Where is the floor?

[Elwar]

Bitcoin has gotten back on track of dropping about a dollar a week which was shortly interrupted by the hype of the convention which turned out to be nothing.

The price will probably keep going down until there is enough interest to counter the 50% inflation.

I believe that when the mining reward goes to 25 in 2012 and inflation is cut in half then we will be able to maintain and slowly rise in price from there on with fluctuations.

But until then, it will continue to fall.

So where is the floor?

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[Hotdog453]

I'll vote 4$, but I can see it going lower. To me, 4$ is where miners will lose a lot of interest. The network hash rate will fall violently, but it won't really impact much once the difficulty changes.

The question is when will people stop caring about it from a production standpoint, and 4$ seems logical to me. At much below 4$, the amount of miners could probably fit in one room, running 2 5850s and a Celeron

[Superform]

bitcoin is finished as a spec.. we are in the long slow decline to nothingness

it might work in the longer term.. but its going to be years before we see it rise again

[ercolinux]

I'll vote 4$, but I can see it going lower. To me, 4$ is where miners will lose a lot of interest. The network hash rate will fall violently, but it won't really impact much once the difficulty changes.

The question is when will people stop caring about it from a production standpoint, and 4$ seems logical to me. At much below 4$, the amount of miners could probably fit in one room, running 2 5850s and a Celeron

In some Europe country with the cost of energy in the 0,3-0,6$/KWh range the interest will drop well before 7$ (in Italy for example is totally wortless to mine even now unless you've a 2-3GHash rig with high efficiency powersupply - and even that way you can pay the energy with basically no earning) . At 4$ is totally antieconomical to mine for everyone unless difficulty drops below 1,200,000 (and even that way you can earn where energy cost 0,2$/KWh only some cent/mont): if we reach that point there will be only few miners that can sustain the costs and probably we can see a drop below 1,000,000 of the difficulty. But as long as the reward halves in 2012 mining becomes totally unsustenible for almost every one so is true that probably we have only some tens of miners that keep all the network on.

[mute20]

I do not expect the floor to come soon. People speak of the floor as if it is coming the next week/month. The interest is simply to high. Many have put $100s-10ks into bitcoin. The market will only get stronger as time goes by. Sure their are dips in prices a lot of the time ,but this happens with every currency. Even though the us dollar is less valuable than the cad dollar; it is still more valuable. Where you can use it is more valuable than the actual value is one reason. This is also why alternative currency(ixcoin,solidcoin,etc) can never take the place. They are more like schemes  to get more btc from early adopter interest.

[Jixtreme]

I almost think dedicated miners are "ruining" Bitcoin. Way back when -- you know, when "mining" was a function built-in to the Client -- anyone could mine with their CPUs and stand a chance at receiving the prize. BTC won't be an "everyman's" currency until every person holds a reasonably equal shot at cracking the block. With difficulty where it is (high), and the price of BTC where it is (low), only geeky-freaks can mine profitably.

If every commoner passively mined (automatically, any time the Bitcoin Client is running) at a maximum throttle per running client, everyone would have the same incentive to keep the client running: an equal shot at a chunk of BTC. This will maintain the security of the overall network since everyone will have a reasonable incentive to mine, and at such a low cost (pennies v. dollars), you'd be silly not to.

Not sure if these limitations are technically possible or not... I can't say I fully understand the technology at work. -_-

-Jix

[johnj]

I almost think dedicated miners are "ruining" Bitcoin. Way back when -- you know, when "mining" was a function built-in to the Client -- anyone could mine with their CPUs and stand a chance at receiving the prize. BTC won't be an "everyman's" currency until every person holds a reasonably equal shot at cracking the block. With difficulty where it is (high), and the price of BTC where it is (low), only geeky-freaks can mine profitably.

If every commoner passively mined (automatically, any time the Bitcoin Client is running) at a maximum throttle per running client, everyone would have the same incentive to keep the client running: an equal shot at a chunk of BTC. This will maintain the security of the overall network since everyone will have a reasonable incentive to mine, and at such a low cost (pennies v. dollars), you'd be silly not to.

Not sure if these limitations are technically possible or not... I can't say I fully understand the technology at work. -_-

-Jix

I wouldn't say it was ever an 'everyman's' currency.  Even 'back in the day', you still had to have a computer, an internet connection, and pay for power (which at the time, was a negative profit).   From what I understand, 'mining' is only supporting detail of Bitcoin as a whole, as the primary way you should 'get' Bitcoins is through accepting them as payment for goods/services.

[Hotdog453]

Production side will never be an "everyman" kind of thing. The only thing separating someone with one video card and someone with 50 video cards is money; the level of "nerdiness" is bound to be pretty damn close.

[Jixtreme]

Under the current system, of course production will never be an everyman's activity. What I'm saying is that this is lopsided, and the fluctuating mining difficulty and exchange rate will remain volatile until mining stabalizes. That's a denominator issue. The bigger the denominator, the smaller the swings in difficulty, the smaller the swings in exchange rate. (Of course there are other factors that drive price, which may in turn drive mining, but since mining is such a large part of the economy at this point, changes in difficulty can affect the price in large ways.

If we maximize the denominator (making mining passive and automatic) whilst constraining the numerator (throttleing client mining) we can eliminate mining difficulty as a driver of price, and leave it to purely economic and environmental factors.

-Jix

[Oldminer]

Down she goes

where it ends - nobody knows