network terahash goes up, but not the price of btc

[yrtrnc]

Ive seen a steady price increase lately!! Although will it be able to keep up with the difficulty the Asics will cause. I dont know.

[kwoody]

Balls. That is all.

[kalleguld]

The price of Bitcoin, like all prices, are determined by supply and demand.

Mining doesn't increase supply (since there will always be 50BTC / ~10min).
And it doesn't increase demand, since miners don't want to buy BTC.

So mining does not affect the price of BTC.

[cloudytoday]

If more mining rigs use FPGA and ASIC, then those miners will be able to sell for less. So there will be less resistance to a fall in price.

[BurtW]

We have had almost three difficulty increases in this last month, the hash rate has increased.

Did you even take the time to look at the hashrate-chart?
It has been everywhere between ~19TH/s and ~24TH/s within the last 30days, right now where at ~20TH/s, so where exactly has it increased?

Are you really trying to argue over the fact that the difficulty is going up (meaning = the average hash rate is going up by definition)?  See the actual data in this post:  https://bitcointalk.org/index.php?topic=115333.msg1243847#msg1243847  It is just silly to argue over facts, because, well, they are facts.

[Gabi]

why is this? shouldn't the increase in terahash bandwidth cause an increase in price of btc?

i mean it means that more people are fighting over blocks and its rewards

And how does that increase the price?  Do people pay to see these guys fight for blocks?

Yes, there are more people fighting for the block. But why should i pay a block more? If a block is worth x$ then i'll pay x$, no matter how many people fight for it.

[BurtW]

why is this? shouldn't the increase in terahash bandwidth cause an increase in price of btc?

i mean it means that more people are fighting over blocks and its rewards

And how does that increase the price?  Do people pay to see these guys fight for blocks?

Yes, there are more people fighting for the block. But why should i pay a block more? If a block is worth x$ then i'll pay x$, no matter how many people fight for it.

The World Bitcoin Mixed Martial Arts cage match on Pay-Per-View!  Watch as miners fight for blocks of bitcoins!

[kalleguld]

If more mining rigs use FPGA and ASIC, then those miners will be able to sell for less. So there will be less resistance to a fall in price.

No, miners are always selling for as much as they can, they are not (that) stupid.

[cloudytoday]

If more mining rigs use FPGA and ASIC, then those miners will be able to sell for less. So there will be less resistance to a fall in price.

No, miners are always selling for as much as they can, they are not (that) stupid.

Yes, they will look for the highest price. But if the price drops (for other reason) ASIC miners will still be able to have profit. ASIC will not cause price drop, but will reduce resistance to price drop, until everyone has ASIC, difficulty is x500 higher, and mining costs are high again as today.

x500 from https://en.bitcoin.it/wiki/Mining_hardware_comparison - Mhash/J for GPU is about 2, for ASIC is 1000.

At current difficulty a GPU miner cannot profit if price falls below $5.50, but ASIC miner can profit at $0.02 (this is just electricity cost, ignores hardware cost).  Look at http://bitcoinx.com/profit/index.php, with difficulty=3million, electricity $0.15/kwh, power 1500W with 1500GH/s for ASIC (eg BFL minirig SC) or 3GH/s for 4xGPU.

Good business plan would be - buy BFL ASIC minirig, sell coins at $5, force GPU miners to quit. From http://bitcoinx.com/profit/index.php you profit $40000 in 1 month - time to buy another BFL ASIC. But difficulty might reduce from GPU miners quitting, so maybe you profit even more. Or maybe you cause crash in bitcoin and lose everything :-)

Biggest problem: do BFL really have 1.5TH/J hardware for $30k?