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Author Topic: Why aren't more people buying bitcoins?  (Read 6021 times)
wndrbr3d
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September 01, 2011, 02:09:26 PM
 #41

Bitcoin seems to be sustaining itself right now without invested capital. If you look at the hourly and 24h "sent" volumes, people ARE using it. The issue of value (specifically on the exchanges) is actually around people putting more capital in the market.
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September 01, 2011, 02:21:11 PM
 #42

Bitcoin seems to be sustaining itself right now without invested capital. If you look at the hourly and 24h "sent" volumes, people ARE using it.

There is a large amount of bitcoin volume not associated with MtGox/TH/etc trade traffic, but how much of that is from mining pools doling out rewards and people moving coins between PCs they own?  Does anyone have reliable statistics on what proportion of transfers are used to buy goods or services?

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September 01, 2011, 02:24:13 PM
 #43

Then googlecoin will show up with the same properties but guaranteed to be used to buy google services and you'll have a working cryptocurrency.  I think it's make or break time for bitcoin around now, and break looks more likely.
IMHO.

No one company could ever run a cryptocurrency that would have the same qualities as Bitcoin.  That would defeat the purpose.


Ok, what's the quality that googlecoin can't have that bitcoin has today?

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September 01, 2011, 02:35:46 PM
 #44

No one company could ever run a cryptocurrency that would have the same qualities as Bitcoin.  That would defeat the purpose.
Ok, what's the quality that googlecoin can't have that bitcoin has today?
Decentralization?
If it were run by one company then it would by definition not be decentralized.

Of course, Google can just take the Bitcoin source, strap their name and logo onto it and release it as Googlecoin on github, but what would be the point of that?
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September 01, 2011, 02:38:47 PM
 #45

no one is buying cause btc are finished as a speculative investment... its in its death throws

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September 01, 2011, 02:54:58 PM
 #46

No one company could ever run a cryptocurrency that would have the same qualities as Bitcoin.  That would defeat the purpose.
Ok, what's the quality that googlecoin can't have that bitcoin has today?
Decentralization?
If it were run by one company then it would by definition not be decentralized.

Of course, Google can just take the Bitcoin source, strap their name and logo onto it and release it as Googlecoin on github, but what would be the point of that?
It could still be decentralized, even if it's run by google, just pegged against their services.
Or do you mean decentralized development? Project management?

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September 01, 2011, 07:13:20 PM
 #47

I agree that the main thing causing lack of growth of bitcoin is that it is just a geeky pain in the ass not geared towards the common person and the common person would not even understand a need / use for it except maybe for two things right now:

#1 silk road

College kids find out about silk road, which only takes bitcoin, which leads them to find out about bitcoin and want to buy stuff.  It is ridiculous but this is probably the number one thing holding the bitcoin to any real value right now because why in the hell would you go through all the hoops and hassles for anything else?  Wire money to some strange internet company you no nothing about to get a weird intermediate currency / commodity to buy what? Overpriced socks and bad dry and canned food? Why not just BUY the stuff with your currency.


Silk road will never catch on because college students already have a place where it is extremely easy and safe to buy drugs, it's called college.

Luckily for Silk Road, the majority of drug users in the world (that is, the majority of people, most of whom are drug users in one way or another) aren't in college. And as of today this forum has 38,053 members, while Silk Road has about 30,000. So yeah... sounds like a real flop.
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September 02, 2011, 12:30:40 AM
 #48

When I got into bitcoin prices were where they are now, and difficulty level was 1,500,000 less than it is now.  So at that time, mining made sense.

Right now, mining and investing in mining hardware really doesnt make much sense.  Buying bitcoins right now is a much better investment, IMO. 

Why would anyone want bitcoins?

The point of mining is to get dollars, not bitcoins.

And how does one get these dollars from mining bitcoins? Selling to people who don't mine - so if  you can't answer your own question, "Why would anyone want bitcoins?" then no one would pay real cash for them, and no one would bother mining them - so there needs to be real uses for them that someone is willing to convert their dollars into them for some reason, and there are currently only a few reasons as I stated in my above post.

You are being silly if you look at bitcoin from only a mining perspective because you shoot yourself in the foot if there are no real practical easy reasons for someone who is NOT technical to want bitcoins and be able to obtain them easily without being an internet computer nut of the deepest degree.

People use fiat money because they are just trained to do so.  How many people actually understand the monetary system? Very very very few.  Finally more awareness is coming out, but the Fed had the wool over people's eyes for almost 100 years now.






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September 02, 2011, 06:32:32 AM
 #49

A few more bear "trollings" that don't get mentioned.

Power companies and AMD don't accept bitcoins.  Several tens of thousands of dollars do get siphoned out of the bitcoin ecosystem every month, if only by people who are smart enough to cash out to pay for their expenses.   Do the math assuming 14 terahash of network capacity and 300 mhash for 200 watts, 15 cents/khwhr (10c/khwhr is about as low as it gets in the US and doesn't include transfer fees or taxes).  Those numbers are a bit on the conservative side, IMO.  But that would tell you roughly how much new investment is needed to pay to run the network as it is today.

Now, not everyone is selling bitcoins to pay for power and hardware -- that is true.  And those will be the bagholders, once again IMO.  Every pyramid has them, and there's definitely a pyramid built on top of bitcoins.

We've stalled out in community growth, and I see that as an incredibly bearish development for the pyramid.  And here is the beginning of the end: https://cablesaurus.com/index.php?main_page=index&cPath=10&zenid=6c61a72a1daba7a1d88f406b9de540f0

When all that was needed to get into bitcoins was a CPU, the number of potential participants in the bitcoin ecosystem numbered in the billions.  When that became GPUs we dropped to hundreds of millions.   When that became only high end and/or multi-GPUs from AMD, tens of millions.  And soon, with the only practical way to participate becoming direct buy or investment in specialized hardware capable of ONLY bitcoin mining the pool of potential participants will shrink to tens of thousands.

Until you actually have some bitcoins to play with and send to someone it's very hard to understand WHY they're valuable.  And that is the big danger -- reducing the potential community to the current disciples.  Everyone else will look at the whole bank -> dwolla -> mtgox -> local wallet chain and either fail to understand or just decide to buy gold instead.

I expect bitcoin to be around for a about six more months, shrinking both the community and $/btc.  That's why I am not buying until I see what develops.  I can buy far more when BTC is well under a dollar, if I still think it's worth doing.


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September 02, 2011, 03:11:31 PM
 #50

grod,

you might want to read up on fpga mining. that was just a 50 dollar deposit to claim a fpga setup.
it will end up costing you 500+ dollars for 90-200 mh/s which is a ridiculous purchase if you ever
want a reasonable ROI.

also ASICS, except for hobbyists like Forz, are a dream still. And even the setups Forz built were more
to see if he could do it/experiment and the ROI on them is still much worse then a radeon 5830 for $130.

gpu mining is not going anywhere... with the price of BTC going down, cut in half essentially when ASIC
talk was at its peak.. must have broken a lot of possible plans.
grod
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September 03, 2011, 06:08:52 AM
 #51

grod,

you might want to read up on fpga mining. that was just a 50 dollar deposit to claim a fpga setup.
it will end up costing you 500+ dollars for 90-200 mh/s which is a ridiculous purchase if you ever
want a reasonable ROI.

Looks like the pricing is $610 for 180 mhash at 15 watts.   Sure, it's ridiculous at $8/coin with power costs of $3/coin.  How about at $1/coin with power costs of $1/coin with GPU and 10c with FPGA?  Sure, you could mine 6x as many coins with GPU.  Maybe even 10x as many.  But you'd make $0/day vs 90c/day.  So difficulty and price both adjust down until the FPGA miners are pulling in the same ROI for a $600 investment that a current $600 3x 5830 rig yields.  Sure, the 3x5830 rig could mine 10x as many coins -- but with zero or even negative return for each coin.

Also, look elsewhere for my guestimate that we could see the same 200 mhash boards retail for under $300 once volume picks up.  Heck, one of the FPGA board producers mentioned high volume pricing would make them competitive with GPUs on a mhash/$ level at a 1000 unit level.  I believe it -- a 100 mhash capable FPGA retails for $180 at digikey.  Wanna take a guess at what the same FPGA would wholesale for direct from Xilinx in 1000, 1000 and 100k unit volumes?

One of the early adopters cashing out 30k bitcoins at today's prices could start producing and selling $300 200 mhash boards.  For bitcoins even, to recoup their original 30k investment.  Negotiate a future volume rebate deal with Xilinx, move a few million $ worth of product and profit.  Use that profit to develop an ASIC for the next upgrade cycle.

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September 03, 2011, 02:57:33 PM
 #52

Another question is "what happened to all the bitcoin worker-bees? There was a time when these forums were littered with posts about exciting ideas to spread the word. Now it seems new peers just show up thinking they are going to get rich sitting on their duff.
Go out and explain bitcoin to people. Sure most will just look at you like this -   Huh  But ocationaly someone will grasp it and look like this -  Kiss

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September 03, 2011, 05:32:59 PM
 #53

It's much harder to generate interest in a down trending commodity. 

It's a lot easier to spin a positive, engaging story when it's more of "I just spent $400 on video cards and they're pumping out $60 a day for me!  Let me tell you all about this awesome bitcoin network and why people are excited about it" as opposed to "yeah, a bunch of suckers got into the bitcoin pyramid and are currently being hosed."
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September 03, 2011, 05:41:35 PM
 #54

When I got into bitcoin prices were where they are now, and difficulty level was 1,500,000 less than it is now.  So at that time, mining made sense.

Right now, mining and investing in mining hardware really doesnt make much sense.  Buying bitcoins right now is a much better investment, IMO. 

Mining took off because people were getting something for nothing, and the whole idea of "if the market crashes, I still have the hardware" prevailed.

I know, because that was my view too.

People aren't buying more Bitcoins because Bitcoins are a fucking stupid investment vehicle.
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September 03, 2011, 05:58:29 PM
 #55

Quote
It's much harder to generate interest in a down trending commodity.  

It's a lot easier to spin a positive, engaging story when it's more of "I just spent $400 on video cards and they're pumping out $60 a day for me!  Let me tell you all about this awesome bitcoin network and why people are excited about it" as opposed to "yeah, a bunch of suckers got into the bitcoin pyramid and are currently being hosed."
Right.

Quote
People aren't buying more Bitcoins because Bitcoins are a fucking stupid investment vehicle.
Also right.  Originally, Bitcoin was supposed to be a medium of exchange, a form of money that was easy to e-mail. That didn't happen much. As an investment vehicle, Bitcoin is zero-sum; for every winner, there's a loser. If the Bitcoin world had a huge business transaction volume and minor speculation, it might have worked. The other way round, it's a pyramid scheme.
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September 03, 2011, 06:09:59 PM
 #56

When I got into bitcoin prices were where they are now, and difficulty level was 1,500,000 less than it is now.  So at that time, mining made sense.

Right now, mining and investing in mining hardware really doesnt make much sense.  Buying bitcoins right now is a much better investment, IMO. 

Mining took off because people were getting something for nothing, and the whole idea of "if the market crashes, I still have the hardware" prevailed.

I know, because that was my view too.

People aren't buying more Bitcoins because Bitcoins are a fucking stupid investment vehicle.

Another way to look at it: people aren't speculating with bitcoins because the short term trend is still down, and has not been broken.   There's no rush like there was when BTC was going up tens of % a day.   The longer I wait the more bitcoins I can get per $.

Mining is still highly profitable but the writing is on the wall.  $100/month for my two remaining 5830s will likely shrink to $50/month and then $0 a month after power costs over the next 8 weeks.   It's true that difficulty follows price, but IMO price also relates to difficulty.   When the price in power to generate a bitcoin (determined by difficulty) was about a dollar and market price was $32 predictable things eventually happened to both price and difficulty.   If BTC pricing falls into the $3 range (current cost to produce a BTC for much of the US) we may see a similar cycle start to the downside.  See my FPGA theory with 1/10th of current GPU production costs (or 90% gross margin) for what I think might further drive that cycle.

I'm kind of hoping a few more bitcoin bulls show up to buy my last two 5830s before then.  It'd make my bitcoin investment story that much more awesome (325% return and two free games sounds much better than 210% return, 2 crappy video cards and 2 free game codes).

And that money is NOT going back to buy bitcoins directly.  If anything it'd go to Xilinx.

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September 03, 2011, 07:05:43 PM
 #57

Quote
People aren't buying more Bitcoins because Bitcoins are a fucking stupid investment vehicle.
Also right.  Originally, Bitcoin was supposed to be a medium of exchange, a form of money that was easy to e-mail. That didn't happen much. As an investment vehicle, Bitcoin is zero-sum; for every winner, there's a loser. If the Bitcoin world had a huge business transaction volume and minor speculation, it might have worked. The other way round, it's a pyramid scheme.
Serious question: What distinguishes Gold from Bitcoin here? I’d like to know if you consider that a pyramid scheme, too.

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September 03, 2011, 07:11:28 PM
 #58

Quote
People aren't buying more Bitcoins because Bitcoins are a fucking stupid investment vehicle.
Also right.  Originally, Bitcoin was supposed to be a medium of exchange, a form of money that was easy to e-mail. That didn't happen much. As an investment vehicle, Bitcoin is zero-sum; for every winner, there's a loser. If the Bitcoin world had a huge business transaction volume and minor speculation, it might have worked. The other way round, it's a pyramid scheme.
Serious question: What distinguishes Gold from Bitcoin here? I’d like to know if you consider that a pyramid scheme, too.

Oh Christ...the Gold vs. Bitcoin argument.

Not even going to bother...sorry.
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September 03, 2011, 07:16:21 PM
 #59

Oh Christ...the Gold vs. Bitcoin argument.

Not even going to bother...sorry.
No, I’m serious. I know of some crucial differences which in my opinion makes Gold much less of a pyramid scheme (timespan of thousands of years vs. Bitcoin in the media maybe one year; industrial uses of Gold; elasticity of Gold supply (unlike Bitcoin where the first miners without any competition could snatch >25% of the supply ever) which is actually mildly inflationary, but I’d like to know if I’m missing any argument here.

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September 03, 2011, 07:25:55 PM
 #60

Gold has practical value:
* electronics
* decoration on pimp outfits

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