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Title: In the long term BTC price will be... Post by: donjonson on July 04, 2013, 12:43:25 PM I think that BTC price on the long term will always adjust to:
LONG TERM BTC PRICE = PRODUCTION COST + NORMAL PROFIT There's nothing on the earth with a small entry barrier that resists a 500% - 200% - even 100% annual profit for a long time. Very soon the market will adjust it (we make sure it happens). It could take 1 month, 6 months or 1 year, but finally I think everything goes back to the earlier formula. Thoughts? Title: Re: In the long term BTC price will be... Post by: nobbynobbynoob on July 04, 2013, 12:47:18 PM So when the input cost is $100k worth of energy and effort to mine 1 BTC...
Title: Re: In the long term BTC price will be... Post by: miernik on July 04, 2013, 12:55:44 PM No, its the other way around: in the long term, Bitcoin "production cost" adjusts to the Bitcoin price. I.e. miners buy more hashpower until the difficulty is so high that its hardly profitable to mine.
Anyway I hope for the Bitcoin exchange rates to become more and more stable as the amount of new Bitcoins mined in a give amount of time is becoming a smaller and smaller percentage of the total number of Bitcoins in existence, so miners who are just in it for short-term profit and sell to fiat any mined Bitcoins will have a diminishing influence on the whole Bitcoin economy. After the next block reward halving things might already start looking better. Wondering to what extent the recent dumps on the market where done by Avalon ASIC miners cashing to fiat as they ran out of patience of Bitcoin rates going up, and they are still thinking in terms of fiat as of value, instead of just keeping the mined BTC for the long term. Impatience and fear - thats the reason price is going down. Once the impatient and scared will run out of Bitcoins, the price will start to go up again. Title: Re: In the long term BTC price will be... Post by: donjonson on July 04, 2013, 02:52:25 PM No, its the other way around: in the long term, Bitcoin "production cost" adjusts to the Bitcoin price. I.e. miners buy more hashpower until the difficulty is so high that its hardly profitable to mine. Anyway I hope for the Bitcoin exchange rates to become more and more stable as the amount of new Bitcoins mined in a give amount of time is becoming a smaller and smaller percentage of the total number of Bitcoins in existence, so miners who are just in it for short-term profit and sell to fiat any mined Bitcoins will have a diminishing influence on the whole Bitcoin economy. After the next block reward halving things might already start looking better. Wondering to what extent the recent dumps on the market where done by Avalon ASIC miners cashing to fiat as they ran out of patience of Bitcoin rates going up, and they are still thinking in terms of fiat as of value, instead of just keeping the mined BTC for the long term. Impatience and fear - thats the reason price is going down. Once the impatient and scared will run out of Bitcoins, the price will start to go up again. You're somewhat right miernik but I think the price won't go lower than production cost... so price bounces in production cost and then production cost goes as high as the price goes. Title: Re: In the long term BTC price will be... Post by: BitcoinBarrel on July 04, 2013, 03:36:23 PM Title: Re: In the long term BTC price will be... Post by: Pentium100 on July 05, 2013, 08:55:15 AM In my opinion, in the long term, the BTC price will either be very high (BTC gains mainstream support, becomes accepted by many businesses etc, the total BTC market value becomes billions or trilloins of dollars because verybody uses it) or very low (BTC is a fad that passes and becomes worth couple of cents). There pretty much is no middle point, because both of those directions have positive feedback loops, so it will either go up and up or crash and stay there. After all, BTC is not useful by itself (the same way that gold or tulips can be used for purposes other than currency/investment).
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