Shouldn't have ignored it. This bounce has now faded.

Time to get comfortable with double digits.

Really, labor theory of value?

Exactly, most people couldn't give a fuck, and that's why I find the idea questionable of there being lots of money on the sidelines but just waiting for difficulty to increase.

You are right on the money about the scamcoins, and that includes Blightcoin as well. There can be no second proof of work chain in the long term, doesn't even matter if the algorithm is different. Eventually, it will be attacked by people with vested interest in Bitcoin. It all amounts to sucking money from unsuspecting people.

Sell in May and go away.

Here is a great past analysis of it that begun in early May 2011.


There was another dip beginning December 2012 following a period of sideways. Two consecutive difficulty decreases, one increase and another decrease that ended up the bottom.

Sure, some are more inclined to mine at a loss etc., but the upwards motion is first technology and second price driven.

"Wow, Bitcoins look like an interesting hedge. Time to allocate a few % of my holdings and pour a few millions into it – ah, the difficulty is only 15 million and hashrate 150 TH/s. How overvalued. Will wait a couple months, then."

Seriously, back when we routinely had people buying multimillion USD worth of BTC, I don't think the difficulty was of any consideration. I don't believe it is a metric people base investment decisions on, other than mining hardware.

One case that can be made though is that it's a cyclical alternation between investment in BTC and investment in mining hardware as the one gets unprofitable and the other more attractive. But I'm not sure, most of the time, both are attractive at the same time and unattractive at the same time.

Is the collective wisdom NOT buying Bitcoins purely because they deem the difficulty too low? If not, it has no effect on price.

However, I believe there is another effect, and it's that an increase in profit margin is bullish because miners can afford to speculate with a larger portion, ie hold them. Currently, the profit margins are of course rapidly decreasing due to sideways/downwards price action and still skyrocketing difficulty. My assumption is that the percentage of the daily mining subsidy (3600 BTC) that is released to the market is increasing because the costs that have to be covered are rising.

I don't expect hashrate to top out very soon, and that's thanks to the incompetence of the suppliers who are lagging extremely. There's already hardware for multiple hundreds of TH/s it seems. I do expect it to top out again sometime, as always, people will order far more ASICs than profitable for some of them in this arms race and some of them will have to drop out. Funny thing though that the prices for ASICs can plummet far further on the open market than GPUs because they have no other purpose than generating profits in Bitcoin's POW. Quite risky particularly when you have no clue when they will ship.

Discussion on scammer tag: https://bitcointalk.org/index.php?topic=232145.0

Nagle?

http://www.downside.com/

Needs an update, man!

This bounce is playing out now. Enjoy the hopium.

Actually I'm good on that front, I never missed a major Bitcoin wave up and I don't have any plans to do so in the future. At the time, it was simply useless to sell into the market because it was too easily moved at those points. Back then, we really did have manipulators. Somewhere from $4 on the way down I just stopped trading it to make BTC while losing USD, held the BTC and went away. I was sitting on profits, but of course it still hurt.

Only thing I try to do is hedge my risks for the major waves and position myself. If this market goes back to a good value proposition (and a similar despair!), I will see things similarly again as I move a good portion to a paper wallet. If I am wrong, I will see it and buy back. I don't fight the market. Everyone has his strategies, I prefer a more active approach to managing my risk (BTC gains are actually only secondary) while riding the long-term bull and it's working well for me.

Any non-trader must admit that there are hype cycles with Bitcoin as a bunch of newbies quickly flow in and then many of them slowly flow out as they get bored, and it's expressed in the bubbles. What remains at the end is the long-term trend.

BTW, this topic was created on a day when Bitcoin ranged from 3.8 to 4.5 and was on its way up to 7.22 where it would then consolidate for many months around 5. 7.22 was broken only in July 2012, half a year after we topped out at 7.22.

People didn't start calling Bitcoin dead until Oct./Nov. Sentiment extreme occurs only near the bottom.

The Great Dollar Extraction is upon us.

You know, speaking of supernodes, it's kind of a pity reptilia isn't here to provide us with entertainment as to why we aren't making any progress to his 300k USD before Christmas.

BTW, does anybody have that epileptic black/white bear gif? It was a whole bunch of bears. This is important.

I just found this, that's cool too:

Epilepsy warning https://i.imgur.com/YMeG4sX.gif

Are you going for some more ASICs or are you just looking to buy lower? I thought you never wanted to sell precious BTC to speculate.

Yep, that's what I had in the back of my mind. Thanks, so they were indeed responsible for 3 out of 5 million of Bitpay's volume that month.

You will find that the sales volume on miners will largely depend on the profitability of an ASIC which depends on difficulty/price. Historically, the miners' profit margin always went near zero or even to negative values during major corrections (difficulty itself went down due to this), so, I would not count on this sort of gold rush shovel "economic activity" to endure for very long, certainly not at volumes of the past.

Hm, I had the impression it was 2-3 million. It's a while ago. Batch 2 maybe?

AFAIK they accepted it in the past for at least one of their batches and accounted for the majority of Bitpay's volume on that month.

As I said, Bitpay figures are largely inflated by Avalon sales. Actual commerce figures from bitcoinstore, Reddit Gold and Humble Bundle show the harsh truth.

Exactly right. Bitcoin has never been a billion dollar market in the first place. The figures most people are touting from Bitpay are hugely inflated because of mining equipment, and the evidence like data on sales of Humble Bundle, Reddit Gold and bitcoinstore suggest that people don't use Bitcoin as a currency in any significant way.