Bottom line, PRICE DOES NOT INCREASE BECAUSE DIFFICULTY INCREASES.
Suppose difficulty increased by 100x. According to your logic, prices would still not increase because difficulty does not affect price. Let's say Bob is a Bitcoin newcomer. He decides to mine to get them, but then difficulty increases by 100x. So instead, he decides to buy them because mining would be far less profitable. Other people have the same thinking as Bob, and decide to buy instead of mine. This drives up the price. Difficulty does therefore affect price. People want money, and just because of that, price affects difficulty. That's much more powerfull than your assertion on how difficulty affect price.Price to difficulty ratio absolutely affects where new "investors" choose to invest - mining or buying coins. If I want to get 50 coins, I have two options, buying them (or trading for them), or mining them. If I buy them, it will push the price up. If I mine them, it will not. So when people become interested in Bitcoin and want to make an investment, the ratio absolutely could decide how the price adjusts. However, this factor may not be as large as people make it out to be. The price/difficulty ratio has been extremely favorable for miners up to this point, yet the price still has surged. So difficulty is still catching up. It's hard to put TON of systems online quickly to mine. Hardware takes time to assemble, ship. Rigs take time to set up. So if there are ever big price spikes, difficulty can keep rising for a long time after that, even without any more price surges. Right now, the balance is still favored more toward miners than it has been in the past. So you'd expect to see more people still going for mining than buying. The higher the price gets, the harder it gets to bump the price up even higher, but raising the difficulty costs the the same. So the price jump will be much less than the difficulty jumps for a bit. |
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nice tip, in recent events of damn hackers its good to back up your files.
Backing up doesn't stop hackers. In fact, it might make it easier. The instructions at the beginning, if your machine is infected, and someone gets that new wallet file, you are screwed anyway, even if you delete it, if they grab it and save it. More reason why unencrypted wallet files are just awful. More and more people will create trojans to look for that file, steal them, then be on their way with your money. |
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lol @ anyone who bought shares.
I already got some profit from those shares... Thus, why the lol? I think people don't realize these are dividends, and figure it'll take forever to 'repay' the initial investment at that rate. They don't realize these dividends are independent of the stock price. My last set of calculations showed it's actually a pretty decent APR so far. As long as there are greater fools to sell the shares to, sure. |
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If there was a means to invalidate the thieves coins or to reclaim them then the same could be done to a legitimate user.
Bitcoin is a secure system only so long as you keep your wallet secured - and sadly it seems you were not able to adequately do so.
This isn't a reason to abandon bitcoin completely or to dismiss it as flawed, but of course it's understandable that you wouldn't want to reinvest after having lost so much.
Keep an eye on that address in block explorer and you might find transactions that end up at some publicly-identifiable address, that might give you some chance of identifying the thief.
You're right this can only be blamed on me. I am the flaw with bitcoin, but let's be honest the wallet should be encrypted. The developers should've put a very very high priority on this the moment bitcoin went over $1. They knew that this was bound to happen and someone is going to get hurt and if they taken preventative measures early this could've never happened. Now that's one side of the coin, the other side is that I'm an idiot for keeping a wallet.dat file with so much money on my day to day machine - especially one running windows. I'd at least like to know who took them or find out how. This story is going to happen over and over. I guarantee that. |
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lol @ anyone who bought shares.
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This technique could be used right now to push the price from $21 to $23 just for around 700BTC ... you buy along the way, then wait a little at the $23 threshold and then sell, I think it's a pretty good way to make a decent profit. People are not selling under $23 now, so there is good chance they wouldn't after it rises to $23 ... if I would have the money on hand I would most likely do it, damn it!
Except if people sell off, or buyers never show up at $23. Then you buy for $23, sell for $19. Awesome plan! |
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I agree that having more divisibility would be better, and decimals suck.
Betco.in shifted their decimal for poker and it makes games seem a lot more exciting since there are more "chips" in play.
You don't want to go too far and make people think it's worthless, though.
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Everyone is saying "oh, it's alright, it's just because the $30 was unsustainable and the market is just stabilizing itself"
...Alright.
Seriously, it's dropped from $32 to $10. Wtf.
What's going on? I'm seriously getting concerned now. I've lost over $100.
100 whole dollars? Shiiiiit! Start looking for bridges to jump off of. The market dropped to $10 because no one wanted to buy something that was falling. Lots of sellers, few buyers = prices going down. |
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Network Hashrate Gigahashs/s 6329.31 so miners are optimists about the future prices and they save BTC (and create more BTC, pump the offers again)or they are willing to tolerate to have lower margins because something is something, and sell at lower prices so will the price rally up again on september ? Miners don't have to be that optimistic to keep running. They just had to be overly optimistic when they got their rigs up. Tolerate low margins? What choice do they have? Stop mining and have no margins? Whine about it? |
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I'm going to guess when some guys got stranded on a desert island, gold was about as close to worthless as possible.
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I would consider buying if it went under $10 and there was a safe way to buy them. I don't trust those exchange websites. I also want to be able to use my debit card with no crap involved.
Please do not invest in something you do not understand. He has a legitimate point. Even aside from the inherent dangers of extreme volitility, these exhanges are completely unregulated. There is absolutely nothing insuring that you're getting the real market price, that the charts or market depth are accurate, or even that your money will be there the next time you log in. If Bitcoins were traded on a legit FX exchange through legit brokers/market makers, I'd probably be a millionaire by now, but I wouldn't touch these completely opaque bucket shops with a 100ft. pole. Because nothing bad ever happens there. It's not like Bernie Madoff used them or anything. |
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So bitcoins are not really good for everyday transactions. For example, you will never be able to use bitcoins to go shopping, unless you and the shop assistant are willing to wait an hour for the transaction to clear.
Only if they require 6 confirmations. |
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Why would they decide to sell them all? Why not just keep the extra ones? If you need to sell 2 to recover costs, and can save the rests, having fewer miners would have *fewer* on the general market since now instead of 80% being held, 90% are.
Why not? Theory is, if you are willing to sell x% of your generated coins for x profit, when you are making x2 profit wouldn't you want to sell a bit more? Think of it as a sliding scale. On one end the profit is negative or 0- and no miner would want to sell any coins. In the middle the profit is some amount, $3 per BTC for example, where most miners are willing to sell some coins but might not want to sell all coins. My argument is if you take a miner who is willing to sell x BTC for some profit, and offer him double that profit, he is going to want to sell more than x. More profit is a direct incentive to sell more. It's all just a theory, I fully admit I have no hard data or facts to back this up. It is just a theory that sounded reasonable when I thought it through in my mind and I wanted to share. This makes no sense. You can assume all day long, and there are lots of assumptions. Why are you assuming that a miner would want to only keep a fixed number of coins? Why not just sell them all? Or why not sell what he has to to pay costs and keep the rest? Your argument appears to be this: I am a typical miner. #1 If I get 20 BTC, I will sell 18 at $20 and keep 2. #2 If I get 40 BTC, I will sell 38 at $20 and keep 2. Why is the ratio of how many coins I keep changing in that direction? If the price is going up and I'm a miner, I'm selling as few as possible. If the price is going down, I'll sell all of them. If the price is staying steady, it doesn't really matter what I do. I am making the assumption the exact opposite as you. Most miners fall into two camps. The hoarders and the sellers. The hoarders will sell as few as possible needed to meet expenses. The sellers will sell all off regardless. The sellers don't matter if they stay in. They are selling 100% no matter what. So if they get more or fewer coins, it really doesn't matter, as long as the ratio of sellers:hoarders is the same. The hoarders matter because they would sell a fixed number of coins to cover expenses and keep the rest. If they can get 2x as many coins, they'll still sell the same number of coins, and then board the rest. But this greatly shifts the number of coins mined towards more hoarding, not more selling. The only way this falls apart is if a decrease in difficulty is because hoarders are driven out at a faster rate than sellers. Is there any reason to think this is true? The sellers are more likely to drop out IMO. This is because they are in it for the $$, and they will mine if they make money, and stop if they don't. A hoarder will accumulate because they actually believe in Bitcoin. So you'll see more shift toward hoarders in the most likely difficulty drop scenario, which means even fewer coins are put on the market. |
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Can you show me how difficulty affects price?
Here is the correlation between difficulty and price. They have been VERY closely correlated historically. People who say they are not related are misinformed That's not what he asked you to show. He asked you to show how difficulty affects price. We have long known of the corrolary between price and difficulty, but difficulty changes lag price. It's impossible for the effect to come first, so logically, price affects difficulty. It's also sensible, since as the price rises, mining becomes relatively more profitable and more people compete. But people walking outside with umbrella is highly correlated with rain, therefore umbrellas cause rain! |
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If I double how many BTC I get, my competitors may get 2x as much too, but it also means I have half as many competitors.
Why do you think sellers get to decide prices, but not buyers? A seller can only sell for what people are willing to pay for them. Sellers cannot just demand whatever price they want.
I can't really come up with a good argument against that. It makes sense to me that if the same number of buyers want to buy the same amount of BTC it wouldn't change the market much. However, I think there are some miners who are "holding out" some BTC as a future investment. You mine 10, sell 8, keep 2 just in case BTC reaches crazy levels at some point. Suddenly you are mining twice as much for the exact same investment, your potential profit is DOUBLE, now you might want to just sell all your BTC each week, since you don't know how long you will be able to get double the profit- since difficulty might go back up. I guess what I am saying is that if the profit was doubled for a time, some miners who were just mining to collect bitcoins might be encourage to start selling, and the number of BTC for sale would go up. Why would they decide to sell them all? Why not just keep the extra ones? If you need to sell 2 to recover costs, and can save the rests, having fewer miners would have *fewer* on the general market since now instead of 80% being held, 90% are. |
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Why does it matter if it goes to 10 miners or 1000 miners? Why is that more important?
Could go either way, I'll admit. But part of me thinks that miners make up a certain percentage of the bitcoin community. If say, 25% of the miners quit, resulting in a difficulty drop, that could be an indicator that 25% of the bitcoin community as a whole lost interest, which also means fewer buyrs and speculators. The other aspect is personal needs, expectations, and diminishing returns. If you are mining 10 BTC a week and making a profit, and suddenly difficulty drops such that you are now mining 20 BTC a week, you have a few possibilities. You can try to keep selling at the same value and make double your profit, but you know all you competitors (other miners) also have a sudden doubling of bitcoin income, so you might want to reduce your price a bit, since if you made a profit before you could now sell for half the price and make that same profit. Where you might not be willing to sell so cheap in the previous week. Ok, now we are getting somewhere. If people lose interest, that's a bad thing. However, a miner losing interest is not really *that* important, since a lot are just mining for easy money. It wouldn't concern me much. If I double how many BTC I get, my competitors may get 2x as much too, but it also means I have half as many competitors. Why do you think sellers get to decide prices, but not buyers? A seller can only sell for what people are willing to pay for them. Sellers cannot just demand whatever price they want. |
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I understand what you are saying. The overall supply is the same. But supply of 50 bitcoins going to 10 miners is very different from 50 bitcoins going to 1000 miners. If difficulty goes down it means there are fewer miners, as such supply of bitcoins going to each miner goes up. The supply per miner is directly affected by difficulty, and it's really more important than global supply in this case. [/quote] Why does it matter if it goes to 10 miners or 1000 miners? Why is that more important? |
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Is it safe to say that when difficulty either drops or basically remains the same (as opposed to increasing by a large margin every adjustment) that the BTC value has peaked, at least for a time?
Obviously, this won't occur next adjustment, given current stats, but if say, a month from now difficulty actually drops during an adjustment, do you think it would set off a panic and people would start trying to sell?
No it is not safe to say this. Please explain why you think it might be. |
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I'm shocked by this ..
It's understandable that they have a USD withdrawal limit (understandable to the extent of the violence threatened otherwise). But why a BTC limit? Is the limit tied to the current exchange rate? Interesting ..
Because that's what they need to do to follow the law. |
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It makes no sence to buy shares with the current BTC rate: | 18 | $/BTC - current rate | | 5,000 | shares | | 39 | rigs (lets go with this number for now ) | | 128 | shares/rig | | 0.75 | BTC/share | | 1,731 | $/rig | | 50% | %revshare (since 50% goes to the owner) | | 3,462 | effective cost of rig |
VS. 1,200 $/rig - buy my own 2.88 Ratio Thats overpaying by almost 3 times At the original 7USD/BTC - it was competitive, but now you would have to cut the share price to something like 0.25BTC/share to make it work Please comment? That's what happens when you run a scam, your "investors" get hosed. |
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