit:
anyway that will change with ASIC, we will have a huge hashrate at low consumption, so even if the price falls nobody stop mining.

I have no idea why people think the price of a BTC should go up in value when there is more of them available. It makes no sense to me.

Bitcoin can only go UP UP UP!

I don't understand what you mean with "there is more of them available"


Edit:

The price, in relation to mining, could rise in the medium term by:

* The Reduction, the miners will use the same time for half of production = sell more expensive.

* ASIC, miners have large GPU rigs and continue mining, not only will be affected by the reduction, but by a high difficulty that further reduce the production = sell more expensive.

Are you thinking a rising hash rate results in a higher number of coins mined?   It doesn't, as difficulty adjusts to compensate.

Back about two and a half years ago, when all the miners for the entire network combined was under 1 Ghash/s, about 7,200 bitcoins were mined each day.  Today with all miners combined totaling 22,000 Ghash/s, 7,200 bitcoins are mined each day.

It will definitely be interesting to watch the going price for BTC over the next 3 months. It will give us a good idea of whether BTC will survive and flourish over the long term.

There are more coins on the market now. More coins are available.

That 50 (soon to be 25) BTC reward is a small piece of the bitcoin economy. Most people using and trading BTC are not fighting over the block reward.

Anyway, your premise is wrong. The price of BTC is rising. It was 1/3 of the current price less than 1 year ago.

And 15 months ago it was just about 3x the current price or if going back to last December just about 1/6, if you are choosing arbitrary point in time to try and look like you are making a relevant point at least pick the one that looks the best. Oh and to the OP as the difficulty has increased this summer the price has risen as well from $5 at the start to just about $13 now. More than making up for the increase in the difficulty.

Bitcoin's value only goes up when people buy them. People buy them when they're needed to pay for goods and services. Goods and services that can ONLY be paid for with Bitcoins are therefore the best way to increase the value of Bitcoins. Bitcoin jumped in value by approximately 3000% when the world discovered Silk Road. When merchants are willing to take Bitcoin over fiat, that's when Bitcoin wins, and rises in value. Hashrate has nothing to do with goods and services available to public and private markets, with the exception of companies who sell mining equipment. If anything, ASICs will drive prices down temporarily since the production of Bitcoins will be inflated while blockchain difficulty compensates for the increase hashrate. People with Bitcoins who DON'T mine are the ones driving the value up, and many of them will be completely unaware of the upcoming block reward being cut in half. If you want Bitcoin value to rise, merchants need to accept Bitcoin only, and deny customers who can only pay with fiat. This is much easier said than done, as most merchants who accept only Bitcoin are typically dealing in illegal goods and services and wish to do business in a clandestine fashion.

What i'm wondering is, what timeframe are you looking at?

When i look at the charts (http://blockchain.info/charts) i only see the opposite,
that the price of btc went up about 20% within the last month,
but the network hashrate didn't change at all.

Price of BTC goes up -> More people mine -> Network hashrate goes up

Price of BTC goes down -> Miners take a break, give up, go back to playing games, etc. -> Network hashrate goes down

Yep. Moreover, the price has already gone up. GPU mining is loopy profitable again... rate is still catching back up, no doubt tempered by expectations of incoming asics.

We have had almost three difficulty increases in this last month, the hash rate has increased.

Scroll down to the charts at the bottom of the page at this link and look at the various charts.  

http://bitcoinx.com/charts (http://bitcoinx.com/charts)

So now you do not need to guess at what is happening.  You can just look at what is happening.

the price is going up... just slowly, but itll probably pick up when we get closer to the split...

Did you even take the time to look at the hashrate-chart (http://blockchain.info/charts/hash-rate?timespan=30days)?
It has been everywhere between ~19TH/s and ~24TH/s within the last 30days, right now where at ~20TH/s, so where exactly has it increased?

Don't have too just yesterday it went from the high 2m to just over 3m an increase, the diff change before that was an 8-10% increase same as the one before it, it has been doing similar increases for the last few months. The last three diff changes all increases as the ones before them were.

http://blockchain.info/block-index/311130/00000000000003a5e28bef30ad31f1f9be706e91ae9dda54179a95c9f9cd9ad0
http://blockchain.info/block-index/311129/000000000000041fb61665c8a31b8b5c3ae8fe81903ea81530c979d5094e6f9d

http://blockchain.info/block-index/297251/000000000000002e00a243fe9aa49c78f573091d17372c2ae0ae5e0f24f55b52
http://blockchain.info/block-index/297250/0000000000000304760bf583f4ac241c5ffe77312fa213634eba252c720530f1

http://blockchain.info/block-index/277923/00000000000003f64d7662362aba91a5bdccbdbf6574fb42ddca28f1f0ec11fe
http://blockchain.info/block-index/277922/000000000000067080669115c445f378f3dec19787558d0e03263b9dec5d7720

Ive seen a steady price increase lately!! Although will it be able to keep up with the difficulty the Asics will cause. I dont know.

Balls. That is all.

The price of Bitcoin, like all prices, are determined by supply and demand.

Mining doesn't increase supply (since there will always be 50BTC / ~10min).
And it doesn't increase demand, since miners don't want to buy BTC.

So mining does not affect the price of BTC.

If more mining rigs use FPGA and ASIC, then those miners will be able to sell for less. So there will be less resistance to a fall in price.

Are you really trying to argue over the fact that the difficulty is going up (meaning = the average hash rate is going up by definition)?  See the actual data in this post:  https://bitcointalk.org/index.php?topic=115333.msg1243847#msg1243847 (https://bitcointalk.org/index.php?topic=115333.msg1243847#msg1243847)  It is just silly to argue over facts, because, well, they are facts.

And how does that increase the price?  :D Do people pay to see these guys fight for blocks?

Yes, there are more people fighting for the block. But why should i pay a block more? If a block is worth x$ then i'll pay x$, no matter how many people fight for it.

The World Bitcoin Mixed Martial Arts cage match on Pay-Per-View!  Watch as miners fight for blocks of bitcoins!

No, miners are always selling for as much as they can, they are not (that) stupid.

Yes, they will look for the highest price. But if the price drops (for other reason) ASIC miners will still be able to have profit. ASIC will not cause price drop, but will reduce resistance to price drop, until everyone has ASIC, difficulty is x500 higher, and mining costs are high again as today.

x500 from https://en.bitcoin.it/wiki/Mining_hardware_comparison (https://en.bitcoin.it/wiki/Mining_hardware_comparison) - Mhash/J for GPU is about 2, for ASIC is 1000.

At current difficulty a GPU miner cannot profit if price falls below $5.50, but ASIC miner can profit at $0.02 (this is just electricity cost, ignores hardware cost).  Look at http://bitcoinx.com/profit/index.php, with difficulty=3million, electricity $0.15/kwh, power 1500W with 1500GH/s for ASIC (eg BFL minirig SC) or 3GH/s for 4xGPU.

Good business plan would be - buy BFL ASIC minirig, sell coins at $5, force GPU miners to quit. From http://bitcoinx.com/profit/index.php you profit $40000 in 1 month - time to buy another BFL ASIC. But difficulty might reduce from GPU miners quitting, so maybe you profit even more. Or maybe you cause crash in bitcoin and lose everything :-)

Biggest problem: do BFL really have 1.5TH/J hardware for $30k?