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Author Topic: is the value of bitcoin increasing or deacreasing?  (Read 620 times)
Mondy (OP)
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September 21, 2013, 10:24:52 AM
 #1

on the onehand BTC become harder to mine and therefore the value goes up. but then again each day more BTC are mined ?

Kluge
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September 21, 2013, 10:34:19 AM
 #2

Mining difficulty does not cause change in BTC price. Price causes change in mining difficulty (in the form of increasing hashrate - though technological improvements are obviously a far stronger cause of mining difficulty change).

While mining subsidies/fees are inflationary pressure, it's decreasing in significance (~.0000327% inflation/day). At the next block halving in 2-3 years, the inflationary pressure will be trivial. Assuming BTC adoption (rather the amount of "value stored in BTC") is increasing more than .0000327%/day, Bitcoin value would rise. If that isn't true, then value would fall.

Though... talking fundamentals is pointless when price (or, "value stored in BTC" as determined by use of fiat to buy BTC through exchanges) is determined by speculators.
Mondy (OP)
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September 21, 2013, 12:54:10 PM
 #3

Mining difficulty does not cause change in BTC price. Price causes change in mining difficulty (in the form of increasing hashrate - though technological improvements are obviously a far stronger cause of mining difficulty change).

While mining subsidies/fees are inflationary pressure, it's decreasing in significance (~.0000327% inflation/day). At the next block halving in 2-3 years, the inflationary pressure will be trivial. Assuming BTC adoption (rather the amount of "value stored in BTC") is increasing more than .0000327%/day, Bitcoin value would rise. If that isn't true, then value would fall.

Though... talking fundamentals is pointless when price (or, "value stored in BTC" as determined by use of fiat to buy BTC through exchanges) is determined by speculators.

thankyou for your detailed answer

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