Bitcoin Forum

Here are the facts. 

Before the hacking of Mt. Gox, BTC was 17.50. Then it re-opened a week later, and pretty much stayed around 17 after a short dip.

Then 16 became the new 17.
Then 15 became the new 16.

NOW, we have 14 as the "new 15".

(End plain facts. Begin discussion.)

I don't know about you, but I don't like this trend! Are we hitting a saturation point of BTC users? Is there anything we can do to reverse this trend? Has everyone here told all his family/friends about Bitcoin yet?

I realize that BTC users are a small fraction of the population -- but how many people would ever use BTC? Those who don't rely on mainstream media for their news, for example? Any sheep who rely on CNN for their news are going to think BTC is unstable, hacked, dropped to .01 for days, then slowly crawled its way back up over a period of weeks, etc. (Media stories are VERY biased against Bitcoin -- in some cases, downright UNTRUE)

It reminds me of how they have "20-can cases" of pop now, priced the same as the good old 24-can case. 20 cans is the new 24!
Ah, progress! In other news... The chocolate ration was increased from 3 grams a day to 2 grams a day. All hail Big Brother!

And yet, it costs around $6 to produce a bitcoin now (hardware ammortization over an expected 3 month lifespan + power).  That's still a healthy profit margin, so I'd say $14 is overpriced today.  $32 when the cost to produce was around $2 was pure insanity.

Both BTC prices and difficulty are still catching up to the results of a $32/BTC bubble.

What really happened is a large amount of people did math at $32/btc, bought piles of hardware and now *need* to sell every bitcoin they produce as soon as they're being produced.  In effect the daily supply increased, since previously a much larger % was hoarded.

That, and it's the weekend effect.  The Ponzi Pyramid will be growing again once people can deposit $ to MtGox tomorrow or the day after.  If you have funds at mtgox $14 is definitely not a bad price point for a 3 day gamble.  Much lower risk than buying hardware and waiting for it to ship.

i don't really know why the cost to produce them should scale with the price. there are 6 million bitcoins out there which were basically free. why would you want to make these people rich? no reason at all. i'm starting to lose hope. i told myself i won't sell my mined coins below $20, but we'll probably never get there again.

the thing with bitcoins is - those who trade with them do it because they can turn them into $. they have value because of the benefits drug dealers see in them. wow.

A lot of people having been saying that Difficulty increases as price increases, not the other way around. I think June showed some supportive evidence to that theory.

It's going to be the end of bitcoin!  Sell all your rigs at 50% off to Angelus, you pimple face 17 year old geeks living in your mom's basement using your mom's credit cards to buy graphics cards.  Game over man

With the exception of the last post, good points were made.

I agree that price might keep falling, even while difficulty increases (albeit at a slower rate than during May-June).  As long as there's profit to be made, some people will do it. Obviously, a different group of people will mine for $1/day compared to those who will mine for $35/day (which is basically everyone, even non-PC-techs!)

Many have pointed out that various distributed computing projects had support over the years, even though the $ payout was precisely 0.

On the other hand, I don't think people went out and bought hardware for ClimatePrediction.Net, SETI@home, or other BOINC/distributed computing projects. Moreover, I'm sure they didn't have multiple rigs running 24/7, with extra fans/air conditioning/etc.

Anybody here familiar with a head-n-shoulders trend. Look at the mt gox closing price chart for the past 3 months. Were on the left shoulder. I will bet on it. The value will go up. There's the value that were overlooking: fun & addiction. It's the reason zynga is so successful. The price will go up.

Coinvestor (Ryan)

Just to note, you forgot one of the largest distributed computing projects out there, Folding @ Home http://folding.stanford.edu/

Many, many supporters of that project (including myself) have purchased quantities of hardware, with sole intention of running dedicated 24/7 folding machines. I've been folding for 3+ years now, and have invested more hardware into that project than I have for my own purposes. Mainly because it's a good cause, and some friendly competition, and I enjoy messing with hardware.. Of course, had I found out about bitcoin much much earlier, I probably would have been buying hardware for it instead. Sadly, optimal hardware for folding is opposite for what works best for mining, so I've started selling off folding gear and buying up mining gear instead...

neways.. jsut thought I'd throw a mention for F@H out there.

I'd sure be ecstatic if the price went up.

I don't want to do what you're doing in your avatar...

Yeah I forgot to mention that one.

I've actually been into distributed computing projects off & on since early 2007.  I used to visit "distributedcomputing.info" every day looking for new projects, especially any that PAID. Of course, there were none. Ever.

I even checked that site a year ago -- no mention of Bitcoin!!  I can't believe it.

Yeah same here.. I checked distrubutedcomputing.info occasionally as well, don't remember ever seeing bitcoin on it.

Funny how there still is no metion of bitcoin there

Have you guys ever heard of Popular Power? They first attempted to monetize a project just like f@h

Coinvestor (Ryan)

Goes to show you -- that site is as worthless as a chocolate teapot.

I hold it against them that I didn't find out about Bitcoin in July 2010. That's when I went there, and installed "Boinc" on my new Linux system, and did processing for one of the distributed computing projects for a few days until I got bored with it -- actually, not really bored, but more "why am I wasting electricity on this"?  

Matthew

If your so scared of bitcoins, why don't you go collect namecoins.

Popular Power promised that some day they would begin to pay for work we did for them.  They never did implement a pay for work scheme.
However, I did manage to earn 25 cents for my computing resources at CPUshare.com (now long defunct). 

I think if implemented correctly that system could flourish now. There will come a time when mini miners (under 5ghash) will lose value and therefore lose interest. What to do with your hardware? Come to "blank" and they'll payout for processing power based on what you can offer in hash rate. Thoughts?

Coinvestor (Ryan)

To get back to the original topic of the thread, it looks like now 13 is the new "14".

I hope a bunch of buyers come in on Tuesday...

There is not much really to discuss here. Supply is a lot bigger than demand right now, and that's the simple explanation why price is going down.

If you look at the chart since May you will notice that before the boom/bubble started we were basically at $10. This is pretty much where we are going now. I'm not saying we will drop $14 tomorrow and be at $10 by the end of the week. What I'm saying is that since there isn't any real fundamentals behind bitcoin and the fact that we had a first boom cycle,  price needs to ultimately correct itself, based on the fact that there isn't any new development for the real use of the coins right now. Demand for a fresh coins can't keep up with a constant supply and as a result price is adjusting. Until there's any news or a significant influx of new bitcoin  buyers willing to throw a total of few million $us at the market, price can't really start a new real uptrend.

Will anything change if we hit $10? Probably not, but we will see, if we ever get there. People need to realize that 2016 blocks at 50 BTC makes 100.800 BTC which at the moment translates into a demand for $1.411.200 of fresh hardcore cash every 2 weeks. Doesn't sound that much, but the fact that you can only use it on silkroad or buy alpaca socks with it, makes that $1.4mill a bit hard to find. Yes yes, I have seen all new services accepting bitcoins, but give me a break. Bitcoins needs time and legitimate people offering good deals, while people behind the project needs to make it a lot more user friendly.

All this daily or week to week analysis and/or constant posting it just shows that too many people were caught in a hype and that's a reason we had a bubble.

Completely agree!

There's (at least) two ways to change this assertion in order to make it true (instead of false, which it is):

• 1.) higher difficulty => lower price
• 2.) higher price => higher difficulty

1.) is easy to argue: difficulty rises when people freshly investd in mining hardware. They want to recover their investment so they put the bitcoins on the market => higher supply => less value

2.) is also pretty clear: a high price creates incentive to mine and makes mining more profitable => people invest in mining hardware => difficulty rises

I never understood how higher difficulty would drive the price up.

I tried telling a few friends and family members about bitcoin.  All had the same two comments: Why does it have any value?  And... It sounds like a scam/pyramid scheme/etc.  I gave up.


Referring to people as sheep isn't likely to win you any friends.  The number one problem with bitcoin is that there is so little that one can purchase with it.  Apart from Silk Road, there doesn't seem to be a compelling reason to use bitcoins.  The only other group of people happy so far are the tax avoiders and money launderers.  I'm just waiting for the first media article stating pedophiles are using bitcoin to trade material.  Any day now.

Hi Ryan,

For those who do not know about the famous Head and Shoulders technical analysis chart pattern, here is the Wikipedia description: http://en.wikipedia.org/wiki/Head_and_shoulders_(chart_pattern)

In contrast to your analysis, I believe that we are on the right shoulder and that is strongly negative, should that pattern be completed.

Unfortunately, one cannot observe gap patterns if the market never closes.  The daily price charts from Mt Gox for example, arbitrarily choose a market open time point. Gap patterns reflect dramatic changes in trader sentiment during the period that the market is closed.  Other technical indicators that track momentum do not have this problem, e.g. moving averages.
 

Well, now it's in the $12's.

Looks like the right shoulder of a head-and-shoulders to me.

Like I said, it's not just the charts that are scary. The fundamentals (over 100,000 BTC produced in 11 days; most of which need to be bought by someone) show a lot of downside potential as well.

I don't feel the same hype vibe that I felt a month ago; I feel like BTC growth/hype has reached a plateau, if not started to decrease. (Now that's very subjective, so I can't put that forward like it's fact or anything -- just my own vague, intuitive, personal feeling after keeping up with this board for some time)

And just look at the chart -- it's a slow, measured, steady decrease. Not some flash-crash coming from a guy selling 200,000 BTC. This is the organic market finding a new price for BTC.  

Unfortunately, I liked the OLD price a whole lot better, thank you very much!

A whole bunch of people have just discovered they won't get rich by doing nothing while their PCs consume vast quantities of electricity.  That's a powerful incentive to mine less, which in turn will lower the price as people who already have bitcoins and are ready to give up will dump what they have left.

I turned off two 6950s today.  At the current price (and with the weak US dollar) I was breaking even on costs.  If the price falls to $11 then I'd definately be making a loss on every bitcoin generated.  There are many people (mainly in the USA) who get very cheap electricity and apparently pay no tax on income, so they're happy to mine even if the price hits single digits.

maybe you didn't do your maths.

That rig probably takes like .6kw/hr. Even with BTC at $10, you'd easily be turning a profit after electricity unless you're paying over $.3/kwh.

Not exactly legal to not claim income, but I doubt the IRS will catch on.

I can't believe BTC is selling in the $11's now.

What is your next unbelievable target? Will you shit your pants at $9.75 ? And at $5 will you realize you wasted all this time and money buying GPUs and for what ? While preaching to the masses that mining isn't profitable any more. At least you will be able to start new threads "I told you so..."

You cry at nights?

no price is guaranteed...regardless of difficulty the supply is constant.. existing bitcoins + 50 BTC/10mins
demand is what changes.. what we need is another news article to snag a few greater fools
or heaven forbid novel concept... a USE FOR BITCOINS outside drugs + child porn.  LOL.  Many folders@home went from curing cancer to supporting the drug trade... funny what paying a couple nickles does to one's lofty morals..

but for now im going to buy a pair of alpaca socks which say 'i spent 10,000$ in mining hardware and all i got to show for it are these alpaca socks'
If it weren't for bitcoins would alpaca and 'goxed' be in the common vernacular?  Shall we say greece's drakhma has become alpaca'd?  ie a phrase to indicate that something intended for broad scope/use has a limited almost comical actual use?  Like I bought that soloflex and at first i used it every day but now its being used to prop up the plastic christmas tree -  it has been alpaca'd?  I dont know help me out here guys..

ok so i lost a few g's but me and my biz partner just shrug our shoulders and go 'lunch money'

then roll the dice again on a new scheme..... I hear peru's got a nice foreign investment program in a few alpaca farms...

if u cant beat em..

It consumed 450w (pretty efficient), so about 10.8kWh per day.  At 25c/kWh that's $2.70.  It generated around 0.5BTC per day (15% less after today's difficulty increase too) so $6.25 per day.  I have to use BitPiggy to withdraw funds as there's really no other way to do it in Australia.  They slice around 15% off BTC's price (the weak US dollar impacts here too) and often don't have funds available.  So let's say $5.30 income per day. 

$2.60 profit seems pretty good, but remove income tax from that too.  Now it's $1.95.  $700 of hardware churning away to produce $1.95.  Still a profit, but not exactly stellar.  $1.65 after today's difficulty increase. 

The final complication in the calculation is that power here is tiered.  The more you use the more additional kilowatts cost.  Having one PC burning through 300kWh per month puts my bill into a higher bracket for each additional kilowatt, so I would be paying around 27c/kWh to power other appliances.  Cooling costs haven't been factored in as the waste heat (nicely warms up a room) isn't a problem right now due to the season.  Come summer time however and that $1.65 profit per day would be lower still.

Holy shit..  another sky is falling Angelus post..

Angelus is just one of those kids that likes to feel important by making hundreds of threads for their alterior motives and sky is falling posts because he likes to read his own text on the screen..

He's got his own soap box message board now, where he can post all he wants and reply to his own thread over and over again.  Vanity, some people like to look in the mirror, others like to create their own message board to admire themselves

Except that I got my first computer 6 months before I learned how to drive -- which was in 1992 (before many of you guys were born!)

I started a forum because this one seemed to be complaining about the number of members/posts, plus Bitcoin.org was *very* slow until about 1 week ago.

But flame away, you seem to have a psychological need for it.
I guess it bolsters your insecure, young ego to rip on people. It's classic 2nd grade behavior: "cut others down to make myself feel bigger".