Estimated price after Difficulty increase?

[Notrem]

Hi

quick question: how do you think difficulty increase will affect bitcoin price?

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[DamienBlack]

I think most people buying and selling right now are informed enough to have already taken the difficulty increase into account.

The newbies are escaping their pen.

[Nythain]

*cough*difficulty doesn't drive price*cough*

[saqwe]

*cough*difficulty doesn't drive price*cough*

well I hope your not right, and those 42 Mhash... is this a laptop?


Cheers
Jan

[Notrem]

difficulty "drives" price in my opinion. When you earn less bitcoin, the value of it is higher. It's like with gold. When there's less gold in the world, it would be more expenseive

[DamienBlack]

This has been hashed many times. The relationship between difficulty and price is clearly very complex and and goes both ways. When the price hit $30, I went out and bought two new graphics card. So in that small case, the price helped push the difficulty up, not the other way around.

[Notrem]

but every time difficulty increases, the price go up

[Synaptic]

This has been hashed many times. The relationship between difficulty and price is clearly very complex and and goes both ways. When the price hit $30, I went out and bought two new graphics card. So in that small case, the price helped push the difficulty up, not the other way around.

Still glad you made that purchase?  Especially since by the time you actually got the cards the price was far, far from $30 (assuming mail-ordered)!

[DamienBlack]

but every time difficulty increases, the price go up

Then we have a bunch of stupid traders on our hands that can't look a few days into the future at a pre-scheduled event.

The price for the next difficulty increase is already baked into the current price, because everyone knows it's coming. This isn't to say that the price might not increase anyway, but it will be for different reasons. Honestly, the amount of bitcoins sold on Mt Gox that are freshly minted is only a tiny fraction. That tiny fraction getting a little smaller shouldn't have a big effect on prices. Price increases are mainly due to popularity increases, not difficulty increases. Demand is the driving factor. There are already 6,500,000 bitcoins out there. The 7,000 mined each day aren't that big a deal.

[DamienBlack]

This has been hashed many times. The relationship between difficulty and price is clearly very complex and and goes both ways. When the price hit $30, I went out and bought two new graphics card. So in that small case, the price helped push the difficulty up, not the other way around.

Still glad you made that purchase?  Especially since by the time you actually got the cards the price was far, far from $30 (assuming mail-ordered)!

I grabbed them at a store. They'll still pay themselves off, make a little profit, even if the prices never rise. I might have been able to make more by buying bitcoins when they bottomed out around $10, but it depends on the size of future difficulty increases.

[saqwe]

but every time difficulty increases, the price go up

 Price increases are mainly due to popularity increases, not difficulty increases. Demand is the driving factor. There are already 6,500,000 bitcoins out there. The 7,000 mined each day aren't that big a deal.

I guess you have a point there.