So we agree.  

It's whether they do or don't, not how much.

Generally, yes, the bell curve will win.  Though it's not necessarily safe to assume the bell curve at all times.

You would predict 150 BTC especially during times of low volatility.  However, suppose Bitcoin really catches on and the deflationary trend sets in.

As more and more miners watch the price steadily rise from 30, to 50, to 100, to 500, and beyond, the incentive to hoard increases, or the % of mined coins sold may decrease.  The opposite is likely true for inflationary periods, if only slightly.  Psychology is the factor that math isn't accounting for when determining the influence of miners on price.

Though in reality, I'd say it's an equal influence.  In other words, I think miners and value are entwined.

Every BTC coin is a mined coin.  The only times those coins have changed hands is, well, through exchange.  Not computer automated exchanges, but people exchanges (or at least people that taught bots to trade for them, thereby transferring their own intentions into the transaction).  Every mined coin came from a miner, and thus every coin (which gains value in an exchange), and the value of every coin, is influenced by the number of miners.

Even more simply, there would be no BTC were it not for miners.  Miners gave rise to Bitcoin's potential for value.  Without miners, there could be no BTC value.  And, if all miners quit now, there would be no confirmation of transactions, and thus Bitcoins would be valueless (nothing confirms their value anymore).

What I am getting at is that Bitcoin is a computer program, and Bitcoins are generated and confirmed by computers.  But only the miner hits the 'go' button and sets the whole thing in motion.  And only the miners, or potentially those who stop the miners, can press the 'stop' button and wipe out the whole thing.

Miners are an absolute necessity for Bitcoin's value as the current program stands.

Due to a recent thread discussion that got way off-topic, I decided to make a new thread so it was on-topic.

I'm amazed by those who suggest miners don't influence price.

There are many reasons why it's obvious that miners affect price.  Let me give you one example, because all it takes is one.

I am a miner.  I have a psychological threshold that determines the minimum amount of BTC I must have in my wallet before I will sell.  This threshold is 1 BTC, and it has been 1 BTC whether BTC was valued at $17 or $4.  The rate at which I reach 1 BTC is determined by the number of miners.  The more miners there are, the longer it takes for me to acquire 1 BTC.  The fewer miners there are, the shorter it takes for me to acquire 1 BTC.

When I acquire 1 BTC, I sell.  Selling influences prices.  The rate at which I sell is determined by the # of miners.  Hence, miners influence price.  All it takes is one.

I'm not one for ad homs, but you're an idiot.

Think for yourself.

Edit:  By the way.  It has a psychological effect on me.  And 1 person is all it takes to prove you wrong.  I mine, I influence the price because I trade.  My trades depended on what I had in my wallet, and once it crossed a threshold (my threshold is 1 BTC) then I sold.  If I continued to mine but didn't acquire 1 BTC, I wouldn'tve sold.  But, I mined and it did cross 1 BTC many times, so I sold.  I affected the price.  Hence, miners affect price.

Again, idiot.

This is not a hypothetical in the sense that the whole argument is based upon that situation.  The question is whether miners influence BTC value.  Take away ALL miners, and see what happens to the value.

Even if it is a case of 1 vs. 1,000,000 the distribution of BTC among those people matters.  You're the one talking about hypotheticals -- "If the price is 'x' there will be 'y' # of miners."  That is a hypothetical proposition.  And the nature of the proposition matters because you are essentially arguing that in the case of 1 vs. 1,000,000 miners, the distribution of BTC among those miners is irrelevant, and it's simply not.  Let's say the price is $4.86, which it is.  Now, lets say you solve the block solo (despite there being 1,000,000 other miners) and you get all 50 BTC.  Let's also say you think the price will continue to decline.  Which would you be more apt to sell?  50 BTC that you got in a down market, or .02 BTC that you got from your pool?  The distribution matters because the amount of BTC in someone's wallet has psychological effects on trading.  Trading influences price.  There are many reasons why miners influence price and there is absolutely zero evidence to suggest a 1 way function here.  This applies in the case of 1 vs. 1,000,000 miners and in 0 vs. any # of miners.

Edit:  Consider this example.
Scenario 1.  You have 1 person with 20,000,000 BTC and 999,999 people splitting the remaining 1,000,000.  This suggests 1 person mining all by himself for a long time and the other 999,999 joining in much later.
Scenario 2.  1,000,000 all have 21 BTC.  All 1,000,000 mine together at same rate starting at the same time.

Do you think the value of BTC will be the same in each case?

The whole point you are missing that renders all of your points invalid is because were not talking about 1 miner vs. 1,000,000 miners...it's about 0 miners vs. any # of miners.  It addresses each of your points except the first in the following ways:

(The first point you mentioned about pickaxes is irrelevant.  There is only one way to produce Bitcoins, and that's cpu/gpu mining.  Not only are there multiple ways of getting gold without pick axes, but the gold is already there.  There's no 'creation' involved, only gathering.  Gold is like oil wells that haven't been drilled yet. That oil has value because it can be recovered and used.  Without ANY miners mining Bitcoins, no quantity is produced).

1.)  There are no 50 BTC created every 10 minutes if there are 0 miners.  (Not an issue of 1 or 1 billion as you suggested).
2.)  The creation rate is 0 if there are no miners.
3.)  0 miners ever = 0 BTC = no value..................any # of miners = some # of BTC = value

Miners give RISE to value. 

Mining influences price simply because mining generates BTC.  Before any BTC were created, someone had to mine them to create them which gives rise to them having value.  To say mining doesn't influence BTC value is wrong because you can't even have BTC were it not for the first miners.  Additionally, mining influences price because of the total amount of BTC available.  That's what fuels the inflation we're seeing right now.  Miners generate more BTC but the economy is not growing as quick as the supply of BTC.  

Your last point seems to concede to the point I was trying to make?  Miners mine because the product of their work has value.  Why did Satoshi mine the genesis block?  There was no reason to mine the genesis block if value only influences mining and not vice versa.  The value of BTC at this point was zero.  He mined the genesis block because mining led to something of value.

Edit:  To put it another way, if mining gives rise to BTC which gives rise to BTC's value, then it's axiomatic that if you take all miners away , Bitcoin's won't have value.  This can be shown to be the case since you need network confirmations to approve transactions, and you cant confirm these transactions if it weren't for miners solving blocks.  If there were 0 miners, BTC value would be 0 because you can't use them...they lose all utility.

Mining precludes BTC generation and its value.  Without mining, there is no potential for BTC to have any value whatsoever because you wouldn't have BTC.

If BTC was valued at zero, nobody would mine.  People mine because they assume the product of the work will be valuable.

I don't believe it's a 1-way street.

True, Silk Road helps.

I would argue though that the cost of mining has a psychological impact on the value of BTC.  You have the direct electrical cost, the cost of time, and the cost of hardware.  If the cost of mining had nothing to do with it, then the $/mhash ratio wouldn't mean a thing.

The reason I ask is because I'm wondering how close we are to a legitimate value of BTC.  Obviously there's the electrical/time cost of producing BTC, and there is an economy (kind of) behind it, but to what extent is it truly growing?  This would be valuable knowledge to have while trading and considering future BTC value.  How is the economy doing?

I completely with the comments about the overhyped "manipulator" and that it should be expected.  I also agree that bad traders are largely to blame for market volatility (though I can't say I personally mind the volatility).

But, there is one scenario that could potentially screw the whole lot of us...the largest sell-off that we've never seen.

Edit:  By the way, you all do realize there's now some guy sitting alone in his basement by his computer wearing a cape with a huge "M" on the back of it, right?

Retirement?  I hope you got a nice pension or benefits package

It's dependent on how easily you can live your life with only Bitcoins, and how easily merchants/service providers can live using only Bitcoins.

You need to be able to rent/buy a home with BTC.  You need to make your car payments in BTC.  You need to pay for water, gas, electricity, etc. with BTC.  When you call your plumber, you need to pay him in BTC.  Etc., etc., etc.

And, merchants/service providers need to have enough people paying for their goods/services in BTC.

We're not even close for this to be a reality.  Fiat dominates, plain and simple.  Only when BTC rivals fiat (numerically, not theoretically) will you be able to truly price in BTC without pegging it to fiat.

But, any merchant/service provider is welcome to go ahead and try!!

You know that low of 5.11 today on tradehill?

That was me   

Easy and SAFE way to profit:

1.)  Consistently monitor market price at whatever exchange you are on and at mt. gox.
2.)  Go all in at somewhere between 50 cents to $1 under current price.
3.)  Place these bids at psychological barriers + a couple cents (e.g. $5.02, $5.52, $6.02, etc.)
4.)  Wait for someone to dump.
5.)  Watch it pump.
6.)  Now you dump  

Never failed me once.

Well, we have the "list of honest traders" thread, but unfortunately that doesn't stop people from making multiple accounts and then simply giving themselves positive feedback. 

Well, my personal guess is that people don't simply join the forum, then look at the marketplace, then realize how easy scamming is, and then start to scam others.

My guess is that scammers first browse through the forum for some time and observe how scams are being performed, observe the lengths to which members try to track scammers, identify what types of items are prime for scamming, etc.  I think this would explain why the post count of so many scammers is so low. 

Ordinarily, I wouldn't expect a newbie who is truly fresh to the forum (e.g. they haven't scoped it out before becoming a member) to be confident enough to just immediately swing into the marketplace forum and start scamming.  Without the knowledge of how transactions on the forum operate, the risk would seem too great.  I didn't make my first transaction till about post 300 or so, and even then I had my doubts and still do.

I think if the marketplace wasn't visible, this would weed out a lot of potential scammers.  I think it would help ensure that people who join are those who are sincerely interested in Bitcoin and the Bitcoin community first.  Of course, there will still be those who realize how easy it is to scam after they join, but it may prevent those solely intent on scamming from the beginning from joining.

I still think the post count is important, though.  Or, as I suggested, a 'newb' marketplace sub-forum vs. a 'veteran' marketplace sub-forum.  Ultimately, I think post-count (i.e. the amount of time you invest in your scam) is the #1 correlating factor among scams.

With all due respect, being new I'm not entirely sure how aware you are of how problematic scamming has become.  My impression is that 20% of the marketplace ads are scams.  I have no statistics on it, but that's my psychological impression.



+1 Theymos...guests shouldn't be able to see the marketplace.

Target gamblers.  Sexy gamblers.

Here's some advice that works for me.  Keep in mind I started Bitcoining right after the Mt. Gox crash and I've done quite nicely since.

This is a "safe" method that won't make you $ every day, but when you do profit, you profit rather nicely.

Keep an eye on your exchange's charts and place a buy order for almost all of your USD $.50-$1 below the current price.  Keep your bids on psychological barriers (e.g. $4, $4.50, $5, $5.50,) but add another penny or 2 (e.g. $4.02, $4.52, $5.02, $5.52).  At some point, especially if you use Mt. Gox or TradeHill, someone will come along and dump a few hundred/thousand coins all at once.  

If your buy order is large enough, the market will bounce off your buy order and within 5-10 minutes it'll be right back where it was.  Then you sell everything (or, if you're feeling lucky, hold onto them if you think the market will continue to go up).  Then repeat.  This little technique usually earns a profit close to 10% of total holdings on every trade.

The one thing to be careful of is the removal of very large buy-walls or HUGE sell-offs.  For this reason, I'll usually stick my bids 50 cents below current price during the day and $1 below when I sleep.  But, I've had several mornings where I've woken up and been like "HELLLL YEAHHH!"  It's a great way to start the day.

Edit:  I don't try to hit the peaks and valleys...I AM the peaks and valleys...sometimes.  This is all very generalized but you get the idea.

Don't count your dicks before they snatch.

The Bitcoin economy simply isn't large enough to sustain itself at a price that's significantly higher than its production cost (electricity, time, cost of current economic infrastructure, etc.). 

I think the current price is pretty realistic.  Could jump or drop by 50% (a figure I'm pulling out of my ass to demonstrate a point) but I wouldn't expect any super rally to $20 or beyond anytime soon.