When bitcoin was at $30 there was a link from one of the profitability calculators to a place that'd sell you a ready to mine rig, calculated to pay for itself in about 20 days.  The skills required were roughly "plug it in, sit back, and watch your ass and bank account grow."  During those times there was no discussion possible on whether it's more effective to buy or mine.  As a result 75% of the current network capacity got added over about 3 weeks while prices imploded.

Also, seriously, this is a geek's currency.  I'd go out on a limb and say approximately 100% of the current bitcoin audience capable of understanding, installing and using the bitcoin client are also capable of installing a video card and any number of mining packages.  The amount of effort here is still less than dollars -> bank -> dwolla -> gox -> coins.

Anyhoo, even now I'm looking at a cost to mine of $3.50 and a market price of $6.  Not worth wear and tear on my hardware, but for a professional mining operation it's definitely worth mining and taking a dump on speculators as soon as the coins appear.

So true.


And that's where you lost it.  Bitcoin was designed to make Satoshi (and others closer to the top of the pyramid) multi-millionaires at the very least.  All other effects are secondary.

And the lower they go the cheaper becomes maintain price.  Then again, just last month I'd have said $4s is not likely for the same reason and here we were.  210,000 coins get mined a month, and assuming only half of them get sold at a price of $4 that's still a chunk of new change required to feed the beast.

There are two ways to obtain BTC.  One way is to invest in mining hardware, the other is to direct buy.

If market prices are $32/BTC and current low difficulty makes the cost of BTC 75 cents, which way do you think prices (and difficulty) went?   If market prices are $7/BTC and cost to mine is $3.50, which way do you think prices are likely to go?

No, they are utterly bogus.  Not only are they bogus but they're disappearing.  Day high has now been moved to 12.5, and by the time most people get a gander at the chart they'll wonder what kind of crack everyone in this thread was smoking.

I think this was an experiment by the mtgox guys to see how traders and bots would react when given bogus trade data.  Expect more of the same in the future since the reaction was hugely positive -- 20% jump in bitcoin prices after being stable for about a day.

I did precisely that.  I've been panicking since I mined my first coins at a cost basis of well under a dollar while market prices were around $8.   The panic went into high gear as we climbed to $30 while cost to produce was around a buck, and has been gradually subsiding as bitcoin prices approach cost to produce.

I knew we were not going to infinity and beyond when my hardware investment was paid for in 6 days.

But then, I'm not a "buy and hold even if it goes to nothing" faithful.  I've already profited from this pyramid.  Anything else I get is gravy.

That would make sense.   Last time mtgox's account was 500k coins, so 200k more were sent to be sold since then.   

Now showing a high in the 13 instead of the 15 trade.  I'm now convinced the trade data has never been accurate.  Glad I have just pennies at mtgox, these guys are either complete amateur hour or outright fraudsters.

Anyone trusting that operation with hundreds of thousands of dollars at once deserves to be robbed blind.

BTC sold: [tid:1315755389779696] 2.00000000 BTC at $6.00000

Thank you mr. hacker!  At least I covered the power to make those coins, even after paying Dwolla 25 cents to move those 12 bucks. =)

I'm willing to sell at $6.  If I'm wrong, my cost to mine them is $3.50.  Seeing as I shut down but most of deepbit did not looks like 90% of miners get their coins for even less (3c/kwhr power or free?).  I have no worries about them being available much cheaper eventually -- like the bulls, I can think long term as well.

Bots rely on pricing data to make their decisions.

Guess what happens when they get fed a bunch of bogus data?

Sending my last 2 bits to mtgox now on the hopes that 1. this real glitch and 2. trades won't be wound back.

A little voice tells me a few thousand other people are doing the same thing.

Which means they'd be able to buy back in, get the same (or more coins) AND wind up with more dollars.  I don't see a downside.  The only ones out money in that scenario are the get rich quick speculators.

Someone just threw 100k on mtgox.  That was an excellent selling opportunity, but that cash is being grabbed fast.

I stopped mining, but if I hadn't I'd be selling into that "rally".  I don't have a very accurate estimate of how much total $ have ever gone into bitcoin, but using a model which assumes it's more profitable to buy than mine and assuming more $ was spent to buy bitcoins directly than provide the network it's going to be somewhere between 4 and 8 million.  So even if the LATE adopters cash out to pay for power and hardware it's going to be a bloodbath.

At a hair below $5/btc we're still talking over $35,000 a day to feed this beast.   Even if the vast majority of miners are content to be bagholders near term it's still BTC out there, available to be sold on the market.   Those miners may not wish to sell at $32, $24, $22, $17.5, $15, $14, $13, $11, $10, $9, $7, $5 but they may be willing to sell at $.10.

The bitcoin network takes about $1000/hour to run.  And that's not even paying for "free cards (and power supplies, and motherboards...)" for miners.  If you think the total amount of $ invested is still the total amount in people's accounts in mtgox... Well, I know for a fact you're wrong.  There's nearly $700 that I've extracted just by myself, with my tiny mining operation over the past 4 months -- and that money is NEVER going back to buy bitcoins.  It's going to AMD, Antec and possibly Xilinx.

Not only do your shares get diluted by 3% a month but money is actively being siphoned out of the pool to pay for power and hardware.  As I've said before, simply breaking even on a $ investment in bitcoin is being ahead of the game.  Long term, sure, greater fools *SHOULD* arrive.  Maybe.  For now you'll just have to sit back and hope they arrive as the total real world currency worth of your bitcoins keeps shrinking.

Bingo.  See: other thread.  He'll be back in the $5s, doubly so now that he's got way more coins than he wanted to unload.

I'm still hoping for a dead cat bounce, but with the weekend coming the hope is fading fast...

Now that depends.  If you assume The Manipulator wants to buy cheap coins (and I don't) then yeah, let it freefall to $4.

I think The Manipulator wants to *SELL* coins.   That's how he or she has the capital to put up fake bid walls to try and support the price while dumping - from previous selling.  I think the walls will be back at $5, won't be waiting for $4 at all.

I guess we'll find out.

It doesn't take a sophisticated bot to maintain the illusion of buy walls.  Course, if they get taken out enough times, you won't be seeing that again until prices get much, much lower.

I think exactly this happened at 13.  The bot was trying to create an illusion of stability, trading volume and support and then got sold to hard.

TL;DR: look for the walls again once we retreat to 5-ish.

But you could have oscillations in hash rate, much like alternate chains (e.g., Namecoin).  75% of hashing power fires up, mines 2 weeks worth of coins in 3 days, hash rate quadruples.  75% shut down for six weeks.  Mine for 3 days, shut down for a six weeks.   This would be a steady state where mining power quadruples and quarters, alternating.

End result: everyone but the patsies/free power guys mining at artificially inflated difficulty get their coins at a quarter of the price (but 75% get half the possible coins and it takes everyone much longer overall).  Still, it's downward pressure on price as a double whammy of a reduced utility and security of the network (~24 minute confirms 93% of the time) as well as cheaper to produce coins.   

It could turn into a feedback loop where mining 7% of the time for a 75% lower cost is the only way to be profitable for the majority.  Heck, were that to happen now you could even get CPU miners and Nvidia guys joining the fun during profitable periods.  "Unprofitable", artificial difficulty would keep creeping up until even the free power guys are looking at a higher cost to mine vs buy in equipment failure/depreciation and decide to drop out during the bad times.  That would require around 99% of the mining power to flee, so I don't think it's possible.

Shutting my mining rig down tonight for the first time in over 4 months.  Last time I didn't bother, the visit to 6s was temporary.  This time looks like we'll flatline in the 7s (at best) before the next stairstep down.

Even at 4.6 cents/kwhr it's not worth the wear on the hardware.

Bring on the cost effective FPGA miners!

Erm, I was being sarcastic.  More fortunes were lost bottom fishing than were ever gained winning this sort of gamble.  Switching from a trading to an investing strategy as a result of massive paper loss is how people become bagholders.

Which is not to say we won't see a dead cat bounce to $8 short term -- I'm still betting coins on that.  Come on people, don't make me look bad. BUY BUY BUY.