how long till 1mBTC = 1USD?
also what will you think of fees then?
WTF is a mBTC ? Terms like this lead to endless confusion. Some of us have been using the term mBTC since 2011. I now prefer to abbreviate it as mB since that is more compact. My guess is that the price of a dollar will drop to 1 mB at some point in the second half of this year before rising back to at least 2 mB. The dollar is currently trading at about 7.2 mB. |
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Difficulty follows hashing power pretty tightly as far as i can see. So i don't think that difficulty is driven by transactions.
Anyway, isn't difficulty supposed to keep the number of blocks found constant despite hashrate?
It is driven by the decision of node operators to add or subtract hashing power. Ultimately, this decision is driven by the prevailing sentiment of node operators of an expectation of profit. Price leads difficulty. Aah, here i make a distinction between expectations about price and the actual price. I would agree that expectations lead hashpower. But expectations are future prices, at best. Take a moving average of price and compare it to difficulty. You will find that price leads difficulty in this way by a fairly predictable ratio. It is pretty darn reliable. I was just describing a theoretic mechanism by which it works out that way. I don't think you can conclude that a price component is driving hashrate. I think the data is flawed and that actual hashrate could just as well drive price. I'm not denying that there is a correlation, tho. Anyway, to test your claim i had to take a 100 day average to get from price to something that is shifted enough to fall on top of the difficulty data. The difficulty (and according to the data, the hashrate) is correlated to price so closely that peaks happen even when price changes at that time suggest the outlook is bad. If i look at the 2011 peak i can see that according to the available data more hashrate was added after the crash/hack/turnaround then before the 'crash'. Even better, hashrate and difficulty only peaked when bitcoin was in freefall and already around $10. Difficulty then stayed pretty constant for some time while price collapsed to under $5. That doesn't make a lot of sense to me. If price expectation was the actual drive then mining would have started collapsing right after the crash and would not have slavishly repeated the peak of the price. It doesn't make a lot of sense for a node operator to add hashing power after price peaked and is on its way down. What is much more likely is that actual hashrate was much closer in time to the price movements. What also seems likely to me is that there is alot of high frequency content missing from the data. But then again, the graphs fit so well  You have to remember that back in 2011 everybody was saying "Sure the price has been dropping, but it could jump up again any moment now!" What happens is that as the price rises people see difficulty is not as high as the price, making mining profitable, so they start building a mining rig. That takes time, and there will be people who do not get their mining going until after the price has peaked. But they do not want to have wasted all that energy they spent building this thing, so they start running it anyway. Also, when the price drops, people who are already mining have already done the hard work of getting the thing set up, so they keep on mining and hoping the price will go back up again; if they are still marginally profitable they will keep mining but not add any more capacity. The other thing to consider is that technology has been improving, and so as more efficient ways of mining come to market the total hash rate will increase even if the price remains constant. |
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You answered it already, kind of.
Once the amount of "friction" is overcome people will switch to an improved system.
But that is also not the whole factor: Facebook took over myspace not only because it took over it's consumerbase. It started from it's own consumerbase which wasn't a subset of myspace, other people who didn't previously use social networking started to use it and only after it became larger than myspace people started the switch.
This is also why the current "alt chains" aren't a real competition to bitcoin they are essentially part of it. Real competition can only come from outside the project, on a new codebase and from a new group of people as early adopters. I don't even think that such a new cryptocurrency would call itself a "coin" or compare itself with bitcoin for that matter.
It being competitive with bitcoin would most likely be only be apparent after the fact.
You can make the argument that the introduction of ASICs to BTC makes DIY mining much more difficult and that Scrypt as a technology is a very real competition to BTC. Any gamer with a PC can generate LTC/FTC but you need specialized hardware ATM to mine BTC, so newer users miners will likely start with some kind of scrypt based coin before moving onto BTC. The reason all SHA based alts have not been a real competitor is that the specialized hardware used for btc can also be used for those alt coins making adoption very difficult. New users of bitcoins start by buying some, not by building a mining rig. |
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Sure, they'll still be collected as vintage items for their sentimental value the way old NES games are still collected. But mining them will be easy enough that they'll have no real value.
How would that be, given that mining becomes more and more difficult over time by design? less ppl mining = difficulty drops Maybe I should have qualified that with "and there is a limited supply by design". At this point in the game, I can't foresee us reaching a point where there would be a significant number of coins left over that would be "easy enough" to mine, regardless of the dip in value. With the impending number of people with ASIC hardware, at a relatively small electricity cost, they will be able to mine the vast majority of the remaining bitcoins by 2033. As improvements happen with ASICs, maybe the price comes down on them, or maybe they maintain a premium cost but with increasing hashrates and lower power requirements. It just seems more likely that there would be a select set of enthusiasts doing the mining for the long term and it wouldn't ever be "inexpensive" for just anyone to jump in and mine a significant number of coins for themselves. Of course, I could be wrong. Seeing that we have ASICS up and running, the difficulty is never going to get back down to CPU profitable levels. There are bitcoin enthusiasts who will mine at a loss just to keep the network going. But if bitcoin prices go way down and usage drops, you will be able to pick up a used ASIC for pretty cheap, and so mining could turn out to be cheap after all. The other (IMHO, more probable) extreme is that prices and usage go up, and so mining will continue to be expensive, always trending toward zero profit. Remember, the miners get to keep the transaction fees, so in the future even after all the bitcoins are minted there will still be some reward for miners. But transaction fees are dependent on usage, so if nobody is using bitcoins then mining will have no reward. |
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Anyone willing to give me some truth why probably no one responded to my post?
Is it my doing? What could I improve?
Sounds like a decent way to approach investing in bitcoins. I would suggest this as a good approach, but I would suggest one taking this approach should not check the prices too often. A good thing to do is have a few orders to buy and sell up on the exchanges at +/- 10, 20, 50% from current price just so you don't miss any sudden swings up or down. |
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It took you a week to make 30%? that's lame
Right, it is not 7% per day, but some weeks I do better and some weeks I do worse. If I took more risky positions I might be able to get more, but I try to have a moderate risk profile. |
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Paying for online services like hiring a programmer. My wife gives flute lessons over skype, I have a friend who teaches English over skype; since their students might be anywhere in the world, bitcoin is great as a payment system.
I like to buy ebooks for bitcoins.
Stocks/bonds work well with bitcoins.
A while ago I suggested bitcoins could be useful for things like closing on a house, where people today typically bring a certified check.
Of course, there are the illegal markets, where having the anonymity of bitcoin is beneficial. I hear you can buy drugs or hire assassins with bitcoin, not that I would know anything about stuff like that.
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What is that universal reason that applies to all country that do and will ever exist, and makes you totally convinced that "nowhere" would do it? Countries like to be in control of their currency. And yet there are a bunch of countries using the Euro, and another bunch of countries which either us the USD or have pegged their currency to it. I would like to print all the money that I need, but since I have little power, nobody will let me do that. That being said, I would presume that "nowhere in the world" and "never in the history of mankind" are unlikely useful for this purpose, but for "freedom of speech" sake... you are the master of your keyboard.
Bitcoin would not be improved by being made legal tender anywhere in the world, and nowhere would do it. They would not need to be doing it to improve bitcoin, all it would take is for some jurisdiction which has a large population of bitcoin users to add bitcoins as a legal tender option to acquiesce to the convenience of the residents, they would not even have to make it the only legal tender. Legal tender just means you can use it to pay things like taxes and legal judgments. |
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The only way some other cryptocurrency will overtake bitcoins is if it brought something new, so you would not have to compare it to bitcoins. Why get a copy when you can just use the original?
Why get silver when you can just get gold? Why get a Honda when you can just get a Ford? Why get a double-cheeseburger when you can get just a cheeseburger? I take it by your generalizations that you either A) don't understand the differences between Bitcoin or Litecoin; or B) you understand them better than I, have come to the conclusion that they don't matter, but refuse to explain why in any sort of detail. Gold is like 1500 $/ounce, silver is like 30 $/ounce, so if you want to buy in increments of a couple hundred dollars, then silver might be better for you. Until a satoshi is worth a significant amount there will be no need to make a cryptocurrency with a more granular unit than bitcoins. If I drive a honda and you go out and buy a ford, it does not make the road any less useful to me. But if we each pick different cryptocurrencies, then they are all less useful because less people will accept them. A double-cheeseburger adds benefits to the cheeseburger (more meat), and so people want it. To me, the differences between bitcoin and litecoin seem superficial. They have a different number of total coins, but that just affects the exchange rate, you just divide by a different number when converting a price from USD to BTC/LTC. The blocks come faster, but you need to wait for more blocks to get the same confirmational surety, so you end up waiting just as long anyway. The difference in algorithm is no difference to me, since that is all under the hood so to speak, until one or the other is cracked they are the same to a user. |
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I don't know about you, but most people deploy the buy low sell high strategy.
Yeah, anybody can buy low and sell high, but knowing which to buy and when to sell is what separates the winners from the losers. |
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It is just like bitcoin
"..except it's an offshoot that uses a different method of mining than bitcoin (scrypt) that has it's own advantages and disadvantages." Seems like a pretty sound explanation to me. Why wouldn't they just be able to say that? My point is that they cannot talk about it without also talking about bitcoin. The only way some other cryptocurrency will overtake bitcoins is if it brought something new, so you would not have to compare it to bitcoins. Why get a copy when you can just use the original? |
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Betamax was a superior technology than VHS but it never took off
+1 it's all about adoption and what is a standard. I don't see the media talking about litecoin do ya? Not always the best makes it to the most adopted. I think bitcoin will have upgrades to make it lightweight and more efficient, hell I even think that a branch of bitcoin maybe something like bitcoinX/bitcoin 2.0 whatever you want to call it will take over and people will be able to transform their old bitcoins to the new version of the coins for free or something. How would the media even talk about litecoin? "Have you heard of the new up-and-coming electronic currency system, Litecoin? It is just like bitcoin, but with a different name and not as many people use it. If you don't know about bitcoin, here is how it works ..." |
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Here is how I have been making a huge profit ...
Oh hell, no, I am not going to share my strategy! Why would I give you my money making advice for free? If everybody did it I wouldn't make so much money!
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Wtf is this? Are you trying to make a point?
look at the volume of each trade. OK, so you listed a bunch of trades with very low volumes. Again, what is your point? |
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Wtf is this? Are you trying to make a point?
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The bitcoin character should just be changed to ß (ascii character 225)
Then you could just assign it to your gaming keyboard (macro key) and be cool like that.
Though, this might mix up the Germans somewhat.
Do the germans currently use that symbol as an abreviation for money? Or anything related to money? |
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My prediction is that in the future the price will be relatively stable, so the cost per block will be determined by the transaction fees. Essentially, we (the bitcoin users) will set how much energy is used by setting our transaction fee amounts.
If this will be the situation (and i agree this is likely) then i think that bitcoin will become too expensive to use as a regular currency. If i want to buy a bottle of milk chances are the transaction fees will be more then the milk or the transaction will take a very long time. Both would make bitcoin unworkable as a currency for daily use. It would require a cheaper bitcoin frontend to make small transactions economic. And this is why I think people predicting ubiquitous use of bitcoins for everything are full of baloney. Bitcoins were from the beginning designed to be more of a reserve currency than an instant payment option. If you want to pay your friend 0.1 mB to cover the cost of a beer, then it is better to use Ripple or some other system than to actually send the tiny amount through the block chain. |
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As Bitcoin become more popular, the Bitcoin currency symbol will be added to future keyboard
What bitcoin currency symbol? (Before you get all huffy and point out BTC, remember there is nothing official in bitcoin) I like to price things in millibitcoins and use the mB abbreviation, no special symbol required. |
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If dollars hyperinflate, then $100k may not buy much.
This is the stupidy of the deflation argument so often quoted on these forums, most people with any investments/wealth keep it in property/stocks/income generating assets. These assets largely outperform inflation, so real values go up not down over time. Most people, especially in here, don't understand that most "assets" are not investments because they have been brainwashed by banks to think that their devalued car is an asset. Their house is an asset. And so on. When in reality, if it were not for the housing bubble, most people would never see any kind of profit from a home sale. And you certainly cannot expect to profit from selling most cars. Yet banks view this form of chattel as something with value and therefore brainwash you to believe that you are making money by owning them and borrowing from the bank against them. The stupidity of people never ceases to amaze. A house is most definitely an asset. Maybe you need to check the meaning of the word 'asset'? A house may not be an income generating asset, but it is none-the-less an asset. |
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I'd like to start a discussion about the viability of bitcoin in the future on basis of energy.
Bitcoin is set on a path that requires increasing amounts of computation to function.
Moreover, it requires the internet (or some other high speed network) to operate.
All this computing and communicating costs energy.
Growth of the bitcoin network implies more nodes communicating with more nodes. The posibility space for transactions will grow faster than the number of nodes.
Energy spent on mining will dwarf all other costs. Also, this energy is easy to predict, because energy spent on mining is a simple function of Bitcoin price and total block award. This is because mining has very low barrier of entry, and this ensures that as long as it is profitable, new miners will join, until the most inefficient miners are at the break-even point. And the most profitable miners will try to expand their operation. This makes it that each block costs somewhere around (0.5 * block award * price) to (0.75 * block award * price). And since awards are paid in Bitcoins and electricity is paid in local currencies, this makes the situation that all mining costs hit the exchanges every day, and push the price down. This can currently be estimated to be $150.000 to $250.000 each day (using price of $90), and this amount of fresh money must enter the exchanges every day, or the price will go down. At this point we have a temporary delay in the "mining difficulty follows price" process , because of the change in technology and delays in deliveries of ASIC miners, so mining is very profitable at this point, and this reduces the selling pressure on exchanges. This, plus block award halving is why we have this current Bitcoin bubble. Very nice analysis. I would like to point out that the block reward drops in the future, and so in the distant future it would be accurate to write (cost/block) = ((0.5 to 0.75) * transaction fees * price) My prediction is that in the future the price will be relatively stable, so the cost per block will be determined by the transaction fees. Essentially, we (the bitcoin users) will set how much energy is used by setting our transaction fee amounts. |
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