Bitcoin Forum

Will we see BTC at 1$ in the next few weeks?

$1.25 is the bottom as long as difficulty is over 1.5 mil.   If difficulty nosedives a la namecoin there is no bottom.

Total BS. Can you backup your claim please because ATM it sounds like nonsense. Price is NOT linked to difficulty.

the poll should be modified to under "0.000000000000000001" :D

Just let us talk about Silk Road again!!

Nonsense. The difficulty is -indirectly- influenced by the BTC trading price, not vice versa. BTC price is not influenced by the number of miners or difficulty at all; the number of BTCs created is constant regardless. The opposite is true, if bitcoin value goes down, more people will find their mining not profitable, stop mining and therefore difficulty will go down to. The same happens when bitcoin prices go up, although there is a ceiling, the number of miner rigs is not unlimited.  Either way, none of this influence BTC price.

Thats not say there is a bottom; because there isnt. Current bitcoin price is 99% speculation and 1% demand for actual trade (most of which is probably drugs). Until that changes and bitcoin becomes a real currency used for trade, there is no bottom. If it does over time become a real alternative to paypal&co, then there is no ceiling. Anything inbetween is pure speculation, guessing, hoping and fearing.

Cost to produce has some bearing on bitcoin exchange rate.   When it's trading at $32 and cost to produce is sub-$1 people go long through mining operations.  Not much new meat will direct buy.  When it's trading significantly below power cost some % of miners may sell rigs to buy directly.  New meat will direct buy.

Of course it's speculation.  There's just more than one way to play.

Fail:

Bitcoin is inherently only divisible to 8 decimal places.

That creates way too much overhead. Optimists will just stop mining and hope for better times, and pessimists will sell the rig and never think about bitcoins again.

Doesnt make sense to me. You say mining at good profitability would somehow satisfy a demand for bitcoins and that would be different if mining is not profitable, it  doesnt matter how many people mine with how many rigs, the rate at which they are produced remains constant. That miners would buy low is no different than anyone else buying low.

I'm quite sure I've heard Gavin say that divisibility to 8 decimal places is not inherent to the protocol and could be extended if the need arose.  Granted, it's difficult to imagine there ever being a need for more than ~2 quadrillion units.  I'll see if I can dig up a source for you...

The current version of the protocol is hard coded to 8 places, so adding more places isn't super simple, but it certainly is possible.  I fully expect that we will upgrade from 64 bits to 128 for technical reasons long before it becomes economically desirable.

There is no point in adding more bits. There can only be a certain amount of transactions in a block, and that forces miners to either charge a fee for all transfers or filter out the ones that are very small because of spam attacks. Either way there is no point in trying to transfer very small amounts.

I expect it to take some time.

But as christmas with christmas expenses and holiday approaches and people have other things to care about. Price will go down.

Exactly like last Dec thru Feb...

A drop from $5 to $1 will take a similar change as a drop from $20 to $4, in otherwords, it will take at least a few months to do it, not 3 or 4 weeks.

One would expect that. But that's not what Bitcoin has been doing. It's been declining linearly for the last 3 months, at $4 per month. 
http://bitcoincharts.com/charts/chart.png?width=640&m=mtgoxUSD&k=&r=90&i=&c=0&s=&e=&Prev=&Next=&v=0&cv=0&ps=0&l=0&p=0&t=S&b=&a1=SMA&m1=30&a2=&m2=25&x=0

Obviously that can't go on, since the price would go below 0 some time in late October. The endgame isn't clear. It will really be over when the exchanges shut down due to lack of sufficient commission revenue.

I don't think that is going to happen soon (at least not as soon as the big drop from $4). Volume in currency has been constant and the fees are a percentage so it doesn't really matter what the price of a bitcoin is:
http://bitcoincharts.com/charts/chart.png?width=894&m=mtgoxUSD&k=&r=90&i=&c=0&s=&e=&Prev=&Next=&v=1&cv=1&ps=0&l=0&p=0&t=&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&SubmitButton=Draw&

+1 They are like the casino. They always win.

Multiply coins times current dollars to estimate the exchanges cut fiat currency.  Paying for power, servers and bandwidth (not to mention salaries) in bitcoins is a difficult proposition at the moment so their lifeblood is real currencies.

For example, for 30k coins at .6% commission:

$30 = $2700 a day
$10 = $1800 a day
$5 = $900 a day.
$1 = $180 a day.
10c = $18 a day
1c = $1.8 a day

Volume hasn't really changed much as prices dropped.   So at some point if the prices stagnate long enough it may become uneconomical to run an exchange.  And at that point selling accumulated coins won't help much either.

heck to the no,
willing to bet on this?

Sure, I'll bet, we can use moonco.in!  Oh wait...

The chart above does that. It looks like volume in dollars is slowly declining, except on days when Mt. Gox has a screwup, the price changes dramatically for a brief period, and frantic trading results. Volume isn't declining as fast as the price, though.

(Much of the bot-driven trading may be by parties paying very low or no commissions. Otherwise, all those trades on tiny moves would be unprofitable. So it's hard to tell how much money Mt. Gox is making.)

The number of BTCs created is constant, but the distribution of those BTCs is not.

Difficulty/# of miners absolutely influences price.  If BTC is worth $10 and and you have 10,000 miners receiving payouts, then the distributed average of USD payout to each person in BTC is 5 cents.  If you have 100 miners, the distributed average of USD payout to each person in BTC is 5 DOLLARS.  The 100 miners will sell their BTC faster than the 10,000 miners will sell theirs.

In other words, more miners = longer time it takes to accumulate enough BTC to reach a psychological selling point.  This absolutely influences price.

Yes, I know that to a degree the price will influence the number of miners and hence difficulty as a result of electrical costs and what not, but that's kind of the point as well...it's not a one way street.

Nonsense. On average it will be exactly the same as not every miner sells and the average amount each miner has in its wallet is extremely unlikely to be significantly different. No one is selling every 0.05 BTC. Besides, even if there is a some miniscule effect (which I doubt) it will be so marginal its completely noise and has nothing to do with the current price, as its not miners driving the price, but speculators (and tiny teenie fraction for actual transactions). If it was miners, the price would be.. zero.

Just wait.

In all seriousness, most of the mining power joined in June and July.   Like me these aren't early adopters.  Our vested interest is not in making Satoshi a multi-billionare ASAP, it's making $ now.  While previously a small % of mined coins made it to the market (the first bitcoin hack only saw 500k coins in mtgox's trading account, with about 6M mined) I'm betting 75% of the mining power would like to pay off their rigs and power bills before speculating.

That's why we went from selling ~10% of the mined coins to around 30% in the space of weeks.

Last time mtgox feared being hacked they moved 700k coins around.   One way or another 200k coins made their way to mtgox over that time.

Yes, speculators are the ones with fiat currency, and they by definition determine how many dollars each bitcoin is worth.  But increasing the supply via selling a larger portion the "new" miners are definitely a factor.

Were did you get those numbers?

Thats not how an investor works.

Dont think most investors sets out to buy 10.000 coins. They invest x amount of money, its just that they will be getting or selling more Bitcoins.
So the amount of money should be the same.

If Bitcoins go down in value to half, the amount traded should double, otherwise it probably means that people are investing less in bitcoins.
That likely indicates it will go down even more in value.