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Author Topic: At what pricepoint is bitcoin dead?  (Read 25799 times)
bitcoinminer
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October 21, 2011, 09:08:54 PM
 #141

It will only die when there is little to no incentive to mine. Just imagine the price when there is only hobbyists mining Bitcoins. That's what the bottom will be.

So around $2.57? LOL

Be fearful when others are greedy, and greedy when others are fearful.

-Warren Buffett
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bitcoinminer
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October 21, 2011, 09:10:40 PM
 #142

Mining $2 per BTC @ 1.7M difficulty is like scouring the roadside for aluminum cans to return, except imagine every day the cans are worth a little less.


Difficulty hasn't been 1.7M for some time now. 
Also when difficulty was 1.7M price wasn't $2 so I am not sure what you are trying to say.
Then again I don't think you are sure what you are trying to say.

Also none of this has anything to do with your claim that mining @ $2 is impossible.  If difficulty fell back to 200K would it still be impossible?  If BTC was $20 USD but difficulty was 40 million how profitable would you be.

Simply claiming $20 BTC is better than $2 BTC is meaningless.  Higher BTC is better for speculators.  It has nothing to do w/ economics of mining.

I never said impossible, I said that mining 0.5 BTC/day at $2/BTC is not worth my time.  Vastly different Smiley

And I also said whether its $20/BTC or $2/BTC doesnt matter as long as the price is STABLE.  Stable is bad for speculators.

Inflation is VERY BAD for BTC.

Be fearful when others are greedy, and greedy when others are fearful.

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October 21, 2011, 09:11:18 PM
 #143

at what point should we consider it "dead"?

Bitcoin is dead when the flow of new fiat to the exchanges stops. That is easy for the exchanges to measure but hard for most people. It doesn't seem to be a published quantity.

Sure you can claim that it's not dead even then. Surely, people could be trading goods for bitcoins among themselves in the absence of fiat/exchanges. Dismantling of exchanges does not directly cause (or logically imply) a lack of desire to trade.

However, since the OP specified BTC Price, it is foolhardy to dismiss the correlation. Fiat exchanges were created in anticipation of supporting those who wanted to trade without mining bitcoin. Without desire from those folks, BTC price has no meaning. Exchanges become merely pari-mutuel wagering facilities taking a rake until there are no more rakes left to take.
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October 21, 2011, 09:26:19 PM
 #144

Inflation is VERY BAD for BTC.

What makes you think BTC has an inflation problem?

Please don't tell me you think the decline from $30 to $2 USD was because of inflationary pressures?
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October 21, 2011, 09:28:05 PM
 #145

It will only die when there is little to no incentive to mine. Just imagine the price when there is only hobbyists mining Bitcoins. That's what the bottom will be.

So around $2.57? LOL

You're a smart man.
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October 21, 2011, 09:59:44 PM
 #146

at what point should we consider it "dead"?

Bitcoin is dead when the flow of new fiat to the exchanges stops. That is easy for the exchanges to measure but hard for most people. It doesn't seem to be a published quantity.

Sure you can claim that it's not dead even then. Surely, people could be trading goods for bitcoins among themselves in the absence of fiat/exchanges. Dismantling of exchanges does not directly cause (or logically imply) a lack of desire to trade.

However, since the OP specified BTC Price, it is foolhardy to dismiss the correlation. Fiat exchanges were created in anticipation of supporting those who wanted to trade without mining bitcoin. Without desire from those folks, BTC price has no meaning. Exchanges become merely pari-mutuel wagering facilities taking a rake until there are no more rakes left to take.


By then, decentralized exchanges will exist and bitcoin pricing will not be easily manipulated by HST. Prices will rise as demand increases, not just speculation. Then there will be no stopping bitcoin.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
bitcoinminer
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October 21, 2011, 10:36:43 PM
 #147

Inflation is VERY BAD for BTC.

What makes you think BTC has an inflation problem?

Please don't tell me you think the decline from $30 to $2 USD was because of inflationary pressures?

In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.[1] When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy.[2][3] A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.[4]

http://en.wikipedia.org/wiki/Inflation

Only in the sense that each unit of currency buys fewer goods and services, and has an erosion in it's purchasing power.

So, not in the sense that BTC people like to here, only in the "scientific definition" sense.

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October 22, 2011, 02:05:17 AM
 #148

Inflation is VERY BAD for BTC.

What makes you think BTC has an inflation problem?

Please don't tell me you think the decline from $30 to $2 USD was because of inflationary pressures?

In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.[1] When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy.[2][3] A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.[4]

http://en.wikipedia.org/wiki/Inflation

Only in the sense that each unit of currency buys fewer goods and services, and has an erosion in it's purchasing power.

So, not in the sense that BTC people like to here, only in the "scientific definition" sense.

You left this out "Economists generally agree that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply."
Bitcoin will never suffer excessive growth in the money supply. Hence, no inflation.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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October 22, 2011, 03:55:32 AM
 #149

Yeah I dont understand how you miss the point of we need bitcoin to be stable and around 10 bux a bitcoin for it to work.  Its not for speculators, its for mining.  It costs more in electricity, a computer rig with at least one good graphics card to mine one bitcoin then what one bitcoin is worth, that is a major problem.  Also the price isnt stable, so no businesses will want to risk accepting bitcoins when they could sell a shirt that cost them 10 dollars to make for 5 bitcoins at 2 dollars per bitcoin but then next week there same bitcoins they took for that shirt are only worth a dollar a bitcoin, they just lost 50 percent on there shirt sale.  Nothing will ever come of this great bitcoin, cryptography system if these two things do not change.  There needs to be a stable wall, between 10 to 15 dollars per bitcoin to let businesses work within the confines of the bitcoin structure and not take losses.  It also needs to be around 10 bux for miners to create bitcoins and keep creating them or else it will take 3 years at 2 dollars a bitcoin just to pay off there mining computer, would make no sense.  So until these things happen it will remain a toy for nerds that enjoy the concept of bitcoins, which I do love the concept and love bitcoins, they just wont work in real life.  I am using 10 to 15 dollars knowing how much it cost to make a bitcoin at this point in time with what graphics card and build you would have to buy and how much it equates too.  Now later on, or if you were an early adopter, that price point might be 3 to 6 dollars a bitcoin, but either way there needs to be a stable wall that makes sense for speculators, miners, and businesses. This is what were missing and doesnt exist right now that is causing bitcoin to just be a fad.

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October 22, 2011, 04:58:38 AM
 #150

It would be safe to say Bitcoin is officially dead when you can't get a pizza (or two) for 10.000 BTC...

It was already like that for months (a year?) once. Maybe it was dead and rose from the grave? If it can do that then death is not so scary, eh?

Or that Bitcoin is as good as Jesus. And yes, I do recognize that there is a lot of deep irony in that statement.

Every time you mention Jesus, some little girl gets sent to reform camp till she turns 18 because she was trying to save your furry ass.  Wink

Bitcoin: Live Long and Prosper
mizike29
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October 22, 2011, 05:49:09 AM
 #151

I mined plenty too, what does that have to do with anything. The difficulty changing doesnt change enough by dropping to make it so much easier to create a bitcoin and cheaper to create a bitcoin then 2 dollars that 1 bitcoin is worth at this point does it?  No one will mine if it doesnt make financial sense and you lose money, no business will accept it if there bitcoins are worth half as much tomorrow as they were today, keeping it as a fad that will pass on, or if u dont want to say fad and make it sound cooler its an experimental micro economy that its advocates would like to see increase in size.  That just keeps it a nerdy, cool, fun little thing to play with.  The point of bitcoin would be to have it function better then a dollar does.  A dollar is stable, still a dollar today, still a dollar tomorrow, prices of products change, but not the dollar.  Bitcoins change in value and the products change in price, you cant have both, and the cost of making bitcoins is very high right now.  U need stability, u need a good price point or were just buying useless small items on forums, trading them for some reason, when really you could buy it for a dollar. Unless you need to buy drugs with it.

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October 22, 2011, 12:14:06 PM
 #152

A dollar is stable, still a dollar today, still a dollar tomorrow, prices of products change, but not the dollar.

Hahahahahaha

This discussion is getting really fun ! Wait, let me grab some beer.

cbeast
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October 22, 2011, 12:27:22 PM
 #153

A dollar is stable, still a dollar today, still a dollar tomorrow, prices of products change, but not the dollar.


Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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October 23, 2011, 12:16:56 AM
 #154

Yeah I dont understand how you miss the point of we need bitcoin to be stable and around 10 bux a bitcoin for it to work.  Its not for speculators, its for mining.  It costs more in electricity, a computer rig with at least one good graphics card to mine one bitcoin then what one bitcoin is worth, that is a major problem.  Also the price isnt stable, so no businesses will want to risk accepting bitcoins when they could sell a shirt that cost them 10 dollars to make for 5 bitcoins at 2 dollars per bitcoin but then next week there same bitcoins they took for that shirt are only worth a dollar a bitcoin, they just lost 50 percent on there shirt sale.  Nothing will ever come of this great bitcoin, cryptography system if these two things do not change.  There needs to be a stable wall, between 10 to 15 dollars per bitcoin to let businesses work within the confines of the bitcoin structure and not take losses.  It also needs to be around 10 bux for miners to create bitcoins and keep creating them or else it will take 3 years at 2 dollars a bitcoin just to pay off there mining computer, would make no sense.  So until these things happen it will remain a toy for nerds that enjoy the concept of bitcoins, which I do love the concept and love bitcoins, they just wont work in real life.  I am using 10 to 15 dollars knowing how much it cost to make a bitcoin at this point in time with what graphics card and build you would have to buy and how much it equates too.  Now later on, or if you were an early adopter, that price point might be 3 to 6 dollars a bitcoin, but either way there needs to be a stable wall that makes sense for speculators, miners, and businesses. This is what were missing and doesnt exist right now that is causing bitcoin to just be a fad.

Your half right.  Bitcoin needs to be stable but it sure as hell doesn't need to be $10 to $15 for miners to break even.

Maybe YOU can't produce bitcoins unless price is $10 to $15 but that is irrelevant.

" It costs more in electricity, a computer rig with at least one good graphics card to mine one bitcoin then what one bitcoin is worth, that is a major problem."

My electrical costs @ current difficulty are $1.59 per BTC.  Difficulty will adjust to any pricepoint. BTC could be $20,000 and you still might not be profitable miner.   The more stable prices are the less likely you will be able to mine profitably unless you have an effficient rig AND low/no energy prices. 

Why?  The more stable the price the less risk a miner is taking and bitcoin minting is a commodity industry.  Economic theory tells us with no barriers to entry and commodity product prices will fall to barely above the cost of the most efficient producers.  A miner with good efficient rig and below average energy prices (compared to bitcoin community) will eke out a small profit (maybe less than 5% of energy cost & ammortized hardware).  Those with hgiher energy prices or less efficient rigs will simply be unable to compete.
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October 23, 2011, 05:09:06 AM
 #155

BTC could be $20,000 and you still might not be profitable miner.

I dunno, could you explain the situation to me? Astronauts mining bitcoins?  Grin

Think very high difficulty. Think Google and Walmart setting up datacenters for bitcoin mining with onsite power generation. Think oilsand plants in northern Alberta using their cogeneration plants for bitcoin mining (using ASICs of course (more efficient than FPGAs)). Think thousands of transactions an hour, pushing home Internet connections off the network (must pay $300/month or more for business Internet).

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October 23, 2011, 05:55:24 AM
 #156

Not that I completely understand the difficulty calculation, but those companies would have the resources to push the difficulty up a million-fold. That makes your miner a million times less profitable, while still costing the same amount of money to run.


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October 23, 2011, 06:03:58 AM
 #157

Not that I completely understand the difficulty calculation, but those companies would have the resources to push the difficulty up a million-fold. That makes your miner a million times less profitable, while still costing the same amount of money to run.



but the only reason they would do that would be if bitcoins were worth a lot more than they are now.

bringing your profitability back up again.
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October 23, 2011, 06:28:53 AM
 #158

I dont know what rig you would have, but you need at least 700 bux for a computer and card that will mine bitcoins well.  At 2 dollars a bitcoin, minus your electricity, it will take you a long long long time to just break even and pay for the rig.  That is why I see it at 10 to 15 bux a bitcoin being a good price, and a wall between 10 to 15 for stability for businesses to take the risk in selling items we need for bitcoins.  As it is now, I agree the stability is the biggest issue.  I do not think 10 dollars a bitcoin is too high for a normal rig to create bitcoins and make sense.  Takes about 3 days to make one bitcoin, thats about 20 bux a month generating bitcoins with a 700 dollar rig, minus the cost of electricity, so do the math holy hell over 3 years to pay for your mining rig easliy.  That just doesnt make sense.  This is where I see it needing to be around 10 bux to 15 a coin and a stable wall built as a guarantee for businesses to take the risk of selling items for bitcoins.  No real business is going to sell anything that matters for over 10 bux, that might be bought for 5 bitcoins, when 2 weeks later those 5 bitcoins would be worth 5 bux, too risky especially when you start selling items like ipods, ipads, computers, graphics cards etc, things that cost 100s of dollars, way too high of a risk unless you convert your bitcoins into cash immediately, which if your doing that then whast the point, just sell them for cash to start with

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October 23, 2011, 06:51:19 AM
 #159

convert your bitcoins into cash immediately, which if your doing that then whast the point, just sell them for cash to start with

the point is not everyone has a credit card, or even if they do have one, not everyone wants it connected to their purchases.

there have been so many times lately where i've been to a site and really wished they accepted bitcoins, because for me, they're 100x more convenient.

example: http://rapidxhtml.com looks like a great service, but completely useless to me because they only accept paypal.
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October 23, 2011, 06:55:33 AM
 #160

I dont know what rig you would have, but you need at least 700 bux for a computer and card that will mine bitcoins well.  At 2 dollars a bitcoin, minus your electricity, it will take you a long long long time to just break even and pay for the rig.  That is why I see it at 10 to 15 bux a bitcoin being a good price, and a wall between 10 to 15 for stability for businesses to take the risk in selling items we need for bitcoins.  As it is now, I agree the stability is the biggest issue.  I do not think 10 dollars a bitcoin is too high for a normal rig to create bitcoins and make sense.  Takes about 3 days to make one bitcoin, thats about 20 bux a month generating bitcoins with a 700 dollar rig, minus the cost of electricity, so do the math holy hell over 3 years to pay for your mining rig easliy.  That just doesnt make sense.  This is where I see it needing to be around 10 bux to 15 a coin and a stable wall built as a guarantee for businesses to take the risk of selling items for bitcoins.  No real business is going to sell anything that matters for over 10 bux, that might be bought for 5 bitcoins, when 2 weeks later those 5 bitcoins would be worth 5 bux, too risky especially when you start selling items like ipods, ipads, computers, graphics cards etc, things that cost 100s of dollars, way too high of a risk unless you convert your bitcoins into cash immediately, which if your doing that then whast the point, just sell them for cash to start with

I am sure a year ago, when btc were less then 1 dollar, it was profitable to mine.  at 2 more and more will drop of the network, diff will go down, and it will become profitable again.  satoshi was a smart man.

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