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Title: A wide gap that cannot be bridged will likely bring down Bitcoins Post by: brucesewell on July 03, 2013, 04:16:58 PM First, a central bank can, in theory, print money as fast as they can. However, this does not happen in reality because issuing too much currency will feed inflation only and eventually destroy the economy.
Unlike a central bank, Bitcoin miners are not interested in maintaining the stability of the Bitcoin economy. While a central bank would choose to control the amount of cash floating in the market (admittedly, they are not doing a good job either), Bitcoin miners will want to make the best value out of mining and will dump the mined coins on the market whenever they can make a profit (the arbitrarily set limit of 21 million is nothing scientific and does not accommodate the real Bitcoin economy activities in any way). Here comes the sharp difference, that in my opinion, would likely bring Bitcoins down. Second, looking back, the initial miners created their fortune too fast, with too little investment. The result is that those people will dump the coins they have anytime the market is good. This would likely be a disruptive force that crashes the exchange rate. Unlike people having to pay a fair amount of money to get Bitcoins (whether through using expensive mining machines or buying the coins direct on market) this year, those pilot indeed can dump the coins and make a profit at anytime. This means that the market will always face the risk that some unknown adopter just arbitrarily dump the coins and then crash the market. Think of April 11, a tender of sale for 20,000 coins eventually pushed the market downward, until today. Unless someone can resolve the issues, I would say, be cautious. Title: Re: A wide gap that cannot be bridged will likely bring down Bitcoins Post by: empoweoqwj on July 03, 2013, 04:25:02 PM First, a central bank can, in theory, print money as fast as they can. However, this does not happen in reality because issuing too much currency will feed inflation only and eventually destroy the economy. Unlike a central bank, Bitcoin miners are not interested in maintaining the stability of the Bitcoin economy. While a central bank would choose to control the amount of cash floating in the market (admittedly, they are not doing a good job either), Bitcoin miners will want to make the best value out of mining and will dump the mined coins on the market whenever they can make a profit (the arbitrarily set limit of 21 million is nothing scientific and does not accommodate the real Bitcoin economy activities in any way). Here comes the sharp difference, that in my opinion, would likely bring Bitcoins down. Second, looking back, the initial miners created their fortune too fast, with too little investment. The result is that those people will dump the coins they have anytime the market is good. This would likely be a disruptive force that crashes the exchange rate. Unlike people having to pay a fair amount of money to get Bitcoins (whether through using expensive mining machines or buying the coins direct on market) this year, those pilot indeed can dump the coins and make a profit at anytime. This means that the market will always face the risk that some unknown adopter just arbitrarily dump the coins and then crash the market. Think of April 11, a tender of sale for 20,000 coins eventually pushed the market downward, until today. Unless someone can resolve the issues, I would say, be cautious. Wrong conclusion based on wrong premise. Miners will make money in the future from transactions. Transactions only happen if bitcoin is a success. So miners have absolutely no interest in bringing down the bitcoin economy. In fact, since they hold so many bitcoins, they have a vested interest in seeing each bitcoin being as worth as much as humanly possible. Title: Re: A wide gap that cannot be bridged will likely bring down Bitcoins Post by: jubalix on July 03, 2013, 04:47:10 PM First, a central bank can, in theory, print money as fast as they can. However, this does not happen in reality because issuing too much currency will feed inflation only and eventually destroy the economy. Unlike a central bank, Bitcoin miners are not interested in maintaining the stability of the Bitcoin economy. While a central bank would choose to control the amount of cash floating in the market (admittedly, they are not doing a good job either), Bitcoin miners will want to make the best value out of mining and will dump the mined coins on the market whenever they can make a profit (the arbitrarily set limit of 21 million is nothing scientific and does not accommodate the real Bitcoin economy activities in any way). Here comes the sharp difference, that in my opinion, would likely bring Bitcoins down. Second, looking back, the initial miners created their fortune too fast, with too little investment. The result is that those people will dump the coins they have anytime the market is good. This would likely be a disruptive force that crashes the exchange rate. Unlike people having to pay a fair amount of money to get Bitcoins (whether through using expensive mining machines or buying the coins direct on market) this year, those pilot indeed can dump the coins and make a profit at anytime. This means that the market will always face the risk that some unknown adopter just arbitrarily dump the coins and then crash the market. Think of April 11, a tender of sale for 20,000 coins eventually pushed the market downward, until today. Unless someone can resolve the issues, I would say, be cautious. uhhhh no, no and no if anything miners may keep a lot of their coins, eg if one thing many early miners wish it was they kept their coins!!! Title: Re: A wide gap that cannot be bridged will likely bring down Bitcoins Post by: Chet on July 03, 2013, 04:51:42 PM And the main point - a 'central bank' is one point with its own interests which may or may not be 'good'. Miners are a lot of different people with a lot of different ideas. Spread the risk.
Title: Re: A wide gap that cannot be bridged will likely bring down Bitcoins Post by: chmod755 on July 03, 2013, 06:02:09 PM Miners will make money in the future from transactions. Transactions only happen if bitcoin is a success. So miners have absolutely no interest in bringing down the bitcoin economy. In fact, since they hold so many bitcoins, they have a vested interest in seeing each bitcoin being as worth as much as humanly possible. Indeed, and they could make even more BTC, if more transactions are happening via tx fees. Title: Re: A wide gap that cannot be bridged will likely bring down Bitcoins Post by: warpio on July 03, 2013, 06:05:30 PM The solution is to make it so people won't want to trade their bitcoins for dollars. Why go through the trouble of transferring to dollars at all when you can buy everything with bitcoins?
Title: Re: A wide gap that cannot be bridged will likely bring down Bitcoins Post by: MicroGuy on July 03, 2013, 06:06:59 PM First, a central bank can, in theory, print money as fast as they can. However, this does not happen in reality because issuing too much currency will feed inflation only and eventually destroy the economy. Unlike a central bank, Bitcoin miners are not interested in maintaining the stability of the Bitcoin economy. While a central bank would choose to control the amount of cash floating in the market (admittedly, they are not doing a good job either), Bitcoin miners will want to make the best value out of mining and will dump the mined coins on the market whenever they can make a profit (the arbitrarily set limit of 21 million is nothing scientific and does not accommodate the real Bitcoin economy activities in any way). Here comes the sharp difference, that in my opinion, would likely bring Bitcoins down. Second, looking back, the initial miners created their fortune too fast, with too little investment. The result is that those people will dump the coins they have anytime the market is good. This would likely be a disruptive force that crashes the exchange rate. Unlike people having to pay a fair amount of money to get Bitcoins (whether through using expensive mining machines or buying the coins direct on market) this year, those pilot indeed can dump the coins and make a profit at anytime. This means that the market will always face the risk that some unknown adopter just arbitrarily dump the coins and then crash the market. Think of April 11, a tender of sale for 20,000 coins eventually pushed the market downward, until today. Unless someone can resolve the issues, I would say, be cautious. I think Bitcoin will survive for many decades but could potentially take a backseat to some of the newer alts. By modeling coin generation after the rules of physical gold, the upcoming Goldcoin (GLD) fork will address many of these stated limitations. The successful currency must have; 1. massive consumer adoption, 2. practical methods of exchange (android), 3. adequate but finite supply, and 4. enduring miner incentive. I also think the winning alt will be viewed as both a currency and a commodity. Title: Re: A wide gap that cannot be bridged will likely bring down Bitcoins Post by: biggie on July 03, 2013, 06:39:54 PM The solution is to make it so people won't want to trade their bitcoins for dollars. Why go through the trouble of transferring to dollars at all when you can buy everything with bitcoins? Exactly ! That's what i've been saying. I know it's not yet that easy, but the more people realize they have the power to change things for the better the faster we'll all be able to deal in bitcoins or other good cryptocoins to do what we wish. No more middlemen, no more bank issues, taking away control from those who currently control fiat. Just think of the recent case of Cyprus, where people woke up to find out they got a haircut to bail out banksters. Title: Re: A wide gap that cannot be bridged will likely bring down Bitcoins Post by: brucesewell on July 04, 2013, 01:29:18 AM I have a feeling that the Cyprus case is exaggerated a little bit. Is there any study to examine the relationship between Cyprus people's reaction to the freezing policy with the seemingly increased desire to purchase Bitcoin?
My view is that there is no apparent relation. I would rather say Cyprus people were better off purchasing US dollar instead of Bitcoin if they really wanted to use the currency in their life. |