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Author Topic: Death to the mercenary miners!  (Read 3639 times)
billyjoeallen
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July 19, 2011, 06:29:32 PM
 #41

That's like saying the main reason why the Yankees won is because the Red Sox lost. It's true, but it doesn't explain anything.
It's only necessarily true if they played in the same game. There is an almost infinite amount of options which can make you wrong, so if you can't see a single one of them it must be because you don't want to.

There are an infinite number of options that CAN make me wrong, but none that actually do. You don't seem to understand the difference between proximate cause and cause-in-fact. I'm arguing cause-in-fact and you are disputing proximate cause. Basically you are arguing against a position I am not even taking.

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July 19, 2011, 07:12:46 PM
 #42

You've made the mistake of assuming the only "supply" of coins is miners.  That's not true.  The BULK of the supply is actually people who already own coins putting them up for sale.

I haven't made that assumption at all. I claim that without additional coins being mined and brought to market, supply would equal demand and price would be stable OR supply would be less than demand and prices would rise until supply did equal demand.

This is just a restatement of the notion of supply and demand.  We pretty much accept it as an axiom that prices will go higher, lower or sideways if supply is increased, decreased, or maintained, when demand is held constant.

Your real argument seems to be that some portion of the people selling bitcoins are doing so in error.  They would be better off, in your opinion, if they would only stop doing things than they think are right, in their opinion.

Be careful when thinking that you can make decisions better for everyone else than they can for themselves.  There are horrible things lurking down that road.

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The 7200 coins per day are not a "significant" supply to the market. 

yes. yes they are. imagine an enclosed 5 gallon tank that is completely filled with water. Now add another pint of water. What do you think that does to the pressure? That's why small cap assets fluctuate so wildly.

Liquids don't really compress.  The pressure would be infinite unless the tank burst, and you don't need a pint for that, even just a drop will do.  Pedantic, I know, but this post got me in the mood.

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July 19, 2011, 07:17:52 PM
 #43

High volume is not a measure of miners selling bitcoins, OR of speculators selling/buying... For example...

1 man mines a coin, sells it.  This causes price to drop.

A trading bot buys coin, resells it $0.05 higher than buys it again $0.05 cheaper, rinse and repeat.  This causes high volume.

Conclusion:
Miners selling coins is what is driving the price down.  Trading bots buying and selling coins repeatedly is driving the volume up and stabilizing the price so you can see the nice steady decline that miners liquidating their coins are causing.

I hope that is simple enough.  

To make another point, if 7,200 coins are being created daily, it would take an injection of around $100,000 per day just to keep the price stable.  Lets say 1/2 of those miners are not selling the coins... That is still $50,000/day that needs to be injected into bitcoins from other currencies.  Obviously, we are not seeing that, hence, the price is declining.


*I don't believe early adopters selling coins are causing the price to drop.  They are in no hurry to cash out or they already would have and wouldn't be causing a slow motion crash due to them being early adopters and believing in the BTC...

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[]
billyjoeallen
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July 19, 2011, 10:10:39 PM
 #44

You've made the mistake of assuming the only "supply" of coins is miners.  That's not true.  The BULK of the supply is actually people who already own coins putting them up for sale.

I haven't made that assumption at all. I claim that without additional coins being mined and brought to market, supply would equal demand and price would be stable OR supply would be less than demand and prices would rise until supply did equal demand.

This is just a restatement of the notion of supply and demand.  We pretty much accept it as an axiom that prices will go higher, lower or sideways if supply is increased, decreased, or maintained, when demand is held constant.

Your real argument seems to be that some portion of the people selling bitcoins are doing so in error.  They would be better off, in your opinion, if they would only stop doing things than they think are right, in their opinion.

Be careful when thinking that you can make decisions better for everyone else than they can for themselves.  There are horrible things lurking down that road.

Quote
The 7200 coins per day are not a "significant" supply to the market. 

yes. yes they are. imagine an enclosed 5 gallon tank that is completely filled with water. Now add another pint of water. What do you think that does to the pressure? That's why small cap assets fluctuate so wildly.

Liquids don't really compress.  The pressure would be infinite unless the tank burst, and you don't need a pint for that, even just a drop will do.  Pedantic, I know, but this post got me in the mood.

My point exactly. Bitcoin has relatively low capitalization right now which means that small changes in supply or demand cause dramatic changes in price.  This volatility scares away investors both in coins themselves but also builders of infrastructure, which is worse.  It works for me, because I buy coins on the cheap, but it is bad for both the miners themselves and for the growth of the Bitcoin economy. It's better for everybody if we wait and sell near all time highs. That way we can reduce volatility and make money rather than increase volatility and lose money.  It's win-win or lose-lose. 

insert coin here:
1Ctd7Na8qE7btyueEshAJF5C7ZqFWH11Wc

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