I like bitcoin and I also support other cryptocurrencies. But bitcoin is currency and was RARELY used for that in the last year. Bitcoin was not designed to make me or you wealthy, was designed for us to get out from bank's control.

Also please keep in mind that bitcoin is unique, the first of it's kind so its problems are unique. I believe that in year 1 bitcoin will be more than $100. But that will happen slowly and only after the economy is very flourishing.

So, the solution I see is that people starts to buy and sell things using bitcoin. I would like to say that since I've opened my store in April, more than 150 people bought from me. But just 10 using bitcoins.
I am not telling to buy from me, my shop is not very interesting for men, which are the most bitcoin users. But in order bitcoin to succed, you hav3e to buy.

I will keep the exchange rate at +1$ even if 1 BTC = $1 and I hope I will be a good incentive. More than this, I can't see what I could do.

you are absolutely wrong. check how Silk Road hedges btc value for sellers, and maybe you will have a clue.

Can we start panicking now?

true, but it has value as a low cost means of cross border exchange where only rapid price variation is a problem.

if I want to sell an investment worth £30,000 to potential investors, I can do so on a global market, and repay later at whatever the exchange has floated to.

Eventually the price will stabalise based on that growing market of cross border exchange + the cost of electricity killing miners. Eventually the price will bobble above and below some break even with regards to mining?

I think part of reason is problems with various service, one as MtGox, it can not hurt if you find out that company which your holds money is badly run and have some security issues. Increasing dificulty and issues in economy which might have make some persons to cash out and leave the "game".

Miners do not drop out anyway, as a whole so I don't see difficulty decreasing significantly.
Take a look at this graph


some force is preventing the 14day moving average to cross 0% growth.
I say its when a miner stops he sells his gear to another miner, with no effect on the network except a short downtime during the shipping of gear.

If ones wants to put any stock in that.. you then have to assume fresh blood (money) is needed to prop
up this system. Also known as a ponzi scheme. Hate to say it but that seems to be the case. This is not
a closed system. USD(whatever) is being taken out of the system and not enough is coming back in. This
might not always be the case but it sure does feel like it.

Wow. I am the negative. I am the troll.

Services are much different than tangible products, and tangible products are where the real market is.

Price would be in $9 if someone hadn't sold 10,000 at 7.50 down to 6.90 and now it has been stagnating, but not falling.

All hail the manipulator! Save us manipulator! 

There is no reason to assume the opinion of suppliers should have a major impact on price at constant supply.

Sure, Bitcoin does indeed have a lot of small miners who might tend to sell at certain times rather than at others. But that is exactly where speculators come in, acting as a buffer against such fluctuations. Bitcoin has a massive amounts of speculators, their opinion should dwarf what miners decide about doing with a month's output.

A miner who decides to hold no matter what is nothing more than a speculator in the end. Whether he bought the coins at some price or the hardware for another makes little difference. Just like a speculator, some got the coins cheaper early. There is no time-frame in which an ending amortization time should cause more coins to be sold than at another time -- except immediately after a price rise, which obviously didn't happen much, given the speculative bubble we've seen in June. Had lots of people sold off mined coins when rising prices made their value met expenses for their hardware, the extreme price spike would probably not have happened.

Also, I find models focusing on mining increasingly useless, as the fraction of coins that have been recently mined grows smaller by the day. With over 7.2M BTC created, daily production is now falling below 0.1% of the existing coins. The relative fraction keeps diminishing, and they are shared among many small miners these days.

That said, I believe the statement to be false. Miner hardware amortization time may be important for difficulty, but is unimportant to price. Speculation is dominant, and thus the important part lies in the expectations of those holding or buying BTC.


PS: I find it bad practice to chain words like "real, actual, true, accurate" in a topic. Interestingly, such findings correlate well with false statements inside.

I've seen a lot of minor reasons why it dropped but the real reason is obvious.  The distance in time from when GPU mining really took off to about a week ago is approximately the time it takes to pay off the average efficient set of cards.  If I mined from April to now, my cards would be paid off too.  So people with lower budget simple rigs are hitting that level and thinking about selling for USD or permanently withdrawing their USD from the exchange so their long term investment ends nicely instead of continuing to risk it.

The majority of miners joined to make money/get "free" cards so if you've made around the cost of your rig and saw the price drop and stay there for a few days then sneak down a little more then stay there and show no sign of raising but you're sitting on like 30-50BTC, you're going to take the opportunity to dump them all on the market just in case it drops to like $2 and ruins your entire mining experience.

Unlike other people, I'm going to actually post evidence.  2 months ago there were about 8 radeon 5830's on ebay with the cheapest at $140.  Now there's 38, almost all used, almost all referencing bitcoins, and the cheapest around $127.  People are definitely selling off their rigs now that the price dropped and they've already "cashed out."

What's not causing the drop is:

- investors because no investor sees it drop like $2-3 and decides to sell.  That doesn't make any sense and if they're as stubborn as me, they won't sell it at a loss even if it takes 6 months of sitting on BTC to prevent it.

- any blog post, news article, or forum post caused it because our opinions on BTC is pretty set in stone and can't be shaken by something so insignificant.

- a massive theft and sell-off because we should have heard about it by now.  It would have been at least like 500,000 BTC to get to this price and that's almost 10% of all coins that exist.

I would actually love to see this. All free market cartels in history have failed so it would be interesting to see it happen again and not just read about it.