Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[aminorex]

 At current difficulty growth rates, if hardware margins go to zero, by July it will cost $3000 to buy and operate hardware which produces 1 btc after 1 year of operation.

How is that relevant? It doesn't change the equation of how much money needs to come into BTC. Difficulty will not grow forever, it's likely to overshoot putting small scale miners into the red, sure. But that doesn't drive the price.

Margins drive price.  The equation is a constraint but cannot drive price and it only applies under the assumption that the coins are sold.  If I buy a miner in the full knowledge that it will produce 1 coin costing $3000, that means I do not plan to sell that coin until it goes over $5000.  Supply withheld from the market is no supply at all.

 The only miners selling coins at this price are wealthy attackers who want to burn fiat in order to drive btc down.  They exist only in the minds of the paranoid.

[NewLiberty]

You know the amount of time it takes to move new money to bitstamp.
You know when the price moved down.
You can expect new money to be attracted to the sale on bitcoins at bitstamp and when.

[ChartBuddy]

Explanation

[ShroomsKit]

You know the amount of time it takes to move new money to bitstamp.
You know when the price moved down.
You can expect new money to be attracted to the sale on bitcoins at bitstamp and when.

Bitcoin has been going down for months. Every time we crash i hear the same story how cheap coins will attract new people. Where are these people?

[lynn_402]

A quote from Oscar Wilde, about what people selling Bitcoins at <500$ are:
"A man who knows the price of everything and the value of nothing."

[ardana123]

You know the amount of time it takes to move new money to bitstamp.
You know when the price moved down.
You can expect new money to be attracted to the sale on bitcoins at bitstamp and when.

Bitcoin has been going down for months. Every time we crash i hear the same story how cheap coins will attract new people. Where are these people?

Locked in on Gox and, for most of them, permanently out of the game. Most people underestimate the Gox debacle had and will have on bitcoin in the future. Lots of money was lost there, putting people permanently out of the game. Gox was one of the major, if not the major propellant upwards. With that money out of the game and not supporting the high price anymore, the price is set to go a lot lower than 500.

[esse83]

You know the amount of time it takes to move new money to bitstamp.
You know when the price moved down.
You can expect new money to be attracted to the sale on bitcoins at bitstamp and when.

Bitcoin has been going down for months. Every time we crash i hear the same story how cheap coins will attract new people. Where are these people?

Locked in on Gox and, for most of them, permanently out of the game. Most people underestimate the Gox debacle had and will have on bitcoin in the future. Lots of money was lost there, putting people permanently out of the game. Gox was one of the major, if not the major propellant upwards. With that money out of the game and not supporting the high price anymore, the price is set to go a lot lower than 500.

Bitcoiners seems almost unable to grasp that very simple fact. MtGox historically was the aggressive price leader either down or up. The leader is gone and with it a ton of liquidity is dead in the water. The question is not why the price is not going up, but instead, why should it go up. If China bans banks from dealing with exchanges then another huge chunk of liquidity is removed, yet again. Time to deal a bit more with reality instead of acting like a big questionmark when you see the price falling.

[tarmi]

 At current difficulty growth rates, if hardware margins go to zero, by July it will cost $3000 to buy and operate hardware which produces 1 btc after 1 year of operation.

How is that relevant? It doesn't change the equation of how much money needs to come into BTC. Difficulty will not grow forever, it's likely to overshoot putting small scale miners into the red, sure. But that doesn't drive the price.

Margins drive price.  The equation is a constraint but cannot drive price and it only applies under the assumption that the coins are sold.  If I buy a miner in the full knowledge that it will produce 1 coin costing $3000, that means I do not plan to sell that coin until it goes over $5000.  Supply withheld from the market is no supply at all.

 The only miners selling coins at this price are wealthy attackers who want to burn fiat in order to drive btc down.  They exist only in the minds of the paranoid.

unless I am a large scale ASIC producer.

Because I could produce and have my miner crowd-funded. I could also inflate miner prices. By doing so, I could afford to have really big mining farms almost for free and have very large margins.

I could dump all the coins I produce and make really fast and big profits.

[aminorex]

. Lots of money was lost there, putting people permanently out of the game. Gox was one of the major, if not the major propellant upwards. With that money out of the game and not supporting the high price anymore, the price is set to go a lot lower than 500.

Permanently out of the game means dead.  I don't think they died.
Gox victims have a lot of btc to buy if they hope to recover. 

[aminorex]

unless I am a large scale ASIC producer.
...
I could dump all the coins I produce and make really fast and big profits.

  Even if hardware is free, which it is not, exponentially rising difficulty means it will cost more than $500 in power alone to produce 1 btc this time next year.  It would be utterly insane to sell mined coins into the market.  You only sell if you have a contractual obligation with a fund.  I know miners who do have such obligations.  Their customers are not selling those coins at these prices, no sir.

[GaliX]

unless I am a large scale ASIC producer.
...
I could dump all the coins I produce and make really fast and big profits.

  Even if hardware is free, which it is not, exponentially rising difficulty means it will cost more than $500 in power alone to produce 1 btc this time next year.  It would be utterly insane to sell mined coins into the market.  You only sell if you have a contractual obligation with a fund.  I know miners who do have such obligations.  Their customers are not selling those coins at these prices, no sir.

unless they have to pay bills.

[creekbore]

. Lots of money was lost there, putting people permanently out of the game. Gox was one of the major, if not the major propellant upwards. With that money out of the game and not supporting the high price anymore, the price is set to go a lot lower than 500.

Permanently out of the game means dead.  I don't think they died.
Gox victims have a lot of btc to buy if they hope to recover. 

Yeah, that's how people think..."hhmmm...I lost a load of money on BTC...I have no money left...I'd better work harder to buy MORE BTC".

C'mon...

[molecular]

unless I am a large scale ASIC producer.
...
I could dump all the coins I produce and make really fast and big profits.

  Even if hardware is free, which it is not, exponentially rising difficulty means it will cost more than $500 in power alone to produce 1 btc this time next year.  It would be utterly insane to sell mined coins into the market.  You only sell if you have a contractual obligation with a fund.  I know miners who do have such obligations.  Their customers are not selling those coins at these prices, no sir.

There's some big operations using renewable power now, I've not done the sums but they should be profitable at much lower levels. Imho its the only direction mining can take as electricity costs translate almost directly into profits.

Renewable energy is expensive to generate and the valuable but somewhat perishable ASICs can't be sitting idle when the sun doesn't shine and the wind doesn't blow. I'd like to see the cost calculation of these renewable miners. I highly doubt it makes sense.

[bitgeek]

Gox is not out, they still admit to hold 1/3 of the money, the quiestion now is when will they pay back? I don't really understand what's going on with them, they lost some BTC and still hold some, why not redistribute those among their clients to at least show some good will?

[ChartBuddy]

Explanation

[adamstgBit]

unless I am a large scale ASIC producer.
...
I could dump all the coins I produce and make really fast and big profits.

  Even if hardware is free, which it is not, exponentially rising difficulty means it will cost more than $500 in power alone to produce 1 btc this time next year.  It would be utterly insane to sell mined coins into the market.  You only sell if you have a contractual obligation with a fund.  I know miners who do have such obligations.  Their customers are not selling those coins at these prices, no sir.

There's some big operations using renewable power now, I've not done the sums but they should be profitable at much lower levels. Imho its the only direction mining can take as electricity costs translate almost directly into profits.

Renewable energy is expensive to generate and the valuable but somewhat perishable ASICs can't be sitting idle when the sun doesn't shine and the wind doesn't blow. I'd like to see the cost calculation of these renewable miners. I highly doubt it makes sense.

i've been looking into solar for fun
and it seems to me pretty much any size system will take about 10years to pay itself off
It almost makes more sense to buy into some guaranteed 1-3% investments...
But there are some real advantages to owning a solar system, when there's a power outage your pretty much unaffected... hmm that is all i guess.
cleaner for the environment is some what debatable took a lot of energy to build the system, the batteries certainly aren't environmentally friendly...
pretty sure solar doesn't make much sense.

[podyx]

You know the amount of time it takes to move new money to bitstamp.
You know when the price moved down.
You can expect new money to be attracted to the sale on bitcoins at bitstamp and when.

Bitcoin has been going down for months. Every time we crash i hear the same story how cheap coins will attract new people. Where are these people?

oh.. they are buying

every crash is a transfer of coins from weak hands to strong hands, hence why u will see bubbles in bitcoin

[JorgeStolfi]

Gox is not out, they still admit to hold 1/3 of the money, the quiestion now is when will they pay back? I don't really understand what's going on with them, they lost some BTC and still hold some, why not redistribute those among their clients to at least show some good will?

If the bankruptcy court sees those coins as valuable property, they will not allow their distribution.  Creditors must  enter the queue; AFAIK employees have priority, then "secured" creditors (banks or anyone who loaned money with specific assets reserved as guarantee), then all other creditors (which includes the clients).  The court may decide that those coins must be sold to pay the first creditors in line, for example.

There is also the problem of defining how much debt MtGOX has toward each client.  The balance in each client's account at closing time could be one choice, but then the court will have to trust MtGOX's internal accounting (what if Mark claims that client "Tibanne The Cat" had 700,000 BTC in his account?).  Another choice could be how much each client deposited minus how much he withdrew, ignoring all trades made; it would be easier to verify, and more just in many ways, but the most successful traders would be extremely unhappy, of course.

Whichever way it goes, it may be an important legal precedent, even if it will not be binding outside Japan.

[lebing]

So I heard the Chinese are good at ping pong
http://www.bit-sky.com/index.php/english/663-nongovernmental-currency

[adamstgBit]

unless I am a large scale ASIC producer.
...
I could dump all the coins I produce and make really fast and big profits.

  Even if hardware is free, which it is not, exponentially rising difficulty means it will cost more than $500 in power alone to produce 1 btc this time next year.  It would be utterly insane to sell mined coins into the market.  You only sell if you have a contractual obligation with a fund.  I know miners who do have such obligations.  Their customers are not selling those coins at these prices, no sir.

There's some big operations using renewable power now, I've not done the sums but they should be profitable at much lower levels. Imho its the only direction mining can take as electricity costs translate almost directly into profits.

Renewable energy is expensive to generate and the valuable but somewhat perishable ASICs can't be sitting idle when the sun doesn't shine and the wind doesn't blow. I'd like to see the cost calculation of these renewable miners. I highly doubt it makes sense.

i've been looking into solar for fun
and it seems to me pretty much any size system will take about 10years to pay itself off
It almost makes more sense to buy into some guaranteed 1-3% investments...
But there are some real advantages to owning a solar system, when there's a power outage your pretty much unaffected... hmm that is all i guess.
cleaner for the environment is some what debatable took a lot of energy to build the system, the batteries certainly aren't environmentally friendly...
pretty sure solar doesn't make much sense.

we have an 'on grid' system and it makes heaps of sense...folks here can't get a system quick enough...power costs have close to doubled in the last 12 months and are set to rise further...we only have six panels but make enough power that our bills are going down.  Many are getting 12/15 panels and actually getting credits. But we get more sunshine hours than most

As for the investment, it will take about 6 years to 'pay off' in our example but you also have to remember that it adds considerable value to your property both economically and socially.  Most people also report getting a good feeling by doing the right thing environmentally (but I know most here care little for the environment)

Battery systems are a different beast.
Power goes out...play cards, talk to each other, enjoy the lack of 'hum'.

I can see how it would make tons of sense in area where you get a lot of sun and power cost are high.
not sure it makes much sense here in the north.
i'm hoping the tech improves a bit, then i might be incline to set up a small system and help the environment in a small way, getting a good feeling by doing the right thing, is almost as good as BTC profits, almost!