Bitcoin Forum

The reason is simple:
                ASIC devices are only use for BTC mining purpose , they will depreciate its value over the time and with no residual value, not like GPU miners they can sell its graphic card if mining is not attractive for them. this equal to set a exit barrier for those new ASIC miners. the only things for them to recovery their investment is to maintains BTC price at acceptable level by act rationally when BTC price is under their expect profit range ,( limiting their supply to the market), util the market adjust price level at what they expected.
                I think BTC price are determine by factors below:
                legal factors.
                mining investment.
                people's trust.
Since ,the development of ASIC we will see a more stabilize price ever.  People never stop investing in BTC, this is the truth so far, KNC pre-order sold 8562 units. no matter what the currency they used to pay, we should assume all those cost paid to KNC will as a indirect investment  into the BTC world, thus the ASIC mining will further increase the price of BTC. further more , not only KNC, there are BFL ,ASICMINER and so on. payments made to mining rigs manufactures are far more than what we thought , may be  more than the money paid to the online exchange.

               If no government intervention or other related bad news in the future, we should expecting another BTC price increase ,because of those ASIC devices are start mining . That increase is coping to the market trend and based on people's rationality , if anyone ask me , what the BTC price are backed ? I will say that BTC price is backed by every currency investing into mining and those payments made to its reflect cost.  

              PS: The rights to issue money should not below to government , it should below to its users which are people.  
 
 Welcome to debate with me , if you feel that assumptions above are not rational and are false.              

 


 

Sure, ASIC miners will have to maintain scarcity and keep that 3600/day faucet as blocked as possible in the event that price starts going below their comfort zone. The question is how much of daily sell-side volume do miners contribute?



I respectfully disagree that this depends on no government intervention. If killing bitcoin were as easy as hurling AML regs at legacy exchanges, FinCEN and other authorities would have done it a long time ago. As we see in countless cases, government regulation for a good/service that is in demand will actually increase prices. You can't fight economic laws. The oft-made argument that reduction in supply of bitcoins (achieved via regulation) would automatically reduce demand is a very weak one as similar situation has not materialized in the case of illegal drugs, alcohol during prohibition, BitTorrent filesharing, US Dollars in Argentina, etc. Think of your own examples. Bitcoin is an extremely useful technology and that will not change. So long as the protocol remains healthy, it will be a tool to fight the corrupt Banksters.

Yes, you are right , it also depend on how much of daily sell-side volume do miners contribute, the question is if price below their comfort zone, they will buying BTC instead of mining, thus I think this ask wall will be eat by the market very quickly . I think most people invested in BTC will not likely to see their money destroy by crash of BTC price .


I should change it , i means if not any government related bad news in the future , we should see a price increase because ASICs devices.

Wrong. They are can, and currently are, mining alts, like ppcoin for example.

aren't alts practically pegged to bitcoin price?

From my personal opinion, alt coins are not perfect substitute to bitcoin, if bitcoin totally crashed this equally means people loss faith on encrypt currency, there are no reason that other coins will be survive, may i ask you one question , if BTC totally crashed what will you do ? investing in other encrypt currency or go back to reality hold FUD, I think most people will choose to back to their own currency .

Yes , they can, but consider of the liquidity level provides by alt coins and bitcoin, mining most of alt coins by ASIC device is a hopeless action, it well very difficult for those miner to recovery initial capital by mining alts coin, you should understand that all ASIC device are extremely over priced, for those guys who buying those devices if they are rational they will never used it to mining other coins, due to liquidity issues. And as above I stated I personally do not believe alt coins are substitute to BITCOIN, the reason they are survive is because the succeed of bitcoin, if bitcoin went wrong is equally means the concept of encrypt currency is not longer appreciate by people, thus all alts coin will disappear either.

Most alts are Scrypt based derivatives of Litecoin, and at present can not be mined with ASICS. The few exceptions to this are: PPCoin (PPC), Namecoin (NMC), Terracoin (TRC), Devcoin (DVC), Freicoin (FRC), and IXCoin (IXC).

There are some people looking into getting ASICS to mine Litecoin and other scrypt based coins but it will  be away before that is posible. I also wonder if it will ever be a possibility or just a fantasy.

So,my assumption isn't false language, the up coming ASIC will has postive effect on BTC price, since it set entry and exit barrier for the miner, and currently those other Coins are useless, provides with needless liquidity, no reason to use those expensive ASIC devices to mining them .

There are many miners who blindly follow sites like http://www.coinchoose.com/ and http://www.coinwarz.com/cryptocurrency and mine the most profitable coin. They often switch what coin they are mining multiple times a day. There are some pools that do this easily for the miners.

Liquidity is the issue, may be they can mining ALTs by choose which is most profitable, the thing is how could they sold out ???price of alt coins often distorted, if they could not sell it or very difficult to sell ,despite might more profitable , I do not think they will mining to those coin.

Well someone called 'teek' is currently throwing 200GH/s at https://ppcoin.d7.lt/stats mining pool. That 200 isn't from a GPU farm.

Those alt coin are so poor....any of ASIC could destroy them by 51% attack....thereby no reason for ASIC to join them.

i agree with the premise of the OP.

there are millions being invested into mining which is what's driving the hashrate upwards relentlessly. 

the price is acting as a speculative oscillator around the hashrate as it goes higher.

The problem with you starting assumption is that about 60 000 coins are traded every day at major exchanges. This doesn't even include OTC and in-person deals. In comparison, miners currently provide an average of 3 600 new coins per day. Therefore, miners withholding or selling coins cannot have any significant effect on the price. 

Most people are holding coins and while mining coins by their miner rigs. I mean this part of people , actually has a great impact on price ,I think most miner are not selling every day what they has , and they are hold large potion of BTC indeed, if the price below certain level , they will not sell, if you look back the history of BTC mining, the price of BTC is related to mining difficulty.

Someone said, that the increased difficulty make it happen, that less coins are produced every day, is that true ?

With the increase in difficulty the price in long term can only rise :) Or it will fall a little bit when the new asicminer generation is coming in october, we will see, only my thoughts.

Ok. we will know by then ~

I did look back, carefully, many times. I even applied cross-correlation algorithms. I even corrected the data for technology leaps from CPU to GPU to ASIC. Mining difficulty mostly follows price, not the other way around. Google search volume mostly follows price, not the other way around.

What price follows, in order of importance, is
(1) chaos,
(2) insider trading and information,
(3) paid and orchestrated media campaigns as part of pump'n'dump attempts

As I clearly explained in my previous post, miners absolutely cannot play any significant role in exchange rates. The numbers are rock solid.

So, what is you though about ASICs? are they really does has any positive impact on price ?
what I thought is this time is different, because CPU or GPU to stop mining are not any cost issue lock them to do so ,but as I stated ASIC are totally different concept , you can't use CPU or GPU to judging that ASICs will has the same impact as those two. In fact, that since last time price drop we will see a steady build up through time, Again, people are buying BTC instead of mining. the only thing we need to discuss is whether BTC will continue maintaining people's trust. if it does, then the question will be very clear, if price below profit level, miner will continue mining , but not selling.

My argument is related either no bad news and no good news ,everything is remains the same.. the join ASIC will secure the price of BTC and with a positive impact.

Yes, ASICs are obviously different from (im)provisional mining hardware that has some use and value outside of Bitcoin ecosystem - although, do not ignore the heat that ASICs create - in certain regions you could recoup some of the heating cost by mining...
I cannot, however, come up with any specific connection with bitcoin exchange rates. I tried hard, believe me.
Emergence of ASICs simply indicates that Bitcoin has become important enough to warrant development of dedicated hardware and mining firms. Still, so do the sex toys, fishing equipment, and amateur astronomy - not that big of a deal in the larger perspective.

What you should focus on is the total investment of the mining industry. That is an important indicator, as that is what ultimately secures the network and shows the level of confidence in Bitcoin. ASICs got people excited, and it seems that total value of mining equipment today is higher than ever before. That is the good sign.

The next good sign after ASICs will be the start of an arms race, and emergence of closed-source, proprietary ASIC farms operated by mining companies. This will also spell an end to mining as a profitable hobby we do at our homes. I speculate that this will start happening once the price enters the $800-$1,200 region (if ever). Again, all these developments are mostly driven by price - they don't drive the price to any significant extent.

No. The system adjusts difficulty automatically so a block is found approx every 10 minutes. Give or take.

I might think too simple, but I still believe that ASICs will secure the price anyway..
may be you are right , this question is very difficult to be proving, since price is related to too many factors and no one can tell exactly impact of those factors on price.

I thought it will be decrease, so only after approximately 4 years time the system will change mining coin per day?

Price is just a lagging indicator. First come demand, then comes people who want to get coin, then they will evaluate the different approach of acquiring coin: Mining vs Buying

If price is too high, they will invest in mining devices; if difficulty is too high, they will buy directly

Price itself can also become a deciding factor when it rises very fast, but when price dropped, no one stop mining, since the long term projection is always positive due to limited supply

Ever since May 2011, the mining factor are constantly low, even with the price spike above $250, it never reached 2011 high, now again all the GPU miners are mining at a loss

http://blockchained.com/chart_large_log.png

IMO difficulty is irrelevant to price.I believe the contrary will happen: many gpu miners ordered asics with hefty investments. They will need to recoup their investments once equipment starts producing, hence increase selling pressure.
Presently, More and more btc are in the hands of few asic companies and they will want to hedge the price, so hoarding for long term is not an option for them.They will sell regularly and dump more as soon as there is a big rise.
Example:
 Avalon chips order nearing 75,000 btc ( https://blockchain.info/address/1FGAftzSTztFSB8LMwsrdCKTyqGY6zr3sU )
 Some Units for customers mined by Avalon 7,500 btc and probably cashed:(https://blockchain.info/address/18d3HV2bm94UyY4a9DrPfoZ17sXuiDQq2B)
 Proof here: https://bitcointalk.org/index.php?topic=236348.0  

Not all GPU miners are mining at a loss - it depends on what they pay for electricity.

Anytime, the price is affected by the selling of quick profiters vs buying of long term investors. Short term profiters will sell the coin as soon as they made some fiat profit, Long term investors usually have a plan to move part of their existing fiat asset into bitcoin and hold it for many years. I believe that many of the early adopters are hardcore longterm investors, these people drive the long term trend of bitcoin, and that's the reason difficulty is always related to price long term wise

When price dropped too low or difficulty raised too high and GPU mining can not cover the electricity cost, some of them with high electricity cost will shut down the rig and just buy bitcoin direct from exchange, and that has an effect of lower difficulty and raise the exchange price, thus put some balance between difficulty and price

I'm also hoping Santa is real cause I want some Christmas presents this year!

Yes, block reward halves every 210,000 blocks. (Approx 4 years.) But that has nothing to do with the difficulty.

well it will probably depress the price first.