Mahkul (OP)
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March 19, 2011, 04:20:29 PM |
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I think one of the reasons the Bitcoin value is dropping is that there are more and more bitcoins everyday, yet the amount of people interested in Bitcoins is not growing fast enough. Therefore there is already enough bitcoins for the people involved, so the newly generated coins have to be pushed for "normal money" (of course not everyone is selling their generated BTC, but I would imagine a lot of new miners do) at a lower price. This is probably caused by promoting mining instead of promoting bitcoins as the actual currency.
Would you not agree?
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BrightAnarchist
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March 19, 2011, 04:23:33 PM |
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The reason they're falling is simple. The broader economy is slipping back into deflation. This makes inflation hedges like Bitcoin less attractive.
Bitcoin always tops with the stock market, or at least it has so far, and acts much like a penny stock. The last peak in BTC occurred prior to the flash crash, and so it's absolutely no surprise to see it falling right now as stocks fall and t-bonds rise.
I'm planing to buy a lot of BTC eventually but I've been waiting for the next major deflationary phase to run its course first.
Naturally, this is all my personal option/conjecture.
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Nefario
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March 19, 2011, 04:25:32 PM |
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Its from an increase in supply of bitcoins with a paralell decrease in demand ![Tongue](https://bitcointalk.org/Smileys/default/tongue.gif) But seriously its a lack of goods or services.
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kiba
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March 19, 2011, 04:32:04 PM |
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My business operation is posed for increased demand for bitcoin services as soon as I figure out how to streamline the process of making money.
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Mahkul (OP)
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March 19, 2011, 04:43:36 PM |
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Its from an increase in supply of bitcoins with a paralell decrease in demand ![Tongue](https://bitcointalk.org/Smileys/default/tongue.gif) But seriously its a lack of goods or services. I should have done this a long time ago: http://bitcointalk.org/index.php?topic=4667.0
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bitcool
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March 19, 2011, 05:37:52 PM |
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I have been a bitcoin enthusiast, but I feel I need to play devil's advocate to balance some complacency and blind optimism I've expressed before. I don't think bitcoin can succeed without significant improvement on user friendliness, per criteria proposed in this book: http://www.amazon.com/Change-Function-Technologies-Others-Crash/dp/B000NA6U2OFor some, the current UI seems to be simple enough, but if you are serious about using it, you'll have to deal with the wallet file, a task I found to be nuisance even for computer geeks. As a method of online/electronic payment, I always compare bitcoin's with Paypal, and as far as I can see, the pain of using Paypal does not exceed the pain of switching to bitcoin. * Many online merchants accepts Paypal, very few accept bitcoin * Being a non-reversible payment is a two-way street, it's an advantage for some but disadvantage for others. * To recharge/withdraw money, linking paypal to a bank account is actually easier than jumping hoops with MtGox, Liberty Reserver and other equally hard-to-use intermediaries. (Coinpal/Coincard did a great job in this regard). * To send/receive money from friends, without a mobile client, bitcoin is no easier than Paypal at current form. The biggest advantage of bitcoin is its underlying de-centralized monetary concept, but without a real episode of hyper inflation, most ordinary people do not care this difference. In short, I really hope bitcoin will not become another great but failed academic experiment.
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MDKing
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March 19, 2011, 06:11:01 PM |
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* To recharge/withdraw money, linking paypal to a bank account is actually easier than jumping hoops with MtGox, Liberty Reserver and other equally hard-to-use intermediaries. (Coinpal/Coincard did a great job in this regard).
Couldn't agree with you more, getting funds in and out of the bitcoin economy is a pretty daunting task and I think this really holds it back from taking off.
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N12
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March 19, 2011, 06:23:43 PM |
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I absolutely agree with the OP and also with bitcool. It’s a bit of a hen-egg-problem though, because if you market Bitcoin to a broader audience at this stage, they could be scared off as it’s not easy to handle and there are few shops accepting it. On the other hand, features/applications needed to reach this audience don’t have enough demand at this moment.
If we don’t manage to continue this influx of new users we had, a continuing price reduction would be unavoidable as we are in a highly inflationary phase. A further devaluation and volatility could lead to less trust in Bitcoin, causing it to devaluate at an even faster rate.
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BitterTea
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March 19, 2011, 06:39:01 PM |
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* To recharge/withdraw money, linking paypal to a bank account is actually easier than jumping hoops with MtGox, Liberty Reserver and other equally hard-to-use intermediaries. (Coinpal/Coincard did a great job in this regard).
Couldn't agree with you more, getting funds in and out of the bitcoin economy is a pretty daunting task and I think this really holds it back from taking off. I believe one of the coming features on MtGox is automated ACH transfers, but don't quote me on that. edit... Quote Jed instead: Everything will still work the same as always for the time being. But expect a lot of positive changes after he takes over including: Automatic (and free) funding from Euro accounts. Automatic ACH deposit and withdrawal. Margin trading. Interface redesign. Lifting the $1000 a day withdrawal limit.
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Jered Kenna (TradeHill)
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March 19, 2011, 07:11:23 PM |
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I agree it needs to be a lot easier to move money in and out and spend it. For me it's not hard to grasp but it's still a lot to learn. The average user is going to want to have something as easy to use as paypal. I think you'll see more businesses adopting it at that point too. As far as my business goes if I sell something I need to convert it back to fiat so I can buy more supplies / eat. I'm happy to take btc but I've gotta dump it until it gets to the point where I can use it for something I need which shouldn't be too far.
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Gavin Andresen
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March 19, 2011, 07:18:30 PM |
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The average user is going to want to have something as easy to use as paypal.
The average user will want to use a brand name they're familiar with; if we can continue to convince early adopters that bitcoin is a good idea, eventually PayPal or one of its competitors will start supporting it. I hope.
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How often do you get the chance to work on a potentially world-changing project?
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Jered Kenna (TradeHill)
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March 19, 2011, 07:34:41 PM |
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The average user is going to want to have something as easy to use as paypal.
The average user will want to use a brand name they're familiar with; if we can continue to convince early adopters that bitcoin is a good idea, eventually PayPal or one of its competitors will start supporting it. I hope. I agree, I think it will somewhat take care of it's self. If someone can benefit from making it easier / simpler / shiny or whatever they'll do it and it will spread. I hate the idea of something like paypal being how people know bitcoin but as long as you can still do your own transfers outside of it then I guess it doesn't matter.
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Thndr
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March 19, 2011, 07:49:36 PM |
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Paypal would be the easiest as it already has enough links to solid currencies and could hold a virtual wallet safely.
Even if they don't do it, all we really need is a user accessible and friendly site that could partner with a company like VISA or MasterCard for some solid currency backing. Paypal had to start somewhere. I currently would assume after a while, MtGox would serve that purpose if nothing else came along, as it is the most popular exchange market got Bitcoin, and using existing accounts it could easily evolve into a major player between Bitcoin and USD(or other currencies).
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Zerbie
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March 19, 2011, 10:45:22 PM |
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I took the time to figure out the inflation rates about a week ago. Year over year inflation will probably not beat the FDR inflation rate until around 2017 (assuming average inflation of about 5%).
2009 N/A 2010 100.00% 2011 50.00% 2012 33.33% 2013 12.50% 2014 11.11% 2015 10.00% 2016 9.09% 2017 4.17% 2018 4.00% 2019 3.85% 2020 3.70% 2021 1.79% 2022 1.75% 2023 1.72% 2024 1.69% 2025 0.83% 2026 0.83% 2027 0.82% 2028 0.81% 2029 0.40% 2030 0.40% 2031 0.40% 2032 0.40% 2033 0.20% 2034 0.20% 2035 0.20% 2036 0.20% 2037 0.10% 2038 0.10% 2039 0.10% 2040 0.10% 2041 0.05%
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N12
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March 19, 2011, 10:59:30 PM |
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Looks like you forgot to consider that every four years (approximately), the inflation rate is reduced by 50%, so inflation in 2013 would be around 8.5% etc. – check this graph.
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gusti
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March 19, 2011, 11:15:57 PM |
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The average user is going to want to have something as easy to use as paypal.
The average user will want to use a brand name they're familiar with; if we can continue to convince early adopters that bitcoin is a good idea, eventually PayPal or one of its competitors will start supporting it. I hope. Sorry to break your hope, but I would not count on it. Paypal sucks, and sucks big. Credit cards too. They are both monopolistic, and they will not share a piece of the pie. Bitcoin must break that evil circle to be successful. Diferentiating, not associating. We need an exchanger in every single city of the world.
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If you don't own the private keys, you don't own the coins.
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slush
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March 19, 2011, 11:50:19 PM |
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Diferentiating, not associating. We need an exchanger in every single city of the world.
+1 for cigar shops on the street corners exchanging Bitcoins.
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Anonymous
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March 20, 2011, 02:23:05 AM Last edit: March 20, 2011, 02:37:08 AM by noagendamarket |
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You cant walk into a shop and spend paypal nor would it be wise to spend paypal at silk road ![Wink](https://bitcointalk.org/Smileys/default/wink.gif) What is actually needed are market makers such as big miners who can supply btc to agents in different countries so they dont have to buy them through a middle man which increases cost for end users. If I had large miner supplying me with bitcoins at market rates I could setup a thriving market in Australia quite easily using bank deposits then settle in large amounts which reduces costs dramatically . I cant do so while I need to convert currency to USD ,buy liberty reserve or send bank checks. Maybe this is the real way forward.
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Zerbie
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March 20, 2011, 02:36:42 AM |
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Looks like you forgot to consider that every four years (approximately), the inflation rate is reduced by 50%, so inflation in 2013 would be around 8.5% etc. – check this graph. The number of bitcoins introduced per block decreases by 50% every 4 years, but that does not take into account the coins already in circulation. Here is the spreadsheet if you want to check my work. http://dl.dropbox.com/u/903803/Book1.xlsx
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ShadowOfHarbringer
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March 20, 2011, 10:24:33 PM |
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The average user is going to want to have something as easy to use as paypal.
The average user will want to use a brand name they're familiar with; if we can continue to convince early adopters that bitcoin is a good idea, eventually PayPal or one of its competitors will start supporting it. I hope. Well, it's good to have hope but i seriously doubt that the "old" financial institutions such as classical Banks and institutions connected to them such as Paypal. As soon as they will realize that Bitcoin is a serious threat to all fiat currencies, they will start fighting. Not soon, i hope.
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