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Author Topic: Bitcoin economics?  (Read 724 times)
bevo
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October 11, 2013, 06:11:34 AM
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Can anyone explain how bitcoins are valued? Wouldn't their value eventually decrease as more are mined or purchased?  Huh
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orymh
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October 11, 2013, 11:27:36 PM
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Bitcoins have value only because people believe they do. This is true for most currencies, even government fiat currencies - they're only viable as long as people believe in the governments that back them.

Bitcoin is somewhat protected from inflation because there is an absolute limit to the number that will ever exist. There will never be more than 21 million Bitcoins total. As more and more people want to use Bitcoins, the value of each BTC will rise, because of the increased demand. That's the hope and the theory, anyway. We won't know for sure until we all wait and see.  Grin

jerelimZ
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October 11, 2013, 11:34:24 PM
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Can anyone explain how bitcoins are valued?


Simply supply/demand like other things.




 
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dragonkid
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October 11, 2013, 11:34:51 PM
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Can anyone explain how bitcoins are valued? Wouldn't their value eventually decrease as more are mined or purchased?  Huh

 Smiley

pedrog
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October 12, 2013, 01:30:31 AM
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Pure supply/demand.

cowandtea
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October 12, 2013, 03:01:43 AM
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It won't cause difficulty is increasing and its hard to mine Bitcoin. So a lot people would buy Bitcoin instead and push up the price.

Shallow
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October 12, 2013, 07:23:06 AM
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A diminishing source would most likely not lower the price yet raise it as it becomes rarer.

nahtnam
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October 12, 2013, 07:23:23 AM
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I am also a little confused... By supply and demand, do you mean by mining or by purchasing over a trade company?

cowandtea
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October 12, 2013, 09:15:31 AM
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I am also a little confused... By supply and demand, do you mean by mining or by purchasing over a trade company?
Miners produce coin and provide supply
People who want to buy bitcoin make the demand  Smiley

Good thing is miners are producing lower coins then before
If demand stay the same then price go up Smiley


nahtnam
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October 12, 2013, 02:25:48 PM
 #10

I am also a little confused... By supply and demand, do you mean by mining or by purchasing over a trade company?
Miners produce coin and provide supply
People who want to buy bitcoin make the demand  Smiley

Good thing is miners are producing lower coins then before
If demand stay the same then price go up Smiley



If that is true, then the price will go up for sure because I know there will be much more demand then there is now/was before...

monbux
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October 12, 2013, 03:05:28 PM
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Can anyone explain how bitcoins are valued? Wouldn't their value eventually decrease as more are mined or purchased?  Huh

They are valued at the price others value them.
That is why there is no fixed steady price of bitcoin, and why it's always changing.  The amount of demand is constantly changing.
Usually the more the demand, the higher the price.  The more bitcoin selling, the lower the price.

pedrog
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October 12, 2013, 08:56:19 PM
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I am also a little confused... By supply and demand, do you mean by mining or by purchasing over a trade company?

Mining is the bigger picture, but a miner may not want to sell immediately, supply here are the people that want to sell, demand are those people who want to buy.

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October 12, 2013, 09:05:31 PM
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I am also a little confused... By supply and demand, do you mean by mining or by purchasing over a trade company?
Miners produce coin and provide supply
People who want to buy bitcoin make the demand  Smiley

That is wrong. The supply comes from people selling bitcoins or buying stuff with bitcoins (of which miners are only a small part). The demand comes from people buying bitcoins or selling stuff for bitcoins.

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October 12, 2013, 09:13:59 PM
 #14

Look at an exchange,

see what people are buying and selling at. these agreements and transactions at any given price affect the final aggregated exchange rate.

https://btc-e.com/

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