Why BTC is losing value.

[sadpandatech]

We need to get more coins out to more people

Why do we need to do that? To ensure the position of the bitcoin wealthy?

I’d say we need to polish the Bitcoin client, infrastructure, everything, before we try to attract new people.

/thread

The current declining state of new speculator blood provides an excellent opportunity to get our heads screwed back on straight.

1. Would be very nice to see the client or a good client overlay with the ability to generate a single use wallet with a new address to send a predetermined amount of coins to that let us pick the location the generated wallet was placed. i.e. flash drive, etc.

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[N12]

One thing I wanted to add: All this stuff about generating media interest, getting more people to join and invest etc. makes Bitcoin sound like a pyramid scheme to me.

If Bitcoin is found convenient and useful, people will come on their own. Currently it’s not very convenient or useful for most.

[ElectricMucus]

One thing I wanted to add: All this stuff about generating media interest, getting more people to join and invest etc. makes Bitcoin sound like a pyramid scheme to me.

If Bitcoin is found convenient and useful, people will come on their own. Currently it’s not very convenient or useful for most.

+1

[evoorhees]

There are almost too many fallacies in this thread to even begin, but let's try...

1) OP - your thesis is self-contradictory. You are claiming that bitcoin is deflationary, thus its price rises relative to goods, thus nobody spends it, thus the price is falling. Well, I must ask, if the price is falling relative to goods then it's suddenly an "inflationary" currency so people should spend it. This whole deflation argument is a fallacy - work your way through the whole process and you will discover that it fixes itself. It's the same reason you buy a new computer even though the same computer will be half the price in 8 months.

2) Bitcoin is not deflationary. It is perpetually inflationary at a decreasing rate. The fact that demand may increase so quickly as to drive up the market price is a question of demand and supply, not quantity of money. The quantity is always increasing at a decreasing rate, thus it is always inflationary until that last coin in mined, at which point it will be neither inflationary nor deflationary, but static.

3) Contrary to popular belief, spending Bitcoins does not make them more valuable or bolster their market price. In fact, the opposite is true, when you sell a Bitcoin in exchange for a good, you are expressing a preference of the latter over the former and increasing the supply of Bitcoin while decreasing the supply of goods. In other words, every time you sell a Bitcoin, whether for USD or a good or service, you are increasing the market supply of the coin and thus it's relative price will be slightly less. Consider the counter-factual: if nobody ever sold a Bitcoin for anything, it's price would rise to infinity. If your goal is to increase the BTC price, don't ever offer them in a transaction for anything.  

4) The supply and demand for coins on the market dictates their price, nothing else. The "mining difficulty" doesn't matter. It's super hard for me to mine mud from the bottom of the ocean, but I reckon the market price of such mud would be less than impressive. The value of Bitcoins is not "backed" in any way by the difficult of creating them.

5) The price of Bitcoin is greatly affected by the fact that 7200 new coins are mined each day. However, this number was the same back when we were at $30 per coin. The much larger driver of price is market psychology. When people are feeling good about Bitcoin, they buy it and when they feel concerned they sell it. Miners producing those coins will stop putting them on the market the moment they think the price is likely to go higher.

6) A good speculator knows that the mood of the market is often wrong. It is precisely when price is low, yet value is high that you should buy something.

And while the price has been falling these past months, the value of Bitcoin is much greater than it was a few months ago. It is maturing rapidly with new usefulness. Merchant solutions are finally now available. Casinos like Strike Sapphire have launched. Prediction markets like Bets of Bitcoin have launched. Massive retail offerings like BitcoinDeals are in testing. And there is much more going on than the people on the forums realize. Plus, we've now seen just how resilient Bitcoin is, surviving numerous scandals over the past few months. Even the perceived threat of new forked chains is proving totally unfounded. The Bitcoin ecosystem is being constantly bombarded with problems and inoculated against them. And STILL no significant bug or vulnerability of the Bitcoin protocol has been found.

[ElectricMucus]

3) Contrary to popular belief, spending Bitcoins does not make them more valuable or bolster their market price. In fact, the opposite is true, when you sell a Bitcoin in exchange for a good, you are expressing a preference of the latter over the former and increasing the supply of Bitcoin while decreasing the supply of goods. In other words, every time you sell a Bitcoin, whether for USD or a good or service, you are increasing the market supply of the coin and thus it's relative price will be slightly less. Consider the counter-factual: if nobody ever sold a Bitcoin for anything, it's price would rise to infinity. If your goal is to increase the BTC price, don't ever offer them in a transaction for anything. 

You make a valid point, however imo this is a fallacy.
There is something as a middle ground of how much something to be supposed to serve as money can be hoarded and spend to give it its most value - as a percentage.
In the case of bitcoin a very vast majority is hoarded and even when transactions take place it is just so in order to be hoarded by someone else. Take the example of gold. There is and was always a significant percentage of it used for practical use, and/or barter and trade. Industry, ancient gold plating and so on.

What the actual percentage would have to be depends on the circumstances but from what I've read it should be 50% or at least some double figures. Trying to guess how many bitcoins are actually used as a currency makes me faint, it might be something like 0.0001%.
The effect is very high volatility because the only way to value it are the expectation of future value (which _have_ to be based upon it's later expected value as a currency at some point) and the costs to generate it.
If we had actual business transactions taking place not only would it buffer the decline a growing economy would actually boost it's value.

[ThiagoCMC]

We need to get more coins out to more people

Why do we need to do that? To ensure the position of the bitcoin wealthy?

I’d say we need to polish the Bitcoin client, infrastructure, everything, before we try to attract new people.

Agree!!!

But, more people should have the already mined Bitcoins...

[hawks5999]

Gold is about to explode. There are plenty of investors shorting gold right now.

Most Central Banks are not and China is increasing its gold reserves as a strategic policy to destabilize our dollar.

At least that's what the US State Department believes. (3)

Shorting Gold is financial suicide.

[adamstgBit]

And while the price has been falling these past months, the value of Bitcoin is much greater than it was a few months ago. It is maturing rapidly with new usefulness. Merchant solutions are finally now available. Casinos like Strike Sapphire have launched. Prediction markets like Bets of Bitcoin have launched. Massive retail offerings like BitcoinDeals are in testing. And there is much more going on than the people on the forums realize. Plus, we've now seen just how resilient Bitcoin is, surviving numerous scandals over the past few months. Even the perceived threat of new forked chains is proving totally unfounded. The Bitcoin ecosystem is being constantly bombarded with problems and inoculated against them. And STILL no significant bug or vulnerability of the Bitcoin protocol has been found.

+1

excellent post.

Bitcoin is GROWING. that's the bottom line.

[Jointops420]

I had to save dollars to buy a car, I have brought small items with BTC but am saving a larger portion of my bitcoins because I wish to buy a home with them one day and hopefully a straight btc deal. Whats so wrong with that? I dont spend every dollar instantly because its used to buy things with.

[Synaptic]

And while the price has been falling these past months, the value of Bitcoin is much greater than it was a few months ago. It is maturing rapidly with new usefulness. Merchant solutions are finally now available. Casinos like Strike Sapphire have launched. Prediction markets like Bets of Bitcoin have launched. Massive retail offerings like BitcoinDeals are in testing. And there is much more going on than the people on the forums realize. Plus, we've now seen just how resilient Bitcoin is, surviving numerous scandals over the past few months. Even the perceived threat of new forked chains is proving totally unfounded. The Bitcoin ecosystem is being constantly bombarded with problems and inoculated against them. And STILL no significant bug or vulnerability of the Bitcoin protocol has been found.

+1

excellent post.

Bitcoin is GROWING. that's the bottom line.

Lol...

[Cluster2k]

+1

excellent post.

Bitcoin is GROWING. that's the bottom line.

Lol...

Negative growth is still growth! :-)

[The_Duke]

And while the price has been falling these past months, the value of Bitcoin is much greater than it was a few months ago. It is maturing rapidly with new usefulness. Merchant solutions are finally now available. Casinos like Strike Sapphire have launched. Prediction markets like Bets of Bitcoin have launched. Massive retail offerings like BitcoinDeals are in testing. And there is much more going on than the people on the forums realize. Plus, we've now seen just how resilient Bitcoin is, surviving numerous scandals over the past few months. Even the perceived threat of new forked chains is proving totally unfounded. The Bitcoin ecosystem is being constantly bombarded with problems and inoculated against them. And STILL no significant bug or vulnerability of the Bitcoin protocol has been found.

+1

excellent post.

Bitcoin is GROWING. that's the bottom line.

Aahaha.. yeah, so if you end up being the only one in 2140 who has any bitcoins, that is still fine, because you have now 21 million of them and it has still been GROWING!
Also, because you now hold ALL... the coins, YOU.... can set the price, so.... they are worth... MASSIVE.... ammounts of.... MONEY!

UP UP UP!

[Minsc]

In 2140 one of these will happen:

* Rise of The Apes
* Skynet takes control of the world
* Skynet did rule the world, but The Sage of Six Paths (Naruto) learned how to manipulate bio-energy into superpowers (e.g. Rock Lee of Naruto moves faster than a vampire), taught people it, and they faught off the machines.

[smoothie]

$6.90 and falling...

[MajorMiner]

We need to get more coins out to more people

Why do we need to do that? To ensure the position of the bitcoin wealthy?

I’d say we need to polish the Bitcoin client, infrastructure, everything, before we try to attract new people.

Holly Crap! Whats a real grown-up post like yours doing in a thread like this?!?
 

[Minsc]

We need to get more coins out to more people

Why do we need to do that? To ensure the position of the bitcoin wealthy?

I’d say we need to polish the Bitcoin client, infrastructure, everything, before we try to attract new people.

Holly Crap! Whats a real grown-up post like yours doing in a thread like this?!?
 

No we need to attract money launderers and tax evaders.

[airdata]

No we need to attract money launderers and tax evaders.

Probably lol.

Lots of resident aliens here in the states send money back home.  Often incurring huge fees or w\ large cash amounts risking their cash.

Teach those people bitcoin or do it for them and it'd boom

[Minsc]

How can we do that, airdata?

[TattleCoin]

No we need to attract money launderers and tax evaders.

Probably lol.

Lots of resident aliens here in the states send money back home.  Often incurring huge fees or w\ large cash amounts risking their cash.

Teach those people bitcoin or do it for them and it'd boom

Bitcoin... En Español!

[DiaperedDynamo]

We need to get more coins out to more people

Why do we need to do that? To ensure the position of the bitcoin wealthy?

I’d say we need to polish the Bitcoin client, infrastructure, everything, before we try to attract new people.

Wouldn't help at this point, Bitcoin already has a ton of bad press and experienced a major bubble. You might as well try to convince someone to invest in a nebulous internet startup company.