If 272.000 people today each owned 25 Btc bitcoins would be out of supply.

[istar]

Just a thought about how rare they are.
It only takes a few people to believe in bitcoins for them to go out of supply.

Thats how rare they are.

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[skyhigh]

And where do you think are this same 6.85 million coins right now? In the hands of people, and the number is a lot smaller than 272.000.

Problem right now is that a very small group of people, less than 5000, hold the majority (90%+) of all the coins minted so far. People in this group want to sell them for $$, but there isn't enough new capital to meet their supply at the moment. It will take a long time and tons of trading to spread out the coins from a small 5000 group of miners to your 272.000 people.

The question then is why would 272.000 people hold 25 BTC each ? Bitcoin is not an invesment. People's greed and speculation ran up the price from April $1 to June $30+. It could happen again, and again or it could not. Bitcoin will still preform same functionality either its price is $0.5, $5 or $500 per coin. People greed for fiat money wants it to be more.

As long as mining is still as profitable as it is right now, prices will keep sliding lower overall. Bitcoin *real* US$ value is between $1 and $5 right now depending on electricity cost and work put in to mine them. It will take a major change in bitcoin usage for price to start rocketing again anytime soon. We need services services and more services for that to happen.

[evoorhees]

As long as mining is still as profitable as it is right now, prices will keep sliding lower overall. Bitcoin *real* US$ value is between $1 and $5 right now depending on electricity cost and work put in to mine them. It will take a major change in bitcoin usage for price to start rocketing again anytime soon. We need services services and more services for that to happen.

Why will prices move lower as long as mining is profitable? Regardless of miners' profit, the same supply of coins is released each day. In fact, if they are less profitable you may see miners sell more of them to pay for various things (depends on their demand curve and I don't pretend to know it).

Also, why is the "real" value between $1 and $5? Because that's what it costs to make? Since when is the value of something determined by its production cost? I could hire 10 workers at $10/hr for 10 hours to dig a hole for me. Does that mean the "real value" of the hole is $1000?  No.

Don't confuse cost and value. Look at the US Gov... do you really think it's WORTH $3-4 trillion per year just because it costs that much? 

[ercolinux]

Just a thought about how rare they are.
It only takes a few people to believe in bitcoins for them to go out of supply.

Thats how rare they are.

Or in other hands if today half of the people you count (136.000)  wants to buy goods for as less as 100$ in bitcoins every months the BTC value must jumps to 20$ to cover the request (ok its a big semplification,  you've to take in account the reserves not used, the fact that the same bitcoin can be used more then 1 time in 2 months, etc... but is to give an idea of how much market we can sustain at a certain price).

[billyjoeallen]

As long as mining is still as profitable as it is right now, prices will keep sliding lower overall. Bitcoin *real* US$ value is between $1 and $5 right now depending on electricity cost and work put in to mine them. It will take a major change in bitcoin usage for price to start rocketing again anytime soon. We need services services and more services for that to happen.

Why will prices move lower as long as mining is profitable? Regardless of miners' profit, the same supply of coins is released each day. In fact, if they are less profitable you may see miners sell more of them to pay for various things (depends on their demand curve and I don't pretend to know it).

Also, why is the "real" value between $1 and $5? Because that's what it costs to make? Since when is the value of something determined by its production cost? I could hire 10 workers at $10/hr for 10 hours to dig a hole for me. Does that mean the "real value" of the hole is $1000?  No.

Don't confuse cost and value. Look at the US Gov... do you really think it's WORTH $3-4 trillion per year just because it costs that much? 

The same supply of coins is not released to the exchanges every day.

People who mine and hold do not increase supply on the open market. People who mine and sell (AKA mercenaries) increase supply.  Similarly people who trade and hold don't increase supply while those who trade and sell do.  increasing supply and static demand result in price drops. Really, this isn't rocket science.

[Cluster2k]

Just a thought about how rare they are.
It only takes a few people to believe in bitcoins for them to go out of supply.

Thats how rare they are.

This calculation very much reminds me of the silver bulls, who sometimes write that if every American bought just one ounce of silver they could drive the price up by X, where X is usually 2 to 3 times.  The fact that the vast majority of Americans have no care for holding silver bullion doesn't stop the wishful thinking.  An even smaller percentage of those people would have any desire to own bitcoins.

It seems to me bitcoins are being pushed in two opposite directions.  One crowd wants to use them as a Free currency (free of government interference).  Money for the people by the people.  The other crowd wants bitcoins to rise in value (preferably exponentially) so they can make a fortune selling for government currencies.  The two are mutually exclusive, seeing as bitcoin is a highly deflationary currency.  The fact that bitcoins lost to crashed hard drives can never be regained makes the case for far fewer than 21 million ever being possible in existence.

[NetTecture]

The question then is why would 272.000 people hold 25 BTC each?

To  have them like in a wallet to pay for goods. not an invvenient way once things start moving from more shops. It is VERY inconvenient to wire some funds into an excahgne then wait for the BTC to clear just to amke an order - even if not hoding them for value, a certain amount of "wallet" has to be.

[skyhigh]

The question then is why would 272.000 people hold 25 BTC each?

To  have them like in a wallet to pay for goods. not an invvenient way once things start moving from more shops. It is VERY inconvenient to wire some funds into an excahgne then wait for the BTC to clear just to amke an order - even if not hoding them for value, a certain amount of "wallet" has to be.

I completely agree. There's a big catch though and I mentioned it in my post. We need services in bitcoins that make sense for random people to go out and hold these coins in their wallets. Random Joe won't care about bitcoin if he can pay for the same service with $us if the price would be same. Why would he bother holding 25 BTC in his wallet if he already has a *wallet* that he can use on the same site for the same product. His current *wallet* is called credit card.

Cluster2k understands what is going on, he was even being a bit polite. Majority, read (90%+) wants bitcoin to first rise in value, so they would be worth more in fiat, then as a result some of this majority would use bitcoins with the rest of the worlds users. Right now there is only a small group of people that want to use bitcoin for its designed functionality. This two groups aren't 50:50. It's more like 98% of people that are in the bitcoin right now just/only wants it to be worth more in $$. This is the reason why outsiders see bitcoin as a ponzi scheme. The vast majority of bitcoin user base only wants OTHERS to keep buying coins, because as a result price would rise. It's that simple. Services and bitcoin functionality doesn't matter to this group that much. It's nice what it can do, but it would be 10000x cooler if bitcoins would rise in value to lets say $500 per coin and they could sell it to the greater fool and finally feel/think like they are worth something in the fiat world.

Bitcoin project needs a sea of service that make sense and some of the best services should be so hardcore that they only accept bitcoins, so a random Joe needs to go out his way to be able to buy that product. Later on when bitcoin would be widely used every service that sells in bitcoins should offer discounts if users pay with them instead of fiat money. Until then this is just a niche project for a super limited small group that has a big dream of making it big in the real world with a simple thing caller mining. A thing which almost anyone can do and its product, bitcoins sell for 600% of the production cost.

[GeniuSxBoY]

I think the statistic for real money is:

5% of the world's population owns 95% of the world's money.

[ercolinux]

I think the statistic for real money is:

5% of the world's population owns 95% of the world's money.

Last stats I've read (referring to 2000-2001) tolds: 1% owns 40% of total, 10% owns 85%, but the worst thing is that the lower 50% of population own 1% of wealth.
I think that we are not so far for the BTC economy: I think that there could be 1% that holds 40-50% of the BTC ( as you can see here http://bitcoinreport.blogspot.com/2011/02/latest-bitcoin-top-100-rich-list.html 2 account alone holds near 10% of total BTC - near 5million $ and 1,6million $ at current change),  a 10-15% holds the 80%. But a good 30-40% has less than 1% of bitcoins.

[neptop]

It takes time to spread and with price fluctuation it will. What's important right now is people to enter the market by accepting Bitcoins. The price is very stable right now, while hard values, like EUR and USD aren't that stable so actually Bitcoins _CAN_ be very interesting.

It's properties are very interesting especially for trading virtual goods and services. So Bitcoin based web host or VOIP are great services to offer. I think they are also very safe services. You will most likely have any big losses. It is also important to have serious businesses.

And of course making things more easy and accessible would be good. If someone has enough knowledge, especially about security a Bitcoin based Paypal alternative would be a good idea, because it would make things easier for people who want to use Bitcoins. I am sure one can make a lot of money doing so. Both for transaction fees and from people buying additional Bitcoins.

[FlipPro]

And where do you think are this same 6.85 million coins right now? In the hands of people, and the number is a lot smaller than 272.000.

Problem right now is that a very small group of people, less than 5000, hold the majority (90%+) of all the coins minted so far. People in this group want to sell them for $$, but there isn't enough new capital to meet their supply at the moment. It will take a long time and tons of trading to spread out the coins from a small 5000 group of miners to your 272.000 people.

The question then is why would 272.000 people hold 25 BTC each ? Bitcoin is not an invesment. People's greed and speculation ran up the price from April $1 to June $30+. It could happen again, and again or it could not. Bitcoin will still preform same functionality either its price is $0.5, $5 or $500 per coin. People greed for fiat money wants it to be more.

As long as mining is still as profitable as it is right now, prices will keep sliding lower overall. Bitcoin *real* US$ value is between $1 and $5 right now depending on electricity cost and work put in to mine them. It will take a major change in bitcoin usage for price to start rocketing again anytime soon. We need services services and more services for that to happen.

You're wrong. Bitcoins "real" US$ value right now is Bitcoins "real" value of about $13.65. Nothing determines Bitcoins value except for Bitcoins value itself... All other weird pegging theory's are wrong.

[neptop]

It's like a 500 EUR note is not just worth the paper. It also doesn't describe the European economy. It's like stocks don't describe a company's value. It only describe it's current rating. Think about the financial crisis and the huge drops of stocks and currencies. It's not like anything like energy consumption went down.

There are just people (and sometimes machines) who say they will give you one thing for another. This doesn't require any reason. In fact it IS very individual. If you like a certain kind of music and simply don't like another one you will value them differently. If you think pink sweaters look stupid they probably won't be worth anything to you. If you are blind you will not buy a book or think a lot about what lamp you'll buy. Think about social networks. They have been around for decades and then suddenly Facebook becomes famous. Stuff similar to Twitter also existed a long time ago. And what people want (and value) depends on their culture and their entire life.

That's also a problem with just thinking about supply and demand. If ten people on the whole planet want something it doesn't mean there will be anyone producing what they want. On the other hand there are very rich people who will pay a lot maybe someone will make it or they'll produce it by themselves and not pay anything. Besides that people also need to know about stuff, so demand can be produces. That's how the ad industry works. Often they create demand for something people would have never needed. Sometimes people want stuff because other have it and sometimes people don't care about stuff, because anyone has it anyways. All this has influence on how much people want something and therefor what they are willing to do/pay for it. This creates the value.

Supply and demand is correct, but IMHO that _very_ simplified way of describing it, because people get a certain picture that can be very far from reality. Besides this there are people who are simply generous, etc.

[evoorhees]

I think the statistic for real money is:

5% of the world's population owns produces 95% of the world's money products and services.

Fixed that for you 

[neptop]

I think the statistic for real money is:

5% of the world's population owns produces manages 95% of the world's money products and services.

Fixed that for you 

Refixed? 

It's funny, everyone here loves to define terms. Like "Is Bitcoin a currency, a fiat, a good, the Messiah, ...?"

Forget about making money! Bitcoin needs to survive, so we have an endless source of funny and interesting discussions! And (non)logarithmic charts!

[GriTBitS]

to DA Moon


i did my part!

[antimattercrusader]

to DA Moon


i did my part!

Brought 'er back from the dead, eh?

[GriTBitS]

to DA Moon


i did my part!

Brought 'er back from the dead, eh?

Hahahah, Yeah i love the old articles! The more i read them the more Bullish i get. The amount of bears that are total fucking wrong is awesome! The fact you can't short BTC on margin is the best thing on earth! If you sell you lose! Simple  as that, yes you might make some profits and buy back later on the rise. But once you go bearish on something its hard to get back to the bullish stage so you will end up being wrong eventually and lose big! Realized loses are the worst loses!

[theonewhowaskazu]

very few people will be able to buy 25 BTC.

[beetcoin]

very few people will be able to buy 25 BTC.

seeing as 25BTC is currently $27k in today's money, i'd say very few people would be able or willing to buy them today.