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I just don't understand it. A crash happens in every currency. Do people think that Cryptocurrencies are different?
I honestly don't understand. Bitcoin has had worse crashes, yet $65.40 sets off 'panic mode'? Seriously, whats the deal? I don't want Bitcoin to fail, but it's going to happen again and again as long as Bitcoin is alive.
If you owned it over $200 and haven't yet sold... you're panicking. |
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There have to be some of you out there. Does anybody believe Bitcoin will go below $10 again?  Confess? Ok I CONFESS. lol. As if it is a sin to observe an obvious trend/fact. |
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every week for the past month, btc value has been falling by $10US, and extrapolating it to the next few weeks gives me the following;
July 10 -- $70
July 17 -- $60
July 24 -- $50
,
,
,
August 21 -- $10
Once the $10 firewall is breeched, the race to $2 will happen in a few days.
Thus, by the end of August 2013, it will be $2 or less.
PS: I am neither an expert nor a psychic. Think of me as a devils advocate.
I agree with your analysis as I came up with $2 as well. However the one thing I think you are missing is increasing difficulty of mining which sets the bottom price higher. Yes ASIC is driving price to that floor, but it is also driving difficulty up at the same time. Right now I have them converging at $20, but it doesn't matter it will be easy to calculate when it gets there... whatever price it is. That is when to buy. Better yet I am thinking of purchasing whatever the most efficient miner is at that time (assuming it can be shipped immediately) and either buying or mining based on the KW/GH ratio advantage at any given time. |
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When there is a delta (as there is right now) between price of BTC and cost to produce BTC then every new BTC created is effectively being purchased for less than market value, and as of right now for a fraction of market value. So it would stand to reason that the vast majority will be converted to $$ or other currency immediately upon creation.
I'ld previously made the opposite argument. Back when GPU profitability was low, those miners couldn't save their coins because they were needed to pay the electric bills. When profitability skyrocketed, fewer coins were needed for the electric bill and thus more coins were saved. There is one part to your argument that I'ld agree with though. There were some people who mined rather than buy specifically so that there was no need to use an exchange to acquire coins used to make purchases. So those people were probably first in line for ASICs and today are getting many more coins than their level of purchases require, thus they can then spend / trade their excess coins as they essentially are considered to have no cost. I don't know how much of the mining capacity might fall in that category but it could have an impact, surely. Alright. Let me ask you something. Why does anyone hold BTC? Can we assume they eventually want to do something with it? what is that thing they want to do? The "True believers" would use them to purchase goods and services as I understand it. What motivates those who hold it though? |
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Hello, i think asics are devaluating bitcoin and will continue to do so because they are extremely cost efficient (i mean electricity per gh).
You are making the classic mistake in thinking that in crypto coins that the cost of production has anything to do with the market price. If there was no limit as to how many bitcoins could be mined, you would have a point. Production would increase, and the flood of additional bitcoins would suppress the exchange rate until mining no longer is lucrative -- and an equilibrium would be reached. But with mining, difficulty adjusts and thus no matter how much additional mining capacity comes online, roughly the same amount of bitcoins are produced day after day. So the amount of mining occurring (hashing capacity) doesn't drive the price, but instead is simply a reaction to price. Because of how efficient ASIC mining hardware is, the cost of electricity is a trivially low percent of the mining revenue. This contrasts how with GPUs the cost of electricity does now (... or soon will) exceed the revenue. So ASIC has (or will) demolished the profitability when mining using GPUs, but it has little to do with the exchange rate. (other than, perhaps, miners investing their coins to buy ASIC hardware, and in turn ASIC hardware vendors flooding the market with coins when cashing them out for R&D and manufacturing costs.) When there is a delta (as there is right now) between price of BTC and cost to produce BTC then every new BTC created is effectively being purchased for less than market value, and as of right now for a fraction of market value. So it would stand to reason that the vast majority will be converted to $$ or other currency immediately upon creation. It's like insiders caching in options on a normal stock, which drives price down. This does in fact have a become a market mover to the downside if the overall volume is low enough, which it seems to be. Your statement would be true if the outside interest in BTC overwhelmed the miners influence but it doesn't seem like we are there yet. It seems to me that other than the recent media fueled bubble, mining is THE primary factor in determining price. I'm a miner. I don't sell my btc as soon as they are produced, and in fact, as a US citizen it would be illegal for me to do so without registering with FinCEN as a money transmitter. It stands to reason you are just making shit up. http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.htmlA person that creates units of this convertible virtual currency and uses it to purchase real or virtual goods and services is a user of the convertible virtual currency and not subject to regulation as a money transmitter. By contrast, a person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter. A: I agree with you, I am making things up. That's why I am posting in the "Speculation" forum. Isn't that what speculation is? B: You are a miner. Does your mining activities account for a significant percentage of BTC produced? Greater than 5%? No? Than your anecdotal data is irrelevant C: It is illegal to sell BTC for $$ in the US? I did not know that. If that is the case I may have to revise my prediction downward significantly. I know for sure I will never buy a single BTC if I could never legally sell it, and neither would any other US Citizen. D; Speaking of the US, isn't bitcoin usage, and mining a worldwide endeavor? So what does the legality in the US have to do with BTC price as a whole? In any event, yes I am speculating. The reason I am doing so is I am attempting to make a decision between buying, mining, or walking away. How else is one supposed to make that decision without speculating on the future value of the item one is interested in? |
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Hello, i think asics are devaluating bitcoin and will continue to do so because they are extremely cost efficient (i mean electricity per gh).
You are making the classic mistake in thinking that in crypto coins that the cost of production has anything to do with the market price. If there was no limit as to how many bitcoins could be mined, you would have a point. Production would increase, and the flood of additional bitcoins would suppress the exchange rate until mining no longer is lucrative -- and an equilibrium would be reached. But with mining, difficulty adjusts and thus no matter how much additional mining capacity comes online, roughly the same amount of bitcoins are produced day after day. So the amount of mining occurring (hashing capacity) doesn't drive the price, but instead is simply a reaction to price. Because of how efficient ASIC mining hardware is, the cost of electricity is a trivially low percent of the mining revenue. This contrasts how with GPUs the cost of electricity does now (... or soon will) exceed the revenue. So ASIC has (or will) demolished the profitability when mining using GPUs, but it has little to do with the exchange rate. (other than, perhaps, miners investing their coins to buy ASIC hardware, and in turn ASIC hardware vendors flooding the market with coins when cashing them out for R&D and manufacturing costs.) When there is a delta (as there is right now) between price of BTC and cost to produce BTC then every new BTC created is effectively being purchased for less than market value, and as of right now for a fraction of market value. So it would stand to reason that the vast majority will be converted to $$ or other currency immediately upon creation. It's like insiders caching in options on a normal stock, which drives price down. This does in fact have a become a market mover to the downside if the overall volume is low enough, which it seems to be. Your statement would be true if the outside interest in BTC overwhelmed the miners influence but it doesn't seem like we are there yet. It seems to me that other than the recent media fueled bubble, mining is THE primary factor in determining price. |
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Hello, i think asics are devaluating bitcoin and will continue to do so because they are extremely cost efficient (i mean electricity per gh). Can some1 with math skills count this: Compare the price of btc(not the 250 buble)/electricity price per gh from gpu era (until Feb 2013) to today bitcoin price/electricity price per gh from asic era.
I did that math for the current situation, using specs from Butterfly labs. Can't do historic though since I don't have the data. I came up with a value of $2.00/BC based on current difficulty and cost per GH. I agree with your assessment by the way. Been thinking about this a lot (since I am new) and it seems inescapable that mining will always regress to cost to (cost of electricity + hardware cost + margin) with electricity being the largest percentage $ wise. There is a huge delta right now in favor of miners but it has to close through either difficulty, price or a combination of both. There is a bit more to be priced in here: the risk in buying the hardware and receiving it in time is quite big, there needs to be a big margin for it to be still attractive. Look at all those scam offers, the BFL disaster and so on. Using advertised data on promised future hardware doesn't give you good results. I've actually read some hands on reviews of BFL products that seem to bear out the advertised specs. The current supply situation is only that.. the CURRENT situation. But the fact is ASIC are real and one way or another will saturate the marketplace and they do come with a inherent MW to BH ratio that can be used for calculations. You can already see the effect of the few that have come online recently and it is just a fact that more.. MANY more will come online and will continue to do so until the price/difficulty delta is closed. I have no idea how long that will take but it WILL happen. |
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Litcoin will also crash down to 2$ per LTC. In fact, all the CCs crash down to 2$
If BTC and LTC are both at $2.00 wouldn't that make BTC a screaming buy? I know I'd be buying a lot of BTC and if I had any LTC I'd be selling it (or converting it to BTC) like crazy. |
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Hello, i think asics are devaluating bitcoin and will continue to do so because they are extremely cost efficient (i mean electricity per gh). Can some1 with math skills count this: Compare the price of btc(not the 250 buble)/electricity price per gh from gpu era (until Feb 2013) to today bitcoin price/electricity price per gh from asic era.
I did that math for the current situation, using specs from Butterfly labs. Can't do historic though since I don't have the data. I came up with a value of $2.00/BC based on current difficulty and cost per GH. I agree with your assessment by the way. Been thinking about this a lot (since I am new) and it seems inescapable that mining will always regress to cost to (cost of electricity + hardware cost + margin) with electricity being the largest percentage $ wise. There is a huge delta right now in favor of miners but it has to close through either difficulty, price or a combination of both. |
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BTC value has been dropping steadily. Bad news for Winklevoss twins. So, I am predicting it will fall all the down to $2 range by the end of this year.
That's interesting. I came up with exactly the same value ($2.00) using some admittedly very rough (and relatively uninformed) back of the envelope math. DISCLOSURE: I am a total newb to BC. However I estimated that as the current true value of BC given the state of ASIC mining, but don't think it will actually get to that level since the same forces that will be driving the value down will also be driving the difficulty up at the same time. Thus, I came up with the two factors converging at $20.00 and I am using that as my floor. Well a little below that because it should overshoot it's bottom just due to momentum. I think I will start buying some below $20, definitely better than attempting to mine them. |
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Total newb here. I don't own a single bitcoin or fraction. Just spent two days immersing myself in reading forums and websites about it.
So after all my pondering and chin scratching it seems to me that bitcoin mining is headed to toward a point where miners are somply converting electricity into currency. I wasn't around but it seems that was a point it was at before, now ASIC has changed the game for awhile. If you can generate coin with ASIC right now you are in that sweet spot where your are ahead of the price curve, but of course you are also bending the curve at the same time against you.
As everyone already knows however you and everyone else will just be forcing the market find its new point of equilibrium which I figure must be supported by the cost of electricity plus some amount of overhead for hardware and other costs, and then some small amount of profit.
So just doing some rough back of the envelope math (I mean really rough), assuming electricity cost is .12 per MW, and assuming the threshold of profitability is being able to generate double the electricity cost in revenue I figure a single bitcoin is really worth about $2.00 today.
It doesn't make sense though that bitcoin would just simply drop to that point, and while it's dropping the difficulty will be increasing the entire time so now if I assume that the difficulty increases (thereby supporting a higher coin value) at the same rate as the price drops we now end up finding "equilibrium" at $20 per BC.
All of this of course assumes that mining cost is the SINGLE driving force behind the price of bitcoin, an assumption I am not really qualified to make but when you're making predictions you gotta make some assumptions as best you can.
Now I am not trying to predict the market for any other reason than trying to make up my own mind on whether to invest in ASIC miners or not and I have pretty well concluded that if I am even close to being right it is a BAD gamble. I think the better gamble is to simply buy BC directly when they are at, near, or even BELOW the equilibrium threshold, knowing that they MUST eventually go up (again assuming they don't simply vaporize). Gonna have to wait a few months for that though while we watch ASIC smash the rate down to the rate of electricity.
So I am a buyer at $20.
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