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Author Topic: who thinks value will drop back down to single digits?  (Read 3798 times)
qed
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June 18, 2011, 01:11:21 PM
 #21

At the current difficulty will be very hard to see bitcoins under $10, with the next jump it will be impossible.

1. Difficulty doesn't determine price.
2. If the network continues growing (and it will since there is still profit to be had) mining revenue will soon approach electricity cost. Everyone will want to dump their hardware and bitcoins to get out of this unprofitable business which will drive the cost lower. Not a prediction, just a counter-scenario to what you describe is "impossible". This could be theoretically countered by an influx of new money seeking to buy bitcoins, but I'm not sure what would cause that since most of the attention Bitcoin has been getting has been negative.

What you wrote doesn't make much sense. Difficulty determinate the lowest exchenge value of bitcoins. Mining not worth => no transactions possible. I also miss how, in your scenario, more ppl will start mining when it will already be unprofittable.

With "impossible" i meant "very unluckily unless ppl are dumb as a rock".

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June 18, 2011, 01:20:00 PM
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What you wrote doesn't make much sense. Difficulty determinate the lowest exchenge value of bitcoins. Mining not worth => no transactions possible. I also miss how, in your scenario, more ppl will start mining when it will already be unprofittable.
[/quote]

It's more likely the other way around, the exchange value of bitcoins determines the highest difficulty possible. That would be the point where mining stops being profitable, thus noone would buy new hardware, stopping the difficulty increases.

There are people holding large quantities of bitcoin, either bought at low prices or mined at low difficulties. These people might sell at a price where mining is unprofitable, if they fear a crash for example. Or if they just need the money.
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