Bitcoin Forum

I am new to btc and just recently bought $20 worth of btc to bet sports just for fun. I am a noob but i have a value trackerwidget on my tablet and the value has been dropping the past week a lot. I am just wondering if someone can briefly explain the cause of this at the moment?
When I look at the chart it looks like it reached its peak and has been generally decreasing. Will it ever go back up?

There is a bunch of news surrounding bitcoin.
Conduct your own due diligence.

The reason I am asking is because I can't find out what is currently causing it, this is me "conducting my own diligence". Can someone link me to an article?

- mining difficulty
- btcguild being shutdown
- sheep panic selling
- whales dumping

etc, etc.

Thanks, I guess that's what I wanted to know, I will look into those.

Only one reason really, PoW mining expense

That being one of the main reasons.
Top 5 reasons easily.

I registered to come and ask the same question  >:( I stumbled upon Bitcoin around 4 months ago and only now finding this forum!

The reason the price is going down, is there are more sell orders than buy orders.

Now you need to ask everyone one who is selling why they are selling.  And that's your answer.

Not the main reason at all.
When sell orders are put in, coin is moving from weak hands to strong hands.

Well, if it gets too high, miners drop out and the difficulty decreases and things go back to normal.

like any speculative 'investment', it goes up it goes down, sideways...
it's just the way it is.

Just like the stock market, looks like a big over-reaction.

Welcome!  That is a great reminder:  there are literally billions of people who still know nothing of bitcoin.  Voidful:  Do you have any bitcoin... any at all?

The value is dropping because people are selling their coins at a rate that is lower than what they were previously sold at. It's literally that simple.

Enlarge the time to chart that you will find it is nothing now.

Yes I see it goes up and down but when you look at the big picture over the years it went up once and now is generally going down. There is only one "rise" and "fall" on the  4 year chart.

perceptions change, sometimes rapidly, which is why we end up with rapid fluctuations in the price of Bitcoin

This. If mining costs more than bitcoins, miners actually take bitcoins out of the system to pay for their electric bills.

So if bitcoin has a market cap of $1 billion and electricity costs are $500 million, miners will actually pull $500 million worth of money out of bitcoin.

Amazing huh?

And if the electricity costs are over $1 billion...the cost of bitcoins will go negative and anyone using bitcoin will actually be paying to use it.
 :o


Or, more realistically, if miners are selling all of their coins there is a built in maximum inflation built into bitcoin which can easily be eaten up by the influx of new users.

We're in a strong technical down trend. And while the infrastructure around and trust in BTC is growing, the fundamentals may not justify the price at present. The fact is that mining farms are still making bank selling at the current rate, and until demand begins to outweigh this sell pressure (added to by merchants and bag holders), we will continue to down trend. With bumps and valleys along the way.

No, there is more than one rise and fall, but the last rise went so high that the previous ones are almost imperceptible when viewed on a multi year chart. The red arrows on the one below show three rises.

http://s15.postimg.org/dt7grns7f/price.png

https://www.coindesk.com/price/?bpi=bpi

If you zoom in on each of the smaller rises you can see they were actually quite big. Here's the 2011 rise zoomed in on the coindesk chart.

http://s8.postimg.org/de611fch1/price2.png

What's different about the recent Nov 2013 bubble is that it has taken so long for the bubble to unwind. The bubble is still deflating 12 months later, whereas before full deflation occurred within 2-5 months.

This is important as it is resulting in changing attitudes. There were always those who lost a load of money, but at least they saw the market improving within a few months, and if the HODLed, then they recouped their losses. But now those who foolishly bought at the peak are still seeing further losses 12 months later, and are wondering whether they should try to save what little value they have left.

I believe this stretching out of the decline period reflects that the market is now more dominated by zombie-like HODLers, who keep their positions, and even buy small amounts more, limiting the inevitable post-bubble price declines to a snail's pace. Meanwhile, the price remains high enough to fund miners production of ever more BTC.

The problem with this, is that for the rest of the world, BTC means slow decline. No one wants to use it for payments, as now they expect to lose value whilst holding BTC. The slow decline is undermining the true value of BTC, which is in its functions as a means of transferring value between people. The slow decline is also wiping out the speculative opportunities.

Bitcoin mining is just too expensive to sustain this price.

If not enough new money will flow in, then value will be taken from the existing coins to feed the abomination that called is bitcoin mining
That's one of the reasons why there can't ever be any stability with bitcoin.

How many existing bitcoins are required to pay for bitcoin mining?

I've often wondered what would happen if bitcoin dropped so low that it quickly became unprofitable to mine. Would all the miners just pack up and cut their losses?

A good question, but it's better to calculate the cost of sustaining bitcoin mining in dollars.
I don't currently have much time, but I'll try to draw some calculations on how much exactly sustaining it's mining costs. And that should include the point that the owners of mining equipment eventually want to see ROI.
If someone has more time, then I would be clad to see some calculations on how much does sustaining bitcoin mining actually costs.

It has already dropped this low to those who run older ASICs. I think that most miners are accumulating coins and hoping for a better future, while covering losses with their own money. But speculators also know this and they know that miners can't hold on forever. And the longer they have to accumulate their coins, the bigger the avalanche will be.

Perhaps you can show me how the bitcoin exchange price is related to the cost of mining in any way whatsoever?

How much mining supply actually is sold on exchange or OTC?

I would be interested to see your calculations of global mining costs to maintain the network also.

:)

Mining cost is not static though, from what I have observed over the last 4 years, mining cost roughly always trying to approach 10% of the Bitcoin marketcap, that seems to be the equilibrium point. So no, mining cost will not be at 50% of marketcap and it's impossible to be at 100% or more.

But your claim was that value is taken from the existing coins.

The current amount paid to miners is 3600 bitcoins or just over a million dollars per day if every miner cashed out all of their bitcoins. Personally, I see mining as a good way for people to "buy" bitcoins without the need to go through an exchange. You pay fiat for electricity and receive bitcoins. I know here in Europe there is a high demand for bitcoins such that people are willing to pay 20% over the bitcoin price to get their euros to bitcoins via localbitcoins.

The inflation rate is fixed. It cannot go over 3600 bitcoins. So even if mining costs $10 trillion per day, the inflation rate cannot go over 3600 bitcoins per day. And with that knowledge, it is already built into the price.

There are many factors to take in consideration, there's not just a simple answer to your question. We had a couple of years of tremendous growth, some sort of rest was what the market needed. Bitcoin is young and there are few players who can really play this market one way or the other, I deeply hope this phase is an opportunity for redistribution of wealth and that many take advantages of the low prices to enter the market.

My take:

There are, roughly speaking, two broad factors influencing the BTC market price.

There's the supply and demand dynamic of inflation (3600 BTC added to the ecosystem daily, currently) and demand from people using BTC to transfer value (buying goods online, remittances, what have you.) You may think of this as a baseline for what a bitcoin "should" (huge scare quotes here) cost at any given time.

Then there's the dynamic of speculation, where traders look to capitalize on their ability to forecast the price movements. Mostly, people are not very good at this, but many act as if they were. There are long-term holders who, believing in the utility of Bitcoin, hoard their coins in anticipation of future profits as adoption grows. Then there are traders, who bet on the price going one way or the other and buy or sell accordingly. Also, although you might call these a subset of traders, there are people who buy (or short sell) well into an established trend, simply believing that since the price has gone up (or down) for a time it will surely keep doing the same. They tend to amplify large price spikes and, I expect, suffer bad losses in the process.

At any given time, the relation of these macro-scale factors in determining the price is unknown. The latter, speculative use, will tend to cause the price to fluctuate heavily around any larger trend that might, somehow absent speculation, be hypothetically determined.

TL;DR: No-one knows what a bitcoin should cost at any given time. People invest based on previous price action more than anything else. This creates feedback loops that lead to unsustainable spikes and crashes, but no-one can tell you when a fair price has been reached. Caveat emptor.

Yes, that's exactly right. Miners need to be paid and they need to be paid in dollars. Miners are expecting ROI on their initial purchase of equipment + the cost of electricity. Some of them are wealthy enough to pay the loss that they are getting, but considering the how idiotic it actually is to try to make money with bitcoin mining, then I dare to doubt that most of them aren't exactly wealthy. This in turn means that they have to sell their coins to get anything out of their investment. And those who can hold up because they can cover their losses from personal wealth, can also only hold up for some time before they dump and move on to better prospects.

Mining has almost always been the an very unprofitable way to acquire coins. People that used their money to buy coins directly, not by buying mining equipment, got 2x+ more coins then the miners will ever receive. Bitcoin mining only made sense before asics and before the market cap. reached over a 100 million. When bitcoin was small enough and not considered to be have much utility value, then these things didn't matter. But when the network got bigger, then the veil was lifted that bitcoin mining is a game for fools. And the bigger the network would get, the more transparent it will become on how idiotic pure PoW mining exactly is.
A system that eats increasing amount of resources without offering anything in return. The bitcoin network doesn't improve in any way with the increased amount of hashrate. It's like wasting money to pay someone to run around in circles. PoW is already idologically flawed because it rewards useless work. Financial development is about rooting out the useless leeches, not to reward them.

3600 new coins a day, no matter what.

Other question: Is mining maybe too profitable?

Less inflation (faster rewarddecrease) would have resulted in more stable and higher prices by now. If miners had less coins to sell they would get higher prices for it. With centralisation of mining most coins are dumped. From my standpoint bitcoin is not ideal in that regard. It is more volatile than it would have to be.

Don't forget that if you bought in the first week of June 2011, you wouldn't have been back in the black until the end of February 2013. That was much longer than 12 months. It's true, however, that it only took 5 months to find the local bottom in 2011.


It's funny that this made me think of the dollar. Of course, the dollar's slow decline is much slower. :)

It does improve the higher the hashrate. Bitcoin becomes even more secure the higher the hashrate. Security is a huge benefit that is desired in a currency.

Again...there is a maximum amount that PoW takes out of the system. 3600 bitcoins per day. Even if PoW costs $10 trillion per day, miners will not be taking more than 3600 bitcoins per day. This number is a known increase in inflation known since the beginning of Bitcoin.

We all know that the maximum will be 21 million bitcoins and that currently there are only around 13 million. We all know that we will get 8 million more bitcoins before the maximum is reached.

The increase in hashrate doesn't improve the security, because the network is pooled together in single points. You only have to compromise couple of pools, to get 51% and attack the network. It doesn't matter how much hashrate is backing those pools. All the security is currently in the hands of pools.
Security and hashrate were tied together in the time of solo mining, that was the initial idea of bitcoin. Pools ruined this initial idea.

The amount of mined bitcoins is fixed, but the dollar value of bitcoin isn't fixed. Miners want at least the same amount of dollars back, that they have wasted with mining. The more expensive mining gets, the more dollars are needed to sustain the network. If not enough new money will flow in, then mining will start to eat the dollar value that has been put into BTC in the past. And this will cause the price to drop.
I hope that this time I made myself clear enough.

This is the part where we have a disconnect. Like I said, mining could cost $10 trillion per day but the miners cannot take more than the value of 3600 bitcoins per day (currently just over $1 million). This is the limit to the cost of mining on the price.

We already know that new money needs to flow in to account for the 3600 bitcoins per day. That is factored into the price.

If mining costs $10 trillion per day, then bitcoin would have to cost $10 trillion / 3600 = 312 500 000$, and to sustain this price, bitcoin would need to increase $10 trillion dollars every day. If it won't get this amount, then it will take it from the present market cap.

Miners will take their wasted dollars back one way or another, if not enough new money enters, then they will eventually just dump and settle with what they can get. That is the reason why overheating of PoW mining can eventually destroy the entire market. When the upkeep of the network becomes too expensive for the market to handle, then it can destroy any chances of profitable speculative play.

This is completely wrong.

Perhaps this is why people think PoW is bad.

If every miner takes the 3600 bitcoins and cashes them out each day, it does not matter if the price is $1/BTC or $300,00,000/BTC. They cannot take out more than 3600 bitcoins.

The only way this is possible is that if you assume that the miners have a buttload of bitcoins that they have been hoarding that they will cash out. Which..once they cash out...would lead right back to only 3600 bitcoins per day.

The bitcoins they take will be converted to dollars.
Can you understand that?

Yes, worst case scenario...3600 bitcoins per day are converted to dollars by miners.

Dollars were wasted by mining, so dollars are needed for profit or at least ROI. Those miners who are wealthier, can hoard bitcoins for some time, with covering the losses from their own wallets. They can just accumulate and hope for better times, but no one will indefinitely wait and accumulate. Standard business practices is that you don't wait very long on a bad investment, with throwing more money at it. You cut your losses and move on. The more coins that will accumulate for better times, the bigger the avalanche will be when hope will finally fracture.

Bitcoin is also a promise of value. Right now 1 bitcoin promises you about 323$ of value. If there are too many people who are expecting promised value, then there is ability to fill these promises, then a crash is inevitable and can only be postponed.

All true.

It still does not mean that high mining costs take more out of bitcoin than 3600 bitcoins per day.

If miners are losing money, it will not lower the price of Bitcoin.

I haven't said that high mining costs take out more bitcoins then 3600. I told that high mining costs take out dollars from the bitcoin market, also meaning the value of one bitcoin. This is what I have been trying to explain..

Higher cost of mining rises the amount of dollars that miners need to take out of the market.

FTFY

If the cost of mining is $10 trillion per day and the cost of 3600 bitcoins is only $1 million. Miners will only be able to re-coup $1 million of that $10 trillion cost.

They need it if they wouldn't want to operate with a loss. And I can't imagine anyone wanting to operate with a loss.
As said before, some people can operate a little longer with paying for the losses from their own wallets and some people less. But eventually everyone will face the inevitable.

If an coin would cost 10 times less to mine, then there would be 10 times less the need to convert the coins to dollar. That coin wouldn't be so addicted to constant growth and it could handle stability during times when the flow of new money is scarce.
PoW mining is artificially making something expensive that should be cheap, by adding the cost of useless work. Useless work shouldn't be rewarded. The future of money is in efficiency, and PoW mining is far from it.

This is why mining difficulty follows the cost, not the other way around.

When the price drops, difficulty drops. People stop operating at a loss.

Mining cost does not affect Bitcoin price. Bitcoin price affects mining output.

Have you even looked at the charts for 1y difficulty increase and compared it to the price movement?
I can't tell anymore if you are trolling me or being serious.

If the price has dropped, then difficulty has still increased. People need their ROI with initial equipment purchase. If operating the machinery costs even a little less then electricity, then miners will continue, to at least make some money back from.their initial investment of buying the equipment. And they operating will cause the selling pressure as described above.

https://en.bitcoin.it/wiki/Myths
Bitcoin Myths:

The value of bitcoins are based on how much electricity and computing power it takes to mine them
This statement is an attempt to apply to Bitcoin the labor theory of value, which is generally accepted as false. Just because something takes X resources to create does not mean that the resulting product will be worth X. It can be worth more, or less, depending on the utility thereof to its users.

In fact the causality is the reverse of that (this applies to the labor theory of value in general). The cost to mine bitcoins is based on how much they are worth. If bitcoins go up in value, more people will mine (because mining is profitable), thus difficulty will go up, thus the cost of mining will go up. The inverse happens if bitcoins go down in value. These effects balance out to cause mining to always cost an amount proportional to the value of bitcoins it produces.

A sampling of charts. Difficulty (blue) goes up after price rises. Difficulty comes down after the price crashes.

https://i.imgur.com/Lvf9d.png
https://i.imgur.com/TzkhK.png

Re. "useless work":  Bitcoin is butting up against the main problem of algorithmically-determined inflation--it's hardwired, and thus by definition can't adjust to change.

Mined coin=inflation rate of Bitcoin's monetary supply.  When Satoshi chose the block reward halving rate six years ago, he had to guess the future state of Bitcoin economy.  Literally guess.  The real economy, fiat economy, constantly adjusts the inflation of the monetary supply.  I'm not sure how many here fully appreciate the gravity of this shit.

This is the reality after ASICs:
http://oi59.tinypic.com/2hreusy.jpg

The cost of network rises and the value of coin drops.
Anyway, I think that we're done here.

ˇ

Yeah, I think that most of the users here aren't exactly educated nor experienced in the world of finance. Fixed coin supply can never offer stability. Coin supply has to be dynamic to be on par with the economy, that is dynamic. Supply has to be regulated with the availability of resources, so that money can keep stable value. And without stability, money has very little use. The main characteristic of a low quality currency is instability, because it's almost impossible to make any solid plans when you rely on a currency that's value can't be predicted. That's why bitcoin is more of a gimmick and a lot more development has to be done before open sourced monetary systems become truly practical.

Exactly to the point there, in my opinion.
That's why we're probably going into nothingness on this experiment, as interesting and inspiring as the concept might be...

That's why the best monetary systems regulate the price level, by targeting a certain rate of inflation, whilst ignoring everything else.

bullshit. Just cut the inflation. Your conclusions are wrong. You don't need a variable coinsupply, you need a lower inflation.

Thats not the reason but is a big part of it. The reason the price is dropping is because one the price never really went that high, it was really just because of manipulation at the mt gox. exchange, see this report (willyreport.wordpress.com/) and secondly the price is falling because it was sold to the public as a currency which it is not, bitcoin is a digital collectible it is the equivalent of a digital baseball card and you cant price an economy in baseball cards.   

i said it on the other thread. I say it here again:

mining becomes centralised, small miners are driven out of buisiness, few large miners dump harder than many small ones would, thus the price drops more, the competition becomes harder, more are driven out and thus centralisation is enforced more. This is a spiral with no way out.

It comes down to: 3600 btc a day was too high inflation.
Less inflation would have provided more stable prices, higher prices and less centralisation in mining.

This volatility is caused by the inflation. People say you need the coins to secure the network. Guess what: if miners would get less coins a day the price would be higher and it would be about the same for them.
Now you have the situation where the network is driven by incredible hardware and electricitycost - way more than need to be.  These days nobody in their right mind would want to buy bitcoin because it's really just a miners-scam to make the miners rich.

read my lips: Inflation leads to destruction of wealth and centralisation. There is no excuse for it. Inflation is poison - you should know that!

lol @ the idea of bitcoin with variable coinsupply. lmao
Fiat is better than that for sure

Price stability requires an elastic supply, currency is a system of measurement, we dont limit the number of inches and we shouldn't limit the number of units of value.

lol, good luck with that.

I disagree. Pricestability does not need central planning, it just need lower dilution of existing coins (aka lower inflation).
Bitcoin is not designed to hold its value, it is designed to be volatile.

Lower dilution of coins (lower inflation) would lead to better properties in holding value and thus to shorter bearmarkets. Bubbles would still occure and pop but it would come back more reliable and quickly.

Go ahead and relaunch it with central control of moneysupply and see if you can get that sold.  ::)

What you are actually basically saying is: "bitcoin has failed because it has no central control and the FED is doing it right"
Can't be serious.

That is what you are saying. I am saying the USD and bitcoin are both failures because they both work on the same principles. The miners are the central issuing authority, soon to be two brothers alone. https://bitcointalk.org/index.php?topic=377701.0

  Two Kinds of Money

1.The Scarcity Model: A single uniform quantity in limited supply made valuable by its own scarcity.
In other words, the value of this type of money depends on the supply of, and demand for, the money commodity itself. Conventional definitions of money define money only in terms of this model, a "medium of exchange". Examples are: cowries, gold and silver, fiat cash and coins, bank credit, and now, in the model's purest and most spectacularly speculative form, Bitcoin.

2. The Abundance Model. A promise of something specific from someone specific made valuable by its redemption in real production. The value of this type of money is defined by the promised redemption in goods and/or services. As such, this type of money is promises of an indefinite number of non-uniform commodities in indefinite supply and, unlike the limited quantity "coin" concept of money, the total quantity of these credits in circulation does not affect their value, because the value of a credit is defined by what its issuer will redeem it for in real goods and/or services. Examples are: business-to-business barter credits, customer rewards, travel points, discount coupons, mutual credit systems

so what other can be the solution than dramatically lowering bitcoins inflation/ new coins per day?

The high inflation enforces centralisation. Lower inflation would mean less competition amongst miners since they would not be a main marketforce anymore.

I'd say: bring the impact down of what miners can do to the markets each and every day and you'd reap a more decentralised network and more stable and better prices.

It is a fault in bitcoins design to have miners being a burden on the market for such a long time. (just my 2 cents)

miners have too much power over the markets, trade and price. Too much money is extracted by them. It's not their fault or the fault of hardware manufacturers, it's the fault in the specs. To break it down to one sentence: Halving takes too long.

Sublime5447: The abundance model sounds like a great way to create a cascading credit crisis to me. Kind of like Ripple. What am I missing?

The credits must be redeemable, you can only issue credits that you have the ability to redeem in good or services. It would have to be tied to a reputation keeper.

Coins would be issued into existence instead on being created through mining.

Relax man, some early adopter in this moment solding its bitcoin in quantity of 100 bitcoin in way to not super-decreasing the price.

which doesn't provide any security for the network, it does just bring in central control. So really brilliant idea right there  ::)

How are you doing transactions without miners? Go POS-coin? (lol)

.@smalltimer:  Could you explain why large block rewards encourage centralisation, while smaller ones discourage it?  Buying mining gear in quantity will still be cheaper, building megafarms in cold climates with low industrial energy costs will still be cheaper.
What am I missing?

sure, large rewards give miners in general more power over the market and the big ones of course dump harder enforcing competition making monopoly-process even faster.
Right now large miners dumping making it even harder for small ones to exist.

IF miners would not be such a force/impact on the market they would only compete on the level you pointed out and not directly in the markets.


On top of that: bitcoin would be less volatile, would hold value better and would attract therefore more investors.

PLUS: if halvings were faster, inflation lower and valuation better miners would be holding the coins they mine because appreciation in price would be anticipated.

So really the high inflation in bitcoin is a deadly mistake

In bitcoin right now it is: "who can offer more cheaper to drive the others out of buisiness?"
only possible because they are allowed to mine significant number of coins every day.
if they were given less power over the market this effect would be contained.

Can you expand on that? I don't see how you could 100% guarantee an issuer has the ability and willingness to redeem the credits they issue.

Nothing is 100 percent sure, it is not my proposal, it is Paul Grignon's (the creator of money as debt)

Link to proposal http://www.moneyasdebt.net/

https://www.youtube.com/watch?v=XyWfUqEyIZc         it is important to note that perpetual coin is just the standard and does not circulate.

OP, don't worry about bitcoin value drop
bitcoin is on the way to a stable growth and in 2015 you will see bitcoin's value increasing
current price dropped bcoz of some international financial decisions

Current price is down because of lack of knowledge, fear and general lack of interest. We'll see.

if you look at the charts: who can be selling coins with profit right now? Only miners or people who bought before last November and i tell you it's the miners.

Large rewards are equally large for both hobby and commercial miners.  If small rewards are sufficient to make small farms profitable, surely they're sufficient to make big ones profitable also.  Hashrate eventually increases to the point of making small mines unprofitable, while large ones continue operating.
Just what we see happening now.


This in no way affects centralization.


Either the notion of "we need all the hashpower to make network secure" is junk, or Bitcoin will also be more vulnerable to attack [potentially making it less attractive to investors].


Again:  Lower rewards = lower network security, higher rewards = higher network security.  This is the basic premise on which Bitcoin network was built.  In hindsight, it's easy to say that miners should not be rewarded as much as they are, but, at the outset, it wasn't.  Which brings me to my original point:  In fiat economy, it's possible to adjust to predicaments like this, in Bitcoin it is not.  

In other words, if I agreed with you that block reward is too high, we could do something about it, like make it smaller.  As it stands, there's nothing we can do, short of scrapping Bitcoin and starting from scratch.  Making all this just empty rhetoric.
See?

there is the logical fault.

"Lower rewards = lower network security, higher rewards = higher network security"
is not 100% correct because:

"Lower rewards also = hgher pricestability, higher scarcity, higher valuation and ultimately = more investement" which in turn makes mining more profitable (more network security)

I'd say at the point where real investement happens (real money comes in) it doesn't make so much difference for the miner if he mines less coins and sells them for more or mines more coins and dumps down the market. It is just: the miners dumping constantly keeps away investors , makes mining unprofitable, causes centralisation faster and in the long run makes network less secure maybe even (would remain to be seen)


also: lower rewards/inflation gives additional sellingpoint for the coin. Right now with 10% inflation btc is no competition to fiatmoney of the western world only to countries with higher than 10% inflation.

You seem to be overlooking the important bit:


TL;DR:  There's nothing you can do about Satoshi's mistake now.  That's the fatal flaw of predetermined inflation.

right now you need a sustained growth of 10%+ annually of the userbase only to hold value.

inflation = necessary growth of the userbase-money to hold value (no matter what the valuation/marketcap is)

my approach would be "make inflation reasonably low and let the free market sort out the rest"

satoshi made a little mistake there with the rewarddecrease. Didn't foresee the marketforces on high marketcap correctly.

There is now the option for the community to go through it with pain for the next 6 to 10 years or to correct that either in bitcoin itself or in form of an altcoin/new coin that offers an solution to that.  (my 2 cents)


(was edited)

^Just a minor correction:  A "centrally controlled elastic reward" would make Bitcoin irrelevant.  The cool/interesting thing about Bitcoin is it doesn't rely on central authority.  With centrally-controlled elastic reward, that's gone.
Just a clumsier version of fiat.

This is probably true, I know very little about economics. That is why I posted this thread in the first place so you guys can explain it. I have been learning a lot reading through this.

The reason why its dropping is because of miners. They keep dumping and dumping to pay for their rigs. Also GPU miners are suffering also.

There has to be a halving soon.

GPU miners? Wtf? Is it 2012?

Sorry noob question here... What does halving mean? Why will there be one soon?

Block reward halving, meaning the miners will get 50% less coin for solving a block.  This makes mining less profitable by decreasing BTC inflation, which is ~10% now.  It will happen sometime in 2016.

Electrical costs of generating are matching costs of production
Without any other marginal benefits
So guess its close to par for now.

About every four years, the amount of bitcoins mined per block is cut in half.