Bitcoin Forum

Difficulty increased 45% yet we are still at $7/ USD  ???

Sell for $10 each, and profit more.  It's worth more now!

I don't think the price is tied to the difficulty. hmm I may be wrong though I'm totally new. Anyway I wanna ask what are my options to sell/ BTCs ?

When will people learn that difficulty is not the same thing as demand? Never, because people keep telling themselves and each other that they are the same thing when it comes to bitcoin. Economic rules of the past somehow doesn't apply to bitcoin economy in this imaginary world where we are all bitcoin millionaires. Oh we can dream can't we?

Many of us need to get over the fact that we are not early adopters. Remember the difficulties were in single digits and didn't increase for a long time. The big dogs are already making their fortune from going from .01 and less to 8x usd as it recently has. They are the ones that want more and more people to raise the value and difficulty more so than the new ones. Trying to raise the price from 8 to 10 is merely a 20% increase in value and is laughable compared to what's already been done to the btc value as a whole.

BTC/$ exchange isnt tied to difficulty however the miners are the one's that introduce new BTC's
If you find yourself working harder for something don't you feel you should be payed more for your efforts?
Same applies here. More work to get a BTC thus you should demand more in exchange for it.

If you want the price of bitcoins to increase, make using bitcoins more beneficial to people. Right now, bitcoins are mainly getting more expensive because they started rising in price a bit and people started buying them to sell later at a profit. This made the price go up further and even more people started buying them. The interest in bitcoins will start dying, people will realize that they can't really do much with their bitcoins and they will start selling them at lower and lower prices, and the price will fall.

What we need are more services that can be payed for in bitcoins, more goods, etc. Just telling miners to sell their bitcoins at a higher price will not help you.

That's like digging a giant hole in somebody's backyard and then telling them to pay you a lot for it because you put in a big effort. If they don't want the hole in the first place, they're not going to pay you at all. We need to make people want the holes, damn it. :D

If noone wants to buy bitcoins, then does it matter how hard you worked for the coin? Or was it smart of you to invest such amount of work to mining bitcoin in the first place?

Demand needs to exist before the difficulty. The difficulty does not set or adjust price, although it effects the miner psychologically into thinking that they should be worth more.

I'm so sick and tired of trying to correct this misinformation. People just don't get the simplest fact of economics.

Thank you Viro. Finally someone who is making some real sense. This is how we increase the real value of BTC as a currency. Completely opposite of attracting a bunch of uneducated teenage gamers to mine on their machine while tryin to buy some weed. Ok my last sentence might be out of line, but it sure feels like it here nowadays.

All true but if you value BTC and what it is as a system you wouldn't want to sell yourself short.
Someone my want a pool, or septic tank to go in that hole someday ;)


If you feel you've actually corrected something I can see why your so sick.
Doing the same thing over and over again and expecting a different result is insanity. Might be why your post is only pointing out what I didnt state but already know. That was a waste of your time if you thought you knew what I know concerning the many different aspects of the economy.

You guys are forgetting one point.

When the difficulty changes, the supply supported by a block resolution rate of about 10 per hour is now reduced to 6 per hour. That's effectively a lower supply for the days to come. Anyone selling for cheap right before a difficulty change is just throwing his coins away.

There are ask orders in the system all the way up to US$11.80 http://bitcoincharts.com/markets/mtgoxUSD_depth.html

You can put whatever price you want on them. No one has to take you up on it either. Someone's only going to buy them if they decide they are worth that much. Bitcoins don't have a generation stamps or difficulty stamps on them. A coin minted last year is not worth more than a coin today A coin minted at 26,000 difficulty doesn't have more value than the last difficulty level. Physical coins only become individually valuable from actual scarcity. There is a determined amount of bitcoins being generated at a determined rate for quite a long time to come. The only way to make them more valuable is to give people a reason to want to have them, use them, and keep them. Less coins in the marketplace than money makes the price of coins rise. More coins in the marketplace than money makes them less valuable.

Then...i demand that people sell higher!

OH MY GOD WHATEVER WILL WE DO?! THERE'S ONLY 14,746,000 MORE COINS GOING TO BE MINTED AT A STEADY AND PREDICTABLE PACE IN THE FUTURE! IT'S PANDAMONIUM I TELL YOU!

Too much caps, scary.

Please trade in your calculator for a new one. Yours is broken.

It is up to the sellers to increase the BTC value! Just stop selling below 10$! ;)

It's so dumb it just might work. Give it a try. I'm sure there are some people at Mt. Gox that will never be on this board, they probably won't get the memo.

You, sir, are one of the early adopters, along with everyone else who is already here. Not even one-third of the bitcoins have been mined so far.

Also, remember that that the earliest adopters could only mine with CPU. Today the CPU is 50 times slower than a decent GPU, but back then the CPU mining code was less efficient than it is today, maybe 100 times slower than a GPU.

Also, the earliest adopters spent their time or their bitcoins making the system workable. Today, people can get a GPU and just start mining, but it wasn't always so. The bounty for the first open source GPU mining code was 10,000 BTC, paid by one of the earliest adopters, but you can use that code for free!

I think thar afeared.

last one 100$! ;D

There are 216000BTC mined every 30 days (assuming steady six per hour rate), and the volume at Mt.Gox for the last 30 days is roughly 1000000BTC. Now even when assuming that every miner sells every bitcoin they get (which they certainly do not), they would represent only 20% of the market, so it doesn't matter THAT much what miners think about what bitcoin value should be.

I believe that increasingly large portion of the sellers are early adopters with significant amounts of bitcoins, who feel that with current price they can start making nontrivial amounts of additional income by slowly selling, without making a huge dent in their bitcoin holdings. Of course, I don't have anything to back up this claim, other than "that's what I would do", if I had a lot of bitcoins :) When you wake up one morning, and realize that your previously almost worthless bitcoins you mined "just for fun", represent 99% of you wealth, you would want to diversify, or use that money to buy something nice, even if you expect bitcoin value to rise more in the future. This will serve to stabilize prices (I guess) and spread bitcoins to a larger audience. Maybe that's what we are seeing now in the markets? A lot more sellers than buyers..

We need a miners union to enforce liveable wages.  *cough*

Buyers, buy lower!  ;D

wouldn't 500$ be better? or what about 1000$?

from now on, let's all sell our coins for at least 10000$,
whoever sells below that, will be stoned to death.

along with anyone who says jehovah.

Would that union be composed of overheated graphics cards chanting "NO MORE HEAT" ? :D

yes, at least 80 % of mtgox volume is the sum of early adopters selling, speculative trading operations and maybe there's room for fictional trades moving the market ; )


+1

+1

There should be enough capacity of market if you are expecting a higher price. Once more USDs are introduced to this exchange market, the price would go higher.

The price is tied to difficulty and overall network hashrate.
If network hashrate increases more than difficulty then price will go down.

In which case the price for 1 BTC will be alot higher the day difficulty gets so high that mining is no longer profitable.

I'm not 100% sure if I've gotten the system right though. Can someone prove me wrong?

i don't know how to prove you wrong but difficulty & hash rate represent costs of mining for new coins.
which should not misunderstood as value. especially value of all coins.

the fact that anybody spend meat space money for hardware, electricity and bandwidth
can not be simply interpreted as an equation between costs and exchange rate.

it is a matter of demand and supply at what price level the trade happens.
you can spend bazilions of kuna to buy & operate mining equipment but if no one wants to buy
you either keep the coins or sell at what is offered. no one cares what did you spend on mining
price follows difficulty because of people willing to help mint coins and add power to the hashing
network because they can profit from this activity.

if there would be no influx of new money through exchanges, the price would be still in a 10 cents limbo
i thing that greed is leading, followed by difficulty. price is irrelevant.

His point is that mining is the only source of inflation in the system. If the network hashrate increases a lot compared to difficulty, let's say 12 blocks an hour instead of 6, then for the time, until the difficulty adjusts, the supply of Bitcoin will increase.

The point about mining being only 20% of the total market is irrelevant. It is the only inflationary component to the market, so it is the only one that naturally reduces price.

Sounds to me you are exactly the type I described. The points is that the 1/3 that has been distributed went to a fraction of the entire miner population and the rest will be divided into much smallers bits due to a huge number participating now. Are there anything left for us to trying take advantage? Yeah for sure. It's known "mining profits" today. It will dimish into next to nothing and it's profitable days are limited. People also seem to forget that we will not profit from mining forever which is not gonna happen.

And no we are not the on the same boat as much as you and I would like me to believe. Even with CPU only mining, having even 3-4 digit difficulty not single digit, would mean that it would be mining at much faster rate. If you want to sell me a couple thousand btc at less than .5 per and maybe I'll barely have a fraction of someone who has been mining for 6mo+ let alone a year or more.

Wow I can't tell you how refreshing it is to be reading comments like this and know that they're sarcasitc!!!  Thank you Bitcoin for allowing me to find other people who actually understand money and economics!!!  :) :)

+1
You summarized it perfectly.

BTC/USD Prices are at least in a short term downward trend.

I think you are wrong. Bitcoin supply isn't all 6M bitcoins that have been minted, but only those that are used for trading. From the market point of view, bitcoins that have been minted but never used for trade, might as well not exist. I suspect that a lot of that kind of coins are entering the market for the first time.

WIN!

Mining will always be profitable for some people, as long as there is any market for bitcoins. How to be one of those people? Have a more cost effective rig than rest of the miners.

Very easy solution.

Miners (not me), sell your rigs for BTC. This will increase the demand for BTC while lowering supply. ATI cards are hard to find -- decent 5850s - near-impossible. Great time to charge a premium for it!

Even easier solution -- anyone who recognized how overpriced BTC was when it was near $9 (probably just about everyone reading this) probably sold off their BTC for MtGoxUSD. Let's assume half of those people still haven't withdrawn their $ from MtGox. Simply place buy orders up to the point of highest reasonable resistance (I'd say that's $7.50). Once we're past that point, it should be very easy for the market to keep swinging upward. I personally have buy orders and sell orders in all the time within a 3-point spread. All miners looking to boost the price should. Buy low, sell high -- lessen others' supply and boost your own. More control of the market, more your buy & sell orders matter.  ;)

At any rate, I'm still in the black until the price of BTC drops below $1 at current difficulty, and I'll be shocked if the price of BTC doesn't increase at least one full point by the end of the week to meet miners' lack of interest in posting BTC for mediocre returns :)

Nice move, do you want to buy my coins for 20 bucks each, cause I have kids and wife ... you know ... :-\

What coins do you expect have the highest probability of entering the market? Coins bought by "hoarders", or coins "minted" my miners? Putting aside day traders and the like, several elements indicate that a miners is much more prone to sell his production than a long term investor is.

Nevertheless, the point stands. A coin that has been accessed through trading, no matter how long it is held upon, has already brought in dollars in the market. A freshly minted coin didn't.

I agree with the notion of "Miners, sell higher!".  If BTCs were worth their high of $8.90ish before the difficulty increase, they ought to be worth at least $8 plus the proportion of increased difficulty, so just shy of $11 each, in my estimation.  However, let's not forget that the market is already overpriced (obviously, as prices have been flat-to-descending for a while).  It's fundamentals are hard to ascertain, as it's somewhat like gold, but better, yet not as well known and not as well traded. 

I made projections back in late April as to what I think the current BTC value would be now, based on the supply/demand fundamentals of difficulty increases and other predicted (even if only psychological) fundamentals.  My original prediction for today's date was $3.23, vastly different from the $6.90 to $7 that we're seeing today.  About a week later I revised that prediction (based on more information) upward to $4.76.  Still a far cry from $7 :)

Given that current prices are 47% higher than my last prediction, that'd put us at $8.62 by May 25th, $9.03 by May 31st and $11.55 by June 11th.  As always, we'll see...

I'm still in the black at about $0.80/BTC at the current difficulty level in the summer, and $0.30/BTC at the current difficulty level in the winter.

Not worried.

I think the price is headed lower as some of the speculators get disappointed by the recent price drop and want out.  The days of making large profits speculating are over.  That is ok, I am here to use bitcoin as a currency not as an investment vehicle. 

I am looking forward to the days that I can use a site like biddingpond.com (but with more traffic as is slowly increasing there) to sell stuff with small cut going to the the auction site but nothing like the 10% ebay is charging. 

It doesn't matter how high miners sell (I have 60btc for 12$ right now), what you need is people buying higher. If no one wants to buy coins, price will plummet very fast.

For what it's worth, I thought BTC was overvalued at $0.8 at that difficulty since one could go out and buy a GPU and mine profitably. As long as btc mined > cost(depreciation+electricity), BTC.USD should fall or difficulty should increase. Thus far, it hasn't happened, difficulty is increasing but BTC.USD still keeps mining profitable. It is not sustainable.

This is stupid, how can you just say "sell higher"? No one will buy them if you think that way. The buyers are also thinking "buy lower". The difficulty has no relationship with the cost.