grod, I think you should be more realistic about difficulty. It simply can't drop to 1/4 over the next 2 months. Well it can but that would be an Armageddon. Price would basically plummet. If miners would leave network in such a huge numbers, network would be temporarily doomed. My initial entry would change or be on hold.
I do agree that with this massive sudden price drop we have witnessed in the last 5 days, difficulty will stop going up and might even drop for a few re-targets. But this drops won't be anything major. I'm expecting -3% difficulty drop at the most for this re-target and maybe next. After that miners will get used to a new price range and we will go back to business as usual.
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Thing is, everyone who joined after April and put money on the line is gambling. Especially people who bought coins when the price was above $15.00 and still haven't sold. Bitcoin for the masses is still totally new. Most of us got here when the price boomed from April $1 to June $30. Some started mining on a low scale, some went big, some started day trading on MtGox and some invested for the long run.
Since price ran up from April $1 to June $30 everyone who ever traded anything in their lives KNEW this was a bubble about to pop. When it did pop a smaller % of them KNEW bubble needs to deflate and we are still in this process today. You and I will agree on that. What we might not agree on is the future of the bitcoin. You as far as I read or understand, you think bitcoin has no future and price will plummet down to sub $1 and probably stay there forever, eventually it will die. Me on the other hand see a potencial in the future.
You might be right that bitcoin price will never reach $20 again, but that kind of speculation is just outright stupid to say. I figure you probably follow stocks and thing is that in most cases, like 85%+ you would be right. Once the stock ran its natural course it will most likely stay within a certain range forever. Not many run up exponentially for a while then totally collapse and run up again in the near future. But bitcoin isn't a stock, its fundamentals are different. There is no trailing P/E we could associate it with or has earnings or profit margin or anything like that.
Bitcoin is not an investment, it's a trading vehicle designed to work regardless of it's price in fiat money. It's functionality doesn't change if its worth $1 or $100. People greed wants it to be worth more. Eventually bitcoin price will get low enough so fresh money added to the market will be able to meet up with the supply. I'm almost 100% certain that will ultimately happen. I think it will happen in the range from $1 to $5.
I won't start buying before $6.00. I would rather miss the whole thing and forget about bitcoins all together then buy above that price or EVER chase it higher. But that's just me. When/if I will start buying, I know already the whole plan, which I might fine tune as we go along, but I won't ever go outside my comfort zone. I know exactly how much I will buy, when, how much it will cost me and when I will/might sell. There isn't anyone who could influence me in a way that I would change my plan drastically. I would/will still read what people are saying but not react on it unless the price/volume tells me so. That's how I made money in the past and will do so in the future.
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OK BTC Economist, so let me try this way. Lets say I'm well off, nice house, cars, business, family. Business makes me $350k per year after tax for the last 15 years, still growing steadily 10% yoy. Price of bitcoin is at $5.00 and I have a buy order of 1k willing to add 1k every $0.50 down to $1.50 where I would stop adding to my position. I would hold forever. If all would fill I have $26k on the line, with practically small chance of ever make it back.
Do you think I would care what your opinion is? Who are you? Are you a top trader at SAC ? You ever work at least at GS ?? Do you own a $10 mill yacht and will fly me out and explain to me why I shouldn't risk this $26k I'm willing to put on the line, because I like this bitcoin idea? Why should I listen to you what I do with less than a month of profits?
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But why you care ?! It's their money. Noone bought bitcoins hoping they will be worth less in the future so they can lose money. People bought, thinking its a good project and they like it so much that they are willing to put their money on the line. I don't understand why anyone should have a problem what some random person does with their money or time.
Lets say price drops to $5.00 and I buy some coins. Do you think I would care what some random monkey spews on some forum? Nope. At that price/moment I decided that my risk/reward is in my favor and I put my own money at risk. I wouldn't care if everyone would be msg me that I'm stupid. If it would drop more I would add more coins while forum monkeys would laugh at me, typing pages and pages how much money I have lost. It's not their money, so why would anyone care. If they get a kick out of posting shit like that, let them.
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Total hashrate is stable or if you want it your way it dropped from exactly 14.00 Th down to 13.80 Th, reason is a big price move lower from $14.00 area down to $10.00.
What I was referring in my previous post was that your title and your info is super misleading, reason you were most likely watching the numbers on bitcoincharts.com where they have a wrong formula to calculate total network hashrate. This has been discussed already in the past in other threads.
I do agree that we are dropping for the last few days but so far nothing major if you consider huge price move and the fact that it's summer in the northern hemisphere. Next difficulty will most likely stay within -+3%
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All this bulls and bears stuff is bullshit. Most of doomsayers are either broke or they won't buy coins even if they get super cheap.
Smart investor/speculator that heard/joined bitcoin in its boom days, is probably waiting for the price to get as low as possible. Why would they pay premium if the trend is still lower.
Example of a person who is willing to risk $15k into bitcoins
buys 1k at $5 buys 1k at $4 buys 1k at $3 buys 1k at $2 buys 1k at $1
he / she now holds 5k at an average price $3 and has put $15k at risk. If bitcoins are worth 0.00 in the future he/she lost $15k and walks away. They were smart and knew their risk. This $15k won't hurt them as much as might hurt $500 someone else. If coins are ever worth more in the future, he /she will eventually profit. Simple as that. Everything else all this bears/bulls you are a troll or whatever else forum name calling is a pointless background noise.
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ThomasV, you comparing 5000 years of gold history and some well designed code from a few years ago. Gold has been tested 64634 times in its history and somehow people still trust in it. Billions of them. Bitcoins on the other hand are new. 99% of the world never heard of them. If you think this will be the last version of the decentralized e-currency for the next 5000 years then you might have a point, but I'm 99.9999% sure it won't be. There will be better versions of decentralized e-currency in the next 5 to 50 years. While there will still only be one shiny commodity called gold, easy to buy / sell and easy to store for free forever.
Now for a basic simple math of bitcoin production cost...
radeon 6690 is not the best card but lets go with that ... overclocked can get approx 800 M-hash/sec at 350 W. At current difficulty 1.88 mill we get 0.43 coins per day. We need 2.3 days for each coin approx 56 hours. 0.35 kW * 56 hours = 19.6 kW of electricity per coin. Even at 25c per kW it only cost $4.50 per coin.
If your costs are higher, you either paying extra premium electricity or your mining rig is shit. Whichever of the two is your problem and you probably shouldn't even be mining.
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Average cost is around $3.50 per coin, maybe more $3.00, but we can throw in extra 20% and agree on $3.50. If anyone disagrees please post your exact math for me.
If todays production cost per coin is $3.50, some of the early miners don't really care, because production cost for their early coins was considerably lower. (Example of the 10,000 coin pizza)
FlipPro you are right and wrong in what you saying. First noone ever said mining will always be profitable. Second if the production cost is $3.50, noone ever said miners will have a 300% markup for a product that right now has a very limited use.
You have to understand that prior April to June price boom, from $1 to $30, this whole community had like couple of 100 miners, who all together had 3 Th of power or about 3000 GPU they minted 4 million coins up to that point. When the $30 boom hit people started unloading left and right and this same process is still well under way.
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skyhigh, the reason I'm saying the issue is minor is that while there has been 50%+ inflation, we've had a 1000%+ inflation of new Bitcoin adopters. There is no reason to be so skeptical as to assume we won't have growth during the next 6 months for example. With the adoption growth we've had, the price is rightfully much higher than it was in the past. How high it's "supposed to be" no one knows, it's obvious it isn't $1 or $30 but something in between.
The price should be around $13-$14 right now to sustain the level of growth we've had so far but clearly we're in a slump with low adoption rates and a ton of bad news. So, basically the main factor to take into account regarding inflation is the adoption rate and the other factor is how much miners believe in Bitcoin or how much they can afford to save.
In the current situation I'd say the price is not going to go below $9, perhaps not even below $10. More bad news is required for another slump like that. The demand for cheap coins at the $9-$11 range is quite decent and many think that price is lowish for selling.
Where it will go from here depends on many things, as I already said in my last post. It might stay here for a while but I don't think so. With all the bad news people will show strong support for good news if they come and if good news come, there will at least be a small rally. With lots of good news we will see a very strong rally. But that's all speculation, we might see quiet stagnation and more occasional bad news and the price will not go up, might even go down.
It's also true that for the functionality of Bitcoin it doesn't matter what the price is, but I personally care about Bitcoin in many different ways, as a miner, as an investor, as a supporter and in the future probably as a merchant as well. For some of my interests the price does matter.
I don't know what I should tell you. So I will just say, yes you are right and I am wrong. I guess you know better then me, price should be around $13-14. Ignorance is a bliss.
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I couldn't bother to read the whole thread. Did anyone told OP that he is a clueless newb ? Total hashrate didn't fall, network is still at 14 Th. What he and people like him are watching is wrong data on bitcoincharts.com. They are showing how lucky the network is at solving the blocks.
I hope you don't really think that network fall from 14 Th down to 11 Th or whatever it was due to miners leaving. When network is lucky bitcoincharts.com will show 16 Th when variance is not on our side it will show 12 Th.
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You two missing the point that this 7200 coins per day is basically bitcoins inflation right now. Whole network will only have 7 million coins next week, and we are producing 7200 per day, every day. That my friends is the current inflation. Basic math tells you that 7200 / 7.000,000 gets you 0.1% inflation PER DAY. It doesn't really matter how many coins miners try to sell on regular basis. What matters is that bitcoins are diluting 0.1% per day or over 50% in the period of one single year.
All this early inflation is neatly hidden from regular people who don't think about every detail. Most of the them joined during or after we had a price boom from April $1 to June $30+ and are now thinking bitcoin has to be worth more somehow. Bitcoin isn't an investment like so many thought. Bitcoin functionality doesn't change if its worth $1 or $100. People greed wants it to be worth more in fiat cash. You can only hope Satoshi doesn't start selling his 1.500,000+ coin stash.
7200 new coins per day is far from a minor thing. It's a huge thing, 50+% inflation in the last 365 days. There is no reason right now that with 50% inflation in the last year price would stay at the current levels.
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I don't know what all this fuzz is even about. It's hilarious though. All the miners who think their coins are worth more, they should not only stop selling, but start BUYING. Put all your cash online and see where it gets you.
Until then the market will have its way, and at the moment we are pointing downwards. Basically to the point where fresh money added to the market will be able to meet up with the daily supply of 7200 coins. If miners won't sell now it won't change a thing. They will all sell later much lower, thinking how stupid were they trying to fight the market. Seems like some don't even understand what that means.
New trading channel will most likely be $9 to $11, until next batch of 200k coins (in a month or three ) won't be able to meet the demand for all these coins and lower we go again. All this mumbo jumbo about bitcoins being worth more is based on the fact that price got so high, when everyone and their grandma was hyping this all over the internet. The result was we got a group of fools who started depositing all this extra cash all of a sudden buying 500k coins and running price from $10 to $33. It was a perfect setup. Well problem is, there is 7 million coins out there and most of those were mined when price was well below $5 not to even mention all the stuff from pre April time when price was sub $1.
Good luck to all the miners not selling here and now.
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OP you will be wrong this time....
New trading channel will be $9 to $11, before we will most likely head lower. This is still $30 bubble bursting, simply based on the fact that demand can't meet the supply of 7200 coin per day, every day. Supply adds up over a period of time and we get this bigger moves. Sure Mybitcoin and Poland doesn't help, but it really doesn't effect things as much as some people around here think.
In the future price will drop all the way to the point where it will be easy for the daily supply of 7200 coins to be met with $ value. Bitcoin production cost will only be a small part of the equation. If it will cost $5 to produce a coin and market won't be able to come up daily with $36,000 fresh dollars, unfortunately price would go below production cost. Noone ever said mining will always be profitable.
Network total hashrate is at 14 TH and growing at a high rate of 6% to 12% every re-target. Even if this growth would slow down considerably, less than 3% per re-target, network would still be growing by a lot. Every day there is more and more people finding out about bitcoins and they have decent radeon cards capable of mining. I'm sure there are 10 million cards on the internet right now, while whole network mines with less than 50k cards.
So network will keep growing overall, while price will drop to the level where new fresh money added to the market can meet 7200 daily supply. It doesn't matter if miners go on strike and don't sell anything for months. It would only be temporary change. It's all about market cap and total number of coins, which will next week reach 7 million.
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Wow Angelus !! Your mining rig isn't paid off yet ?! People are missing you in the other thread.
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kokojie thanks for the warning !
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Not anytime soon. Plus we getting more and more miners joining everyday. Cost $2 to produce a coin that is currently valued $11. Noone said mining would always be profitable. People would / will mine if the price is $5 and cost to make a coin would be $7.50
Why you asking? Or was it more of a rhetorical question ?
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It's sad to see so many greedy fiat monkeys in a project like this. If price will ever crush to as low as $2.5, why would it ever go back to $100 ? Just because YOU jump on board with your sorry ass $5000 If it drops to $5 and a bunch of sorry ass monkeys buy in for $5000 each, the 82.8% chances are it will continue to drop and eventually wipe them all out before going anywhere ever.
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Network is so big that it started its usual natural growth, which is from 6% to 12% per re-target. Unless there is some major change in the usage for bitcoins, most re-targets will fall within this 6 to 12%, with some extra variance from time to time. Bitcoin news from the May to July boom has spread around internet on various forums and news sites and we get new miners joining every day. This aren't dedicated miners buying 50Gh, but mostly random people who own a decent radeon card.
I'm sure there is 10+ million mid to high end radeons on the internet and even bigger number of people who will upgrade to 6x series in the next year. Bitcoin will keep penetrating wider audience and network will continue to grow at a high rate for some time. Network right now is at 13.5 Th and growing, expected to hit 20 Th by October. Difficulty will be around 3 million at that time. Bitcoin price, unless something major happens, will be most likely around $10 and EVERYONE will still keep mining as usual. It will still only cost less than $5 to make the coin worth $10. Not the gold rush times but still very nice way to subsidize your new radeon card.
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Why you bother with 4 re-targets, if you always change them at least once before they happen. My dart throwing 1.7 1.8 2.0 mill will be closer on average than any 3 you will ever be able to calculate and NOT CHANGE at least once. So far you predicted / calculated re-targets but you soon discovered a better model or something else came up and you came out with new and new numbers. Calculate 3 re-targets and stick to them. I predicted my 1.7 1.8 and 2.0 on July 9th and I'm sticking with it. You changed your July 9th prediction at least 6 times by now. If I didn't write this or if you won't change the way you do your thing, you will keep adjusting and changing your future predictions.
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