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Title: last weeks big fluctuation Post by: novalia65 on October 26, 2011, 09:26:53 PM I am new in this world of bitcoins...I have been reading for a while and now I have a better idea about how this works, but there is one thing I don't understand yet. Bitcoins are only mined, right? I have read there are a limited number of bitcoins in the "mines" (or blocks). But how bitcoins get its value against other currencies? I guess it will depend on how much a person would be willing to pay for 1 btc, right? Then why did it fluctuate so much in the last days if there is an "stable" bitcoin production by the miners?
Hope someone can en-light me, maybe I am asking a donk question, but I don't get this part yet. Title: Re: last weeks big fluctuation Post by: Etlase2 on October 26, 2011, 09:38:23 PM No, you are not asking a donk question at all.
Bitcoin's price is based on supply and demand. As a limited number of bitcoins are produced per day, they are scarce. Scarcity is one of the properties that gives a currency value. However, since demand is based only on how many people are willing to buy what is for sale and the bitcoin market is currently very small and easily manipulated, the price is very volatile. It was over $30 USD per BTC in June, primarily because those with a lot of coins chose not to sell any. Title: Re: last weeks big fluctuation Post by: novalia65 on October 27, 2011, 12:13:36 AM Yes, pretty much the idea I had. Then it is supposed that when all the bitcoins have been mined, price will be stable based on true demand - supply basis, correct? But until then, we need some kind of measures or regulations (not based in a central entity) to avoid speculation with bitcoins, because it is truly affecting Bitcoin's growing and its reputation as an alternative currency.
Title: Re: last weeks big fluctuation Post by: klaus on October 27, 2011, 02:47:30 PM more buyers get the price up, more sellers down. Title: Re: last weeks big fluctuation Post by: memvola on October 27, 2011, 03:12:49 PM Yes, pretty much the idea I had. Then it is supposed that when all the bitcoins have been mined, price will be stable based on true demand - supply basis, correct? But until then, we need some kind of measures or regulations (not based in a central entity) to avoid speculation with bitcoins, because it is truly affecting Bitcoin's growing and its reputation as an alternative currency. It doesn't depend on what percentage of coins have been mined, but rather how deep the market is. "Mining" is merely an inflationary pressure and it's a given, so it's not a source of volatility. What you need is stable demand. An increased number of speculators with different interests and increased commerce means the market will respond faster and stronger to pressure. Title: Re: last weeks big fluctuation Post by: TheManipulator on October 28, 2011, 03:23:26 AM Then why did it fluctuate so much in the last days if there is an "stable" bitcoin production by the miners? Because of me.Title: Re: last weeks big fluctuation Post by: novalia65 on October 28, 2011, 03:38:14 PM you need to elaborate more to join this conversation :)
Title: Re: last weeks big fluctuation Post by: TheManipulator on October 28, 2011, 06:10:53 PM you need to elaborate more to join this conversation :) I've manipulated this conversation enough. |