Bitcoin Forum

Bitcoin => Bitcoin Discussion => Topic started by: slothbag on October 06, 2011, 01:10:10 PM



Title: Too many new coins, not enough new Bitcoiners
Post by: slothbag on October 06, 2011, 01:10:10 PM
Google trends is showing search interest in Bitcoins dropping back to pre $1usd levels, bitcoinstatus charts are showing a gradual decline in users running the bitcoin client.  New posts from the 3 main Bitcoin forums seems to be slowing down, at one stage it was difficult to keep up with one forum, now all three can have no new interesting posts in 24 hours.

Seems to me as the price drops lower and lower people are walking away from bitcoin, and some people are loosing interest.  All that remains are the true Bitcoin supporters that believe it has a future as a medium of exchange.

This is all fine and good with me, a high price is not that important and the get rich quick types can go find something else to play with.  But whats going to happen with the 7200btc per day, or $35,000usd of money entering the economy? Thats still $1m usd (at current prices) that needs to be absorbed per month.

I'm sure like most other longterm Bitcoin supporters, we've probably invested just about all we are willing to invest at this stage, so no new money there..

Let's say we get $1000-$5000 dollars PER DAY (roughly $30k-150k a month) from new Bitcoin enthusiasts who just found out about or decided to invest some cash.. that works out to about 1btc = 0.13-0.70usd.  Obviously some miners will hold onto their newly mined coins, so that estimate will be a little higher.

Still got room to fall? I think so.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: BitcoinPorn on October 06, 2011, 01:14:32 PM
Interesting, I see the big picture as, security first, less economy and mining talk.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: the founder on October 06, 2011, 03:30:24 PM
slothbag,

 I've been bitching about the inflation rate and printing off bitcoins at a rate that would even make the Federal Reserve squirm...  you'll be preaching to deaf ears..    people here won't listen to that type of logic.



Title: Re: Too many new coins, not enough new Bitcoiners
Post by: Gabi on October 06, 2011, 03:45:54 PM
Well there will never be more than 21 millions of bitcoins, so where is the problem?


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: evoorhees on October 06, 2011, 03:51:23 PM
slothbag,

 I've been bitching about the inflation rate and printing off bitcoins at a rate that would even make the Federal Reserve squirm...  you'll be preaching to deaf ears..    people here won't listen to that type of logic.



And you've still never addressed the following - the money printing rate was the same (actually higher in percentage terms) when bitcoins were priced at $0.01 and at $30.  Of all the variables in the Bitcoin economy, the printing rate is NOT one of them. It's perfectly steady, yet you seem obsessed with attributing a declining market price on that aspect. It's as if you're inferring that Bitcoin has lost its way because we're now printing so much money   ::)  

If and when the price rises again, people will start complaining instead about bitcoin being "deflationary" - not printing fast enough. Price rising? "Bitcion will fail cause it's deflationary."  Price falling? "Bitcoin is doomed because we're printing so much money!"

While I love a skyrocketing price as much as anyone, for those who understand the true value of these coins, this falling price is a blessing. Be greedy when others are fearful (although I hate quoting the socialist, hypocritical Warren Buffett).


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: jjiimm_64 on October 06, 2011, 03:55:36 PM

We are all owners of a screw driver with a PI symbol head convincing people to use PI shaped screws.
that is a Great analogy.


"computer, solve PI"  ;)


I am glad to see the price of btc's come down, gives me a chance to mine more as I entered a little late to the party.  

I do not think that the price will drop below the avg cost of electricity to mine them...  if it does..  well we can talk about that then.



Title: Re: Too many new coins, not enough new Bitcoiners
Post by: the founder on October 06, 2011, 04:06:58 PM
slothbag,

 I've been bitching about the inflation rate and printing off bitcoins at a rate that would even make the Federal Reserve squirm...  you'll be preaching to deaf ears..    people here won't listen to that type of logic.



And you've still never addressed the following - the money printing rate was the same (actually higher in percentage terms) when bitcoins were priced at $0.01 and at $30.  Of all the variables in the Bitcoin economy, the printing rate is NOT one of them. It's perfectly steady, yet you seem obsessed with attributing a declining market price on that aspect. It's as if you're inferring that Bitcoin has lost its way because we're now printing so much money   ::)  

If and when the price rises again, people will start complaining instead about bitcoin being "deflationary" - not printing fast enough. Price rising? "Bitcion will fail cause it's deflationary."  Price falling? "Bitcoin is doomed because we're printing so much money!"

While I love a skyrocketing price as much as anyone, for those who understand the true value of these coins, this falling price is a blessing. Be greedy when others are fearful (although I hate quoting the socialist, hypocritical Warren Buffett).

LOL!  I knew you would be the one to reply to this one :)

I did address it...  the printing money rate isn't the same as the adoption rate,  not even close.

picture this, because this is what is happening (i'm going to use simple figures rather than the real ones for simplicity sake).

-------
January - 5 bitcoins printed  -  10 people enter market each wanting 1 bitcoin  - price rises
February - 5 bitcoins printed - 11 people enter market each wanting 1 bitcoin - prices rise faster
March  - 5 bitcoins printed - 20 people enter market each wanting 1 bitcoin - prices skyrocket
April - 5 bitcoins printed - 4 people enter market wanting 1 bitcoin - prices tank
May - 5 bitcoins printed - 3 people enter market wanting 1 bitcoin - prices tank
Jun - 5 bitcoins printed - 2 people enter market wanting 1 bitcoin - prices tank.
------
July spot price -  5 dollars

If it was able to be adjusted

-----------------
January - 5 bitcoins printed  -  10 people enter market each wanting 1 bitcoin  - price rises
February - 5 bitcoins printed - 11 people enter market each wanting 1 bitcoin - prices rise faster
March  - 5 bitcoins printed - 20 people enter market each wanting 1 bitcoin - prices skyrocket
April - 1 bitcoin printed - 4 people enter market wanting 1 bitcoin - prices skyrocket
May - 5 bitcoins printed - 30 people enter market wanting 1 bitcoin - prices skyrocket
Jun - 5 bitcoins printed - 45 people enter market wanting 1 bitcoin - prices skyrocket
------------------
July spot price 50 dollars.


In the above,  by taking action for just one month (April)  and reducing the amount printed it changes the whole dynamics of it...  the end result would still be 21 million coins at the end,  just stabilize it to match demand and keep the asset price growing...  because when people see the price booming more start entering... hence increasing demand.



Title: Re: Too many new coins, not enough new Bitcoiners
Post by: evoorhees on October 06, 2011, 04:35:52 PM
slothbag,

 I've been bitching about the inflation rate and printing off bitcoins at a rate that would even make the Federal Reserve squirm...  you'll be preaching to deaf ears..    people here won't listen to that type of logic.



And you've still never addressed the following - the money printing rate was the same (actually higher in percentage terms) when bitcoins were priced at $0.01 and at $30.  Of all the variables in the Bitcoin economy, the printing rate is NOT one of them. It's perfectly steady, yet you seem obsessed with attributing a declining market price on that aspect. It's as if you're inferring that Bitcoin has lost its way because we're now printing so much money   ::)  

If and when the price rises again, people will start complaining instead about bitcoin being "deflationary" - not printing fast enough. Price rising? "Bitcion will fail cause it's deflationary."  Price falling? "Bitcoin is doomed because we're printing so much money!"

While I love a skyrocketing price as much as anyone, for those who understand the true value of these coins, this falling price is a blessing. Be greedy when others are fearful (although I hate quoting the socialist, hypocritical Warren Buffett).

LOL!  I knew you would be the one to reply to this one :)

I did address it...  the printing money rate isn't the same as the adoption rate,  not even close.

picture this, because this is what is happening (i'm going to use simple figures rather than the real ones for simplicity sake).

-------
January - 5 bitcoins printed  -  10 people enter market each wanting 1 bitcoin  - price rises
February - 5 bitcoins printed - 11 people enter market each wanting 1 bitcoin - prices rise faster
March  - 5 bitcoins printed - 20 people enter market each wanting 1 bitcoin - prices skyrocket
April - 5 bitcoins printed - 4 people enter market wanting 1 bitcoin - prices tank
May - 5 bitcoins printed - 3 people enter market wanting 1 bitcoin - prices tank
Jun - 5 bitcoins printed - 2 people enter market wanting 1 bitcoin - prices tank.
------
July spot price -  5 dollars

If it was able to be adjusted

-----------------
January - 5 bitcoins printed  -  10 people enter market each wanting 1 bitcoin  - price rises
February - 5 bitcoins printed - 11 people enter market each wanting 1 bitcoin - prices rise faster
March  - 5 bitcoins printed - 20 people enter market each wanting 1 bitcoin - prices skyrocket
April - 1 bitcoin printed - 4 people enter market wanting 1 bitcoin - prices skyrocket
May - 5 bitcoins printed - 30 people enter market wanting 1 bitcoin - prices skyrocket
Jun - 5 bitcoins printed - 45 people enter market wanting 1 bitcoin - prices skyrocket
------------------
July spot price 50 dollars.


In the above,  by taking action for just one month (April)  and reducing the amount printed it changes the whole dynamics of it...  the end result would still be 21 million coins at the end,  just stabilize it to match demand and keep the asset price growing...  because when people see the price booming more start entering... hence increasing demand.



That's very troubling sentiment... manipulating the money supply is precisely the reason fiat currencies are destined for failure. There is no legitimate reason to manipulate the price higher and higher. It may provide short term happiness to those holding coins, but it distorts the market signals that free-floating prices provide. Such manipulation would be the end of Bitcoin's value.

The movement of prices are not arbitrary. They allocate and coordinate how resources are utilized. If the supply rate of Bitcoins were restricted in order to assure a constantly rising price, you'd instantly create a speculative bubble, for every investor would buy as many coins as possible, knowing the price will be "managed" upward. The price would skyrocket - but to what end? Are Bitcoins worth $50 right now? Or $1,000?  None of us know. And when that bubble you produce pops, the devastation will be ruinous.

The ability of the price to fall is JUST AS important as the ability of it to rise. Tinker with it one way or the other, and you distort human behavior. If you think you're wise enough to distort it in a positive way, then you're suffering from the same affliction and hubris of all fiat central bankers - believing they are smart enough to know the "proper" market price of any asset. It is folly. And it's precisely because so many fall for the myths of central planning that Bitcoin is so necessary, and so valuable.

The day the money supply is tinkered with (including the derivative rate of such supply), I'm gone. I'll peace out like the Lorax.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: wareen on October 06, 2011, 04:36:55 PM
Who decides when/how to change the block reward? The devs? Mt. Gox? The miners? The speculators? The "manipulator"?
No matter how you craft this system - you will always piss somebody off, resulting in a blockchain split, eventually ruining Bitcoin for all of us.

Bitcoin is a community contract - everybody knows the rules beforehand and everybody implicitly agrees to follow them. If they were different; allowing for some more or less arbitrary intervention at the core system of money generation then you'd deprive Bitcoin of one of its greatest advantages: the fact that nobody can really mess with it.

Monetary policy is a damn hard thing to get right - have a look at governments around the world to see how well they are doing with that. Your thoughts have some merit, but I think you hugely underestimate the greater consequences of breaching the Bitcoin contract.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: nmat on October 06, 2011, 04:45:44 PM
The coin production will halve next year. Just relax and wait. Inflation will go away eventually...


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: Steve on October 06, 2011, 05:10:15 PM
That's very troubling sentiment... manipulating the money supply is precisely the reason fiat currencies are destined for failure. There is no legitimate reason to manipulate the price higher and higher. It may provide short term happiness to those holding coins, but it distorts the market signals that free-floating prices provide. Such manipulation would be the end of Bitcoin's value.

The movement of prices are not arbitrary. They allocate and coordinate how resources are utilized. If the supply rate of Bitcoins were restricted in order to assure a constantly rising price, you'd instantly create a speculative bubble, for every investor would buy as many coins as possible, knowing the price will be "managed" upward. The price would skyrocket - but to what end? Are Bitcoins worth $50 right now? Or $1,000?  None of us know. And when that bubble you produce pops, the devastation will be ruinous.

The ability of the price to fall is JUST AS important as the ability of it to rise. Tinker with it one way or the other, and you distort human behavior. If you think you're wise enough to distort it in a positive way, then you're suffering from the same affliction and hubris of all fiat central bankers - believing they are smart enough to know the "proper" market price of any asset. It is folly. And it's precisely because so many fall for the myths of central planning that Bitcoin is so necessary, and so valuable.

The day the money supply is tinkered with (including the derivative rate of such supply), I'm gone. I'll peace out like the Lorax.
+1 Well said Erik.  I don't understand why this is such a hard concept for some people to grasp.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: FAtlas on October 06, 2011, 05:34:50 PM
More people are leaving the market than are entering while the supply slowly inflates.  The price will keep relatively steady around the current number for a little while longer.  Then one day it will plunge in a selloff then fluctuate for a little while before stabilizing at a lower number.  Rinse and repeat until there are three bitcoiners left at $0.10 a coin, circlejerking each other about how "It's really starting to catch on!" while the constant hum of a white noise mining machine gnaws at the edge of their perception.  They justify the electricity cost by claiming that it's heating their homes during the winter, but deep down they know.  They Know


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: allten on October 06, 2011, 06:13:35 PM
slothbag,

 I've been bitching about the inflation rate and printing off bitcoins at a rate that would even make the Federal Reserve squirm...  you'll be preaching to deaf ears..    people here won't listen to that type of logic.



The market is mature enough to short. I hope you are "put"ing you money where your mouth is.
You would in essence be doing your part to help the bitcoin economy discover the true price even faster (assuming you are correct) which would be very good thing....


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: the founder on October 06, 2011, 06:21:12 PM
I'm not shorting,  I believe in it long term,  just we have to wait till next year at 25 reward to raise it rather than it being done yesterday,  where it would of helped long term.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: tetra4c on October 06, 2011, 06:26:44 PM
Let's hope the technical analysis at http://blog.bitcoinwatch.com/ is right!

One observation - there is a learning curve for using, believing and trusting in Bitcoin. After this last cycle, anyone I talk too *at least* knows about Bitcoin. That's got to be a positive. Eventually, they should become more comfortable using it (hopefully).

Now if people would stop selling their coins the price could actually go up a bit or two!  ::)


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: tvbcof on October 06, 2011, 06:40:09 PM
More people are leaving the market than are entering while the supply slowly inflates.  The price will keep relatively steady around the current number for a little while longer.  Then one day it will plunge in a selloff then fluctuate for a little while before stabilizing at a lower number.  Rinse and repeat until there are three bitcoiners left at $0.10 a coin, circlejerking each other about how "It's really starting to catch on!" while the constant hum of a white noise mining machine gnaws at the edge of their perception.  They justify the electricity cost by claiming that it's heating their homes during the winter, but deep down they know.  They Know

An alternate hypothesis is that the value does something along the lines you've outlined, but the system is used for the things it is currently good for.  Like providing support organizations like wikileaks or occuplywallstreet who have fallen out of favor with the large financial institutions and governments (which are increasingly indistinguishable.)  Over this time the system in increasingly analyzed and hardened.  Also, however, over this time the system is also analyzed for zero-day attacks and media prep work is done.

Then one day a big country pulls an Argentina (in the same way B7 pulled a MyBitcoin) and what remains of the middle class find their ATM's no longer work right.  If that happens, and it does not strike me as particularly far-fetched given the difficulty maintaining stability in the 'official' monetary systems these days, it will be very interesting at least and possibly very lucrative to have some BTC squirreled away.  It's worth putting a bet on...to me at least.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: Mageant on October 06, 2011, 06:42:48 PM
I don't mind lower prices, at least I can buy more then.
It would be fun for me to have early adopter prices since I missed out on them.
But probably I won't get so lucky.
 :)


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: FreeTrade on October 06, 2011, 07:23:29 PM
Slothbag makes a good point - BTC prices are very well correlated with Google Trends - here's the comparison which I present for you on account of Slothbag being too slothful to do it himself.

http://i.imgur.com/PBPj3.jpg


Clearly more interest in Bitcoin equates to higher USD prices. The reverse doesn't quite hold true - high prices and dramatic price changes lead to more stories, and thus more interest. Low prices not so much.

Some advocates will tell you that Bitcoin is a currency and so stable prices are important to encourage merchants to price their goods in Bitcoin.

That's tosh. No-one in their right mind would price their goods in BTC. Bitcoin is a method of payment - it doesn't matter what the price of BTC is as long as there is convertibility - easy convertibility is the important factor, not stable exchange rates.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: 2112 on October 06, 2011, 07:24:46 PM
until there are three bitcoiners left at $0.10 a coin, circlejerking each other about how "It's really starting to catch on!"
I'm thinking that there will be whole temples of bitcoiners using e-meters to discover the "bitcoin-suppresive people" and "operating crypto-thetans". The bitcoinology e-meters will be made by Cassasius out of refurbished VeriFone Vx570 payment terminals.

https://en.bitcoin.it/wiki/Casascius_Bitcoin_POS_system

By that time he will stop accepting bitcoin and only accept FIAT as a part of Purification Rundown.

http://en.wikipedia.org/wiki/Purification_Rundown


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: allten on October 06, 2011, 08:06:05 PM
I'm not shorting,  I believe in it long term,  just we have to wait till next year at 25 reward to raise it rather than it being done yesterday,  where it would of helped long term.

I think your view on shorting is misplaced.
I am extremely Bullish on Bitcoin technology and the value of bitcoins long term; however, if the market value is clearly out of line (high or low) then I feel the duty to put it in place by shorting or buying. Shorting doesn't have to equate with pessimism or negativity. IMO, The success of Bitcoin is not its price, but would be better served to achieve its true market value at a much quicker pace.

What price do you speculate would be able to handle the slow down in adoption rate + current money injection rate?
For me, (without getting into detail) it should be stable between $3 and $4 dollars for the next several months.
I don't have the power to force it there, but I can place my vote and in turn do the market a favor by speeding up price discovery (assuming I'm right).

Seriously, you should provide a FC account option to lend money to reputable exchanges that could use the liquidity to short the market.
The more exchanges that have this option the better. Shorting is a very positive thing for a currency.




Title: Re: Too many new coins, not enough new Bitcoiners
Post by: FAtlas on October 06, 2011, 08:23:13 PM
Then one day a big country pulls an Argentina (in the same way B7 pulled a MyBitcoin) and what remains of the middle class find their ATM's no longer work right.  If that happens, and it does not strike me as particularly far-fetched given the difficulty maintaining stability in the 'official' monetary systems these days, it will be very interesting at least and possibly very lucrative to have some BTC squirreled away.  It's worth putting a bet on...to me at least.

So keeping your money in a system that's losing value in a way unseen since the Zimbabwe dollar is a way to insure against the unlikely chance that somehow there will be a simultaneous run on all US banks because ________?  And at that point people will want to barter in BTC instead of usable commodities such as canned food, water, and ammunition because _______?

You're really going to need to fill in the blanks for me on this one because your hypothetical is on par with aliens landing and establishing BTC as the world currency by force.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: tvbcof on October 06, 2011, 08:38:03 PM
Then one day a big country pulls an Argentina (in the same way B7 pulled a MyBitcoin) and what remains of the middle class find their ATM's no longer work right.  If that happens, and it does not strike me as particularly far-fetched given the difficulty maintaining stability in the 'official' monetary systems these days, it will be very interesting at least and possibly very lucrative to have some BTC squirreled away.  It's worth putting a bet on...to me at least.

So keeping your money in a system that's losing value in a way unseen since the Zimbabwe dollar is a way to insure against the unlikely chance that somehow there will be a simultaneous run on all US banks because ________?

It's a cheap and easy bet, and because I value some of the capabilities that Bitcoin offers at the present time.

I'll spare you the effort asserting that long-shot wacko conspiracy bets cannot pay off.  That contention has already been invalidated in a tangible way to me.

And at that point people will want to barter in BTC instead of usable commodities such as canned food, water, and ammunition because _______?

Capital controls don't necessarily equate the kind of Mad Max world that you are probably imagining.  Most often they are more of a gentle caress, one might say.

Actually I _am_ envisioning a 'Mad Max' world, but it will be at the sub-atomic level where you won't probably notice it so much.

You're really going to need to fill in the blanks for me on this one because your hypothetical is on par with aliens landing and establishing BTC as the world currency by force.

Always happy to help.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: Rassah on October 06, 2011, 09:15:39 PM
Rinse and repeat until there are three bitcoiners left at $0.10 a coin

I wish I had 1/3rd of the Bitcoin supply at $0.10. Not because I want all that bitcoin, but because it's be nice to have $700,000USD worth just lying around.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: the founder on October 06, 2011, 09:26:17 PM
I would rather have 7000 coins at 1000 each,  because people would be clamoring and bidding them up to 1500 each.



Title: Re: Too many new coins, not enough new Bitcoiners
Post by: cypherdoc on October 06, 2011, 11:25:54 PM
slothbag,

 I've been bitching about the inflation rate and printing off bitcoins at a rate that would even make the Federal Reserve squirm...  you'll be preaching to deaf ears..    people here won't listen to that type of logic.



And you've still never addressed the following - the money printing rate was the same (actually higher in percentage terms) when bitcoins were priced at $0.01 and at $30.  Of all the variables in the Bitcoin economy, the printing rate is NOT one of them. It's perfectly steady, yet you seem obsessed with attributing a declining market price on that aspect. It's as if you're inferring that Bitcoin has lost its way because we're now printing so much money   ::)  

If and when the price rises again, people will start complaining instead about bitcoin being "deflationary" - not printing fast enough. Price rising? "Bitcion will fail cause it's deflationary."  Price falling? "Bitcoin is doomed because we're printing so much money!"

While I love a skyrocketing price as much as anyone, for those who understand the true value of these coins, this falling price is a blessing. Be greedy when others are fearful (although I hate quoting the socialist, hypocritical Warren Buffett).

LOL!  I knew you would be the one to reply to this one :)

I did address it...  the printing money rate isn't the same as the adoption rate,  not even close.

picture this, because this is what is happening (i'm going to use simple figures rather than the real ones for simplicity sake).

-------
January - 5 bitcoins printed  -  10 people enter market each wanting 1 bitcoin  - price rises
February - 5 bitcoins printed - 11 people enter market each wanting 1 bitcoin - prices rise faster
March  - 5 bitcoins printed - 20 people enter market each wanting 1 bitcoin - prices skyrocket
April - 5 bitcoins printed - 4 people enter market wanting 1 bitcoin - prices tank
May - 5 bitcoins printed - 3 people enter market wanting 1 bitcoin - prices tank
Jun - 5 bitcoins printed - 2 people enter market wanting 1 bitcoin - prices tank.
------
July spot price -  5 dollars

If it was able to be adjusted

-----------------
January - 5 bitcoins printed  -  10 people enter market each wanting 1 bitcoin  - price rises
February - 5 bitcoins printed - 11 people enter market each wanting 1 bitcoin - prices rise faster
March  - 5 bitcoins printed - 20 people enter market each wanting 1 bitcoin - prices skyrocket
April - 1 bitcoin printed - 4 people enter market wanting 1 bitcoin - prices skyrocket
May - 5 bitcoins printed - 30 people enter market wanting 1 bitcoin - prices skyrocket
Jun - 5 bitcoins printed - 45 people enter market wanting 1 bitcoin - prices skyrocket
------------------
July spot price 50 dollars.


In the above,  by taking action for just one month (April)  and reducing the amount printed it changes the whole dynamics of it...  the end result would still be 21 million coins at the end,  just stabilize it to match demand and keep the asset price growing...  because when people see the price booming more start entering... hence increasing demand.



That's very troubling sentiment... manipulating the money supply is precisely the reason fiat currencies are destined for failure. There is no legitimate reason to manipulate the price higher and higher. It may provide short term happiness to those holding coins, but it distorts the market signals that free-floating prices provide. Such manipulation would be the end of Bitcoin's value.

The movement of prices are not arbitrary. They allocate and coordinate how resources are utilized. If the supply rate of Bitcoins were restricted in order to assure a constantly rising price, you'd instantly create a speculative bubble, for every investor would buy as many coins as possible, knowing the price will be "managed" upward. The price would skyrocket - but to what end? Are Bitcoins worth $50 right now? Or $1,000?  None of us know. And when that bubble you produce pops, the devastation will be ruinous.

The ability of the price to fall is JUST AS important as the ability of it to rise. Tinker with it one way or the other, and you distort human behavior. If you think you're wise enough to distort it in a positive way, then you're suffering from the same affliction and hubris of all fiat central bankers - believing they are smart enough to know the "proper" market price of any asset. It is folly. And it's precisely because so many fall for the myths of central planning that Bitcoin is so necessary, and so valuable.

The day the money supply is tinkered with (including the derivative rate of such supply), I'm gone. I'll peace out like the Lorax.


evorhees is right.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: BitMagic on October 07, 2011, 12:39:26 AM
That's tosh. No-one in their right mind would price their goods in BTC. Bitcoin is a method of payment - it doesn't matter what the price of BTC is as long as there is convertibility - easy convertibility is the important factor, not stable exchange rates.

Good luck convincing the Crypto-currency world to change the name to crypto-method-of-payment. People want to use BTC as a currency. A real one. Not a commodity that has to jump through at least one exchange hoop for every single transaction. That hoop has to be less annoying than using a credit card online, and currently, it's not. It's lucky the novelty and ease of use for grey/black markets has sustaining power. Otherwise, you wouldn't see this thing last a week.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: FreeTrade on October 07, 2011, 12:56:56 AM
Good luck convincing the Crypto-currency world to change the name to crypto-method-of-payment. People want to use BTC as a currency. A real one.

It may become a defacto currency in time. But only if it succeeds a method of payment first. One step at a time.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: cbeast on October 07, 2011, 01:29:24 AM
Bitcoin is like electric cars. Most people think they are a great idea, but nobody will buy one because they don't want to get stuck somewhere. Here's the thing, bitcoin is open source software that can evolve into a Mr Fusion Powered DeLorean in the next few months. Maybe we just need a bitcoin hybrid for awhile, but really greed will make it happen. It can and probably will go viral. Wait for it.. wait for it..


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: FAtlas on October 07, 2011, 07:43:01 PM
Here we go again.

Sell sell sell


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: tvbcof on October 07, 2011, 08:43:37 PM
Here we go again.

Sell sell sell

Hmmm...what have we here?  Decide to put a little marble on the roulette wheel just in case?


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: the founder on October 07, 2011, 09:49:15 PM
It's low today was 3.75 ...  and while it was crashing we printed an additional 7200 coins

let me know when you guys believe it's becoming mindless.



Title: Re: Too many new coins, not enough new Bitcoiners
Post by: FreeMoney on October 07, 2011, 09:52:12 PM
It's low today was 3.75 ...  and while it was crashing we printed an additional 7200 coins

let me know when you guys believe it's becoming mindless.

Why are you wasting your time? People are not going to change the rules. Just make a new currency and/or borrow coins.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: the founder on October 07, 2011, 10:17:15 PM
It's low today was 3.75 ...  and while it was crashing we printed an additional 7200 coins

let me know when you guys believe it's becoming mindless.

Why are you wasting your time? People are not going to change the rules. Just make a new currency and/or borrow coins.

No I'm not wasting my time,..  I believe that there is light at the end of the tunnel ...  it's just until now till the payoff is cut in half it's going to get dark.   My guesstimate is that it will go under a dollar before it starts creeping back up...   eventually it's possible to see it at over 1500 a coin... but not for a few years... 







Title: Re: Too many new coins, not enough new Bitcoiners
Post by: FAtlas on October 07, 2011, 10:22:50 PM
It's low today was 3.75 ...  and while it was crashing we printed an additional 7200 coins

let me know when you guys believe it's becoming mindless.

Why are you wasting your time? People are not going to change the rules. Just make a new currency and/or borrow coins.

No I'm not wasting my time,..  I believe that there is light at the end of the tunnel ...  it's just until now till the payoff is cut in half it's going to get dark.   My guesstimate is that it will go under a dollar before it starts creeping back up...   eventually it's possible to see it at over 1500 a coin... but not for a few years... 

Bruce Wagner spotted


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: bulanula on October 07, 2011, 10:24:33 PM
It's low today was 3.75 ...  and while it was crashing we printed an additional 7200 coins

let me know when you guys believe it's becoming mindless.



I'm just waiting for flipping PARITY man !!!


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: Littleshop on October 07, 2011, 10:52:30 PM
It's low today was 3.75 ...  and while it was crashing we printed an additional 7200 coins

let me know when you guys believe it's becoming mindless.



I do not want the price to drop.  But it will.  The network is just too big right now.  It is not hugely oversized but  in my estimation it is 2x too big but that is just my crazy guess.  When the network gets down to 5TH and the price gets down to 2, it will be more 'right sized' as a currency with less dollars going out the door to electricity.  The network can stay stable at that price for a long time as more people adopt coin.  Then it will slowly grow again.

Hopefully the price will grow in a more steady even pace, that is related more to the use of bitcoin then the speculation on its future.

There is nothing wrong with the rules as they stand.  Things just got (very) ahead of themselves.  This is the market correcting itself. 



Title: Re: Too many new coins, not enough new Bitcoiners
Post by: muad_dib on October 07, 2011, 11:07:25 PM
Too much panic here, we need to be more proactive.


How can we increase the Bitcoin Awarness?




Title: Re: Too many new coins, not enough new Bitcoiners
Post by: FreeMoney on October 07, 2011, 11:41:00 PM
It's low today was 3.75 ...  and while it was crashing we printed an additional 7200 coins

let me know when you guys believe it's becoming mindless.



I do not want the price to drop.  But it will.  The network is just too big right now.  It is not hugely oversized but  in my estimation it is 2x too big but that is just my crazy guess.  When the network gets down to 5TH and the price gets down to 2, it will be more 'right sized' as a currency with less dollars going out the door to electricity.  The network can stay stable at that price for a long time as more people adopt coin.  Then it will slowly grow again.

Hopefully the price will grow in a more steady even pace, that is related more to the use of bitcoin then the speculation on its future.

There is nothing wrong with the rules as they stand.  Things just got (very) ahead of themselves.  This is the market correcting itself. 


If the right size is smaller then so be it, but I'm always rooting for higher. I can make way more awesome stuff at 100 per than 5 per. And that's a completely healthy situation. 

Bitcoin is mindless.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: quartz92 on October 08, 2011, 03:08:14 AM
Here we go again.

Sell sell sell
nooo


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: beckspace on October 18, 2011, 03:51:22 AM
Right now btc are minted at a fast pace, but we are not alone:

http://www.youtube.com/watch?v=BrEBSe2qZ2o&feature=youtu.be&t=2m1s


Despite 95% of the notes produced each year at the money factory are used to replace old ones, 100 bills has a lifespam of 7.2 years. Go figure.

http://www.moneyfactory.gov/uscurrency/annualproductionfigures.html


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: allten on October 18, 2011, 05:12:34 AM
Deleted Post: Sorry Wrong thread



Title: Re: Too many new coins, not enough new Bitcoiners
Post by: KeyserSoze on October 18, 2011, 06:03:31 AM
Bitcoin is like electric cars. Most people think they are a great idea, but nobody will buy one because they don't want to get stuck somewhere.

http://green.autoblog.com/2011/10/17/nissan-leaf-outselling-15-plus-vehicles-in-u-s/


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: cbeast on October 18, 2011, 07:47:44 AM
Bitcoin is like electric cars. Most people think they are a great idea, but nobody will buy one because they don't want to get stuck somewhere.

http://green.autoblog.com/2011/10/17/nissan-leaf-outselling-15-plus-vehicles-in-u-s/

7200? Lemme know when it's 100x that when it begins to approach SUV sales.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: Rassah on October 18, 2011, 01:54:21 PM
Bitcoin is like electric cars. Most people think they are a great idea, but nobody will buy one because they don't want to get stuck somewhere.

http://green.autoblog.com/2011/10/17/nissan-leaf-outselling-15-plus-vehicles-in-u-s/

7200? Lemme know when it's 100x that when it begins to approach SUV sales.

I see a Lincoln Navigator (5,626) and a Hyundai Veracruz (6,836) on that list...


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: amencon on October 18, 2011, 02:48:50 PM
Seems to me that one of the cornerstones of confidence in the currency is a set rate of currency creation up to a point.  If that were changed mid way through, I'd think people would lose confidence in bitcoin altogether and bail much faster than they are now.

If this is true, then the only thing that could have been changed is the bitcoin creation rate from the beginning.  Had, instead, 10x more bitcoins or 10x less bitcoins been planned (500 or 5 bitcoin block rewards) into the system, I would think that bitcoins would be worth 10x more or 10x less per coin, netting us roughly the same market cap regardless of coin generation rate. 

In conclusion, there is as much money in the bitcoin market as people are willing to put into it.  Less coins would likely mean more USD value per coin, but there would be less coins and we'd end up in the exact same situation we are in now, more coins would just mean the opposite.

I haven't thought this all the way through so please point out the flaws in my logic.  Things might not have ended up exactly proportional due to psychological barriers or hangups, but I don't think this would have a great effect on the total amount of money people would invest in bitcoin overall.

If I'm right in the above, that would mean that changing the creation rate at all now that bitcoin is launched and has a market would be disastrous, and bitcoin being designed with a different creation rate would be essentially meaningless.  So moaning about current creation rate seems utterly pointless.

The only thing that will make the "value" of bitcoin rise is if it's useful to and adopted by people.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: the founder on October 18, 2011, 03:19:05 PM
In conclusion, there is as much money in the bitcoin market as people are willing to put into it.  Less coins would likely mean more USD value per coin, but there would be less coins and we'd end up in the exact same situation we are in now, more coins would just mean the opposite.

Though technically what you are saying is accurate,  in reality it NEVER works that way.   The price goes up,  people start reading about it, start investing, starting bitcoin companies,  etc etc..

Price goes down and less people enter the market and it starts going down faster.

It's called a positive or negative reinforcement cycle.  Currently we're in a negative.

It's how it always has been,  it's how it always will be.



Title: Re: Too many new coins, not enough new Bitcoiners
Post by: amencon on October 19, 2011, 02:18:22 PM
In conclusion, there is as much money in the bitcoin market as people are willing to put into it.  Less coins would likely mean more USD value per coin, but there would be less coins and we'd end up in the exact same situation we are in now, more coins would just mean the opposite.

Though technically what you are saying is accurate,  in reality it NEVER works that way.   The price goes up,  people start reading about it, start investing, starting bitcoin companies,  etc etc..

Price goes down and less people enter the market and it starts going down faster.

It's called a positive or negative reinforcement cycle.  Currently we're in a negative.

It's how it always has been,  it's how it always will be.



Hmm ok, so by your estimation had bitcoin been planned with only 2.1million coins ever existing it would be hugely more successful since each coin would have a greater USD value?

You may be right, but if we extrapolate that at some point the theory stops holding true.  What if 1 coin was ever planned and the whole time we just mined parts of it?  That way the USD value of a single bitcoin would always be greater than the total market cap of bitcoin.

If we believe that too many or too little coins would hurt bitcoin's future market cap value then there is a "sweet spot" somewhere in between.  What do you believe that spot is?  5m coins? 1m?

Of course even if you do have that magic number and it does have the impact you think it does, it's too late to implement it and forking bitcoin with that generation rate will likely prove to disappoint.  My point being, even if everything you say is true, you'd need a time machine and influence to change the bitcoin protocol before it began, to get any value from your knowledge.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: the founder on October 19, 2011, 07:36:32 PM
you are right.

I don't have a time machine, and forking it won't help either.

I just wish that one day production was tied to spot price or something along those lines.. that would even it out.

If the price is crashing (like today at 1.xx)  then miners rewards would be 1.xx per 10 minutes...  if it was booming at 35 dollars, then 35 coins per 10 minutes...  that would stabilize the price.

The problem is that doing that it would tie it directly to the US dollar, and would defeat the entire concept.

I don't have a solution.



Title: Re: Too many new coins, not enough new Bitcoiners
Post by: amencon on October 19, 2011, 07:56:07 PM
Unfortunately I don't either.  It seems to me that the only thing that will cause bitcoin to be a success is if continued development leads bitcoin to be held in such regard that it spurns wide adoption.  Hats off to the people hard at work trying to make this a reality, sometimes makes me wish I was a developer to help or work on my own bitcoin related projects in my free time.

Spot prices driving generation rate of bitcoins is something that might work, but honestly I don't know enough about the concepts involved to competently comment on the idea.  Also as you pointed out it would be in contrast to what some value as an attribute of bitcoin.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: Rassah on October 19, 2011, 08:33:20 PM
OP, are you worried that Bitcoin will die, or just that it may take a lot of time and patience for it to get anywhere?


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: slothbag on October 19, 2011, 11:12:15 PM
As long as the Bitcoin network continues to be secure and is not banned by governments it will definately survive.

Like everyone else, I adopted bitcoins because of the current rules in place regarding coin generation etc so I would not like to see that changed.

My point was that for the dwindling interest in bitcoins combined with the high price and inflation, prices looked to fall further (which they have).

I see two paths to success for Bitcoin that are easily achievable in the next 6-12 months..

1.
We need grass roots support, mom and pop stores accepting bitcoin in their stores. Its easy for them to setup and saves them merchant fees, the only reason they don't is because most dont know about bitcoin.  Once the major chains see the little guys winning with bitcoin they will adopt it for sure.

2.
A mini bitcoin economy where someone wants to live solely on bitcoins. Then they can earn bitcoins for work, spend them on food, rent, beer etc and of course pay their taxes.  It would only take 5-10 merchants to provide these services (in Australia you can already pay your bills and taxes via bitcoin through spendbitcoins) and someone could live "off the grid" with bitcoins.  Not needing to cash-out to dollars would mean more people saving their bitcoins and demand rising substantially.

Interesting fact, there's about 3 million btc to be mined up until Dec 2012 before the reward drops to 25btc.  BitcoinStatus shows about 48k bitcoin clients running and i'm assuming each client = one person.  At the current price of $2.15usd it would only cost each person $140usd to buy up ALL those coins.


Title: Re: Too many new coins, not enough new Bitcoiners
Post by: LokeRundt on October 24, 2011, 11:17:02 PM
As long as the Bitcoin network continues to be secure and is not banned by governments it will definately survive.

Even if it is banned by governments it will still survive, and the price per coin will go up