Throwing in the towel

[muyuu]

I don't think Bruno's expectation is at all unrealistic, in fact I'd say anything less is very pessimistic. Asking for 100 million users in 4 years is insane, even 10 million is pushing it, but 2 million? You have to be kidding me. Let's go through the numbers again shall we.

Bitcoin has around 100 000 users these days. In February 2011 we probably had only 10% of that, maybe 10 000 users. Which means there has been a 900% percentage increase in users in just 1 year. These numbers are thrown out there, they could be off but not way off.

Next we have to take into account the fact that Bitcoin is not going to grow at a yearly 900% forever. Let's say the growth rate halves every year, which is very conservative. So for the next 12 months we can expect a 450% growth rate, next 12 after that will be 225% and so on. What we come up with is this:

February 2011: 10k users (start of calculation)
February 2012: 100k users (900% increase from 2011)
February 2013: 550k users (450% increase from 2012)
February 2014: 1,79m users (225% increase from 2013)
February 2015: 3,8m users (112,5% increase from 2014)
February 2016: 5,94m users (56,25% increase from 2015) <- target date

Conclusion is that even with a fairly conservative growth pattern we can actually surpass 5 million users within 4 years. There is plenty of room for even more conservative calculations that still get us to over 2 million users. It can also be assumed that during this 4 year period the Bitcoin merchant market is on a whole other level, making it actually possible for Bitcoin users to spend a good amount of bitcoins each month.

I wish.

Where did you get these user numbers? No way we have 100k active users by Bruno's measures (exchanging hundreds of dollars worth of bitcoin monthly).

I haven't looked into the blockchain hard enough to make a decent estimate, but I'd expect a decrease of active users during the last months. We have some easy metrics like market volume that do show some growth in average for the last few months, but nowhere close to these numbers.

By Bruno's measures (100s of dollars in monthly bitcoin trade) I'm barely an active user now and I won't expect to be active for the next few months until things settle a bit.

I'd say we should aim for 10 million and be very happy if we reach 5 million by February 2016. We should look in the mirror and not be too happy if we only achieve 2 million. If muyuu's super conservative prediction holds true or if we don't even reach that, then we can be very disappointed.

Disappointed? that was the optimistic prediction. I'd be ecstatic. That would make bitcoin economy the size of a medium-sized modern city.

[1713894677]

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[Raoul Duke]

Don't trap your tail on the door on the way out...

[Technomage]

Where did you get these user numbers? No way we have 100k active users by Bruno's measures (exchanging hundreds of dollars worth of bitcoin monthly).

I haven't looked into the blockchain hard enough to make a decent estimate, but I'd expect a decrease of active users during the last months. We have some easy metrics like market volume that do show some growth in average for the last few months, but nowhere close to these numbers.

By Bruno's measures (100s of dollars in monthly bitcoin trade) I'm barely an active user now and I won't expect to be active for the next few months until things settle a bit.

My numbers are not related to Bruno's measures in any way. It's obvious that currently people don't spend bitcoins that much because the merchant market is still in its infancy, but it can be assumed that in 4 years the situation will be totally different. I for one have spent more bitcoins in recent months compared to the summer, when I did not spend a single bitcoin. It's a slow process but in 4 years I can imagine the situation being very different and I am confident that I'll be able to spend a good amount each month.

In my book we can count anyone as a Bitcoin user who knows about Bitcoin and owns at least some bitcoins. Usage is irrelevant at this stage. These people are all potential users once it becomes more usable. My calculations are based on the overall adoption rate of Bitcoin based on who knows about it and who owns at least some bitcoins. With that in mind I believe my numbers are not wrong.

By the way the Bitcoin network has been used increasingly in 2012. From the standpoint of transaction counts we have recovered to the levels of late August / early September. From a long term perspective (yearly), Bitcoin usage growth looks very healthy at the moment. Also exchange activity and depth has been at very good levels in 2012.

[muyuu]

We have a few milestones ahead. Stability seemed good recently until this week. Then, we still have to have a first bitcoin creation halving and see how the market reacts to that.

After that we'll see.

But maybe I'm a bit biased to considering 4 year plans that make me filthy rich to be on the optimistic side.

[Technomage]

We have a few milestones ahead. Stability seemed good recently until this week. Then, we still have to have a first bitcoin creation halving and see how the market reacts to that.

I predict that when the block reward halves the price will rise. Miners won't like it but I think the market will like it a lot, which will push the price up and then it won't be so bad for the miners either. Mining difficulty effectively doubles but then again the price increase will compensate.

[muyuu]

We have a few milestones ahead. Stability seemed good recently until this week. Then, we still have to have a first bitcoin creation halving and see how the market reacts to that.

I predict that when the block reward halves the price will rise. Miners won't like it but I think the market will like it a lot, which will push the price up and then it won't be so bad for the miners either. Mining difficulty effectively doubles but then again the price increase will compensate.

However new adopters might think it's unfair to have fewer new coins in circulation by design. Or maybe they won't deem the decreasing worth scheme as viable. Hard to predict what potential new users will perceive of that. Speculators are a different story, I also predict the price to go up short term when this happens or even shortly before. Mainstream adoption doesn't necessarily have to go in parallel with market price.

[notme]

Um... no.
http://en.wikipedia.org/wiki/Velocity_of_money

How does that even apply? I can go to nearly any country in the world without any money, just VISA. There are no rules anymore that apply to money, that's why the world economy is in the mess it is in. Bitcoin offers discipline and new rules, but we haven't figured out what they are yet. There are new economic relationships to be described with math that we haven't yet discovered. Bitcoin is still a big unknown.

Because his "simple math" is complete bunk without considering that the same bitcoin can be passed around to settle multiple transactions.

That said, I don't think his final answer is outrageous.

[cbeast]

Bear rug

[Phinnaeus Gage]

Um... no.
http://en.wikipedia.org/wiki/Velocity_of_money

How does that even apply? I can go to nearly any country in the world without any money, just VISA. There are no rules anymore that apply to money, that's why the world economy is in the mess it is in. Bitcoin offers discipline and new rules, but we haven't figured out what they are yet. There are new economic relationships to be described with math that we haven't yet discovered. Bitcoin is still a big unknown.

Because his "simple math" is complete bunk without considering that the same bitcoin can be passed around to settle multiple transactions.

That said, I don't think his final answer is outrageous.

I had to view a couple cartoons explaining the velocity of money to get up to speed. I still stand behind needing at least 2M users by 4 year's end. My on-average $172.50 USD didn't take into consideration the velocity of money aspect or coins sitting idle or lost or coins stuck in the markets. But, at a $23 USD exchange rate in 4 years to satisfy 15M users ($345M USD market cap), I don't see that cutting the mustard. To put this into perspective, that would only be about $1 USD per every current ZYNGA user.

~Bruno~

[GeniuSxBoY]

A lot of people throwing in the towel now.

[RicePicker]

I am out, with these prices I am mining at a loss.

[trogdorjw73]

I am out, with these prices I am mining at a loss.

Wow, how much do you pay for power? Even a moderately configured mining rig ought to be able to crank out in the neighborhood of 800Mhash/s while drawing 500W. That would give you around 0.52 BTC per day, or 15.6 BTC per month, with a total power use of ~360 kWh. At a price of $4 per BTC, you'd earn $62.40, so your power costs would have to be $0.17 per kWh to break even. I suppose I'm lucky that I live in an area where I pay under $0.10/kWh.

[StewartJ]

I am out, with these prices I am mining at a loss.

I don't blame you.

And you can rest assured that the Daytraders here don't give a dam about the consequences or repercussions
to Bitcoin miners.

They just want to short all their Bitcoins on margin and see if they can predict the next fake wall and then brag
how they can't wait for Bitcoins to hit 1 Dollar.

Brilliant.

[RicePicker]

I am out, with these prices I am mining at a loss.

Wow, how much do you pay for power? Even a moderately configured mining rig ought to be able to crank out in the neighborhood of 800Mhash/s while drawing 500W. That would give you around 0.52 BTC per day, or 15.6 BTC per month, with a total power use of ~360 kWh. At a price of $4 per BTC, you'd earn $62.40, so your power costs would have to be $0.17 per kWh to break even. I suppose I'm lucky that I live in an area where I pay under $0.10/kWh.

Guess what my power cost is .17 per KWh.

[trogdorjw73]

I am out, with these prices I am mining at a loss.

Wow, how much do you pay for power? Even a moderately configured mining rig ought to be able to crank out in the neighborhood of 800Mhash/s while drawing 500W. That would give you around 0.52 BTC per day, or 15.6 BTC per month, with a total power use of ~360 kWh. At a price of $4 per BTC, you'd earn $62.40, so your power costs would have to be $0.17 per kWh to break even. I suppose I'm lucky that I live in an area where I pay under $0.10/kWh.

Guess what my power cost is .17 per KWh.

Bummer. You could always keep mining if you're bullish enough to think we'll go back up to $7 again and then sell when that happens. I have to say I stopped mining when we were down at $2-$2.20 though, and now I wish I hadn't. Heh. Right now, I'm just trying to figure out how low to set my bids/asks to see if I can catch some rapid swings.

[notme]

Walk away from the markets, never stop mining unless you can't afford the electric bill, then just cut back a little .

[muyuu]

I am out, with these prices I am mining at a loss.

Wow, how much do you pay for power? Even a moderately configured mining rig ought to be able to crank out in the neighborhood of 800Mhash/s while drawing 500W. That would give you around 0.52 BTC per day, or 15.6 BTC per month, with a total power use of ~360 kWh. At a price of $4 per BTC, you'd earn $62.40, so your power costs would have to be $0.17 per kWh to break even. I suppose I'm lucky that I live in an area where I pay under $0.10/kWh.

Even with $0.10/kWh you are pushing it considering hardware depreciation. Thanks for supporting the network, anyway.

If I had a big mining rig I'd probably keep it for the time being even at a loss. Getting mining hardware now doesn't make sense though, it makes much better sense to buy coins instead if you think they will recover short-term, or just waiting otherwise.

[GeniuSxBoY]

You guys act like the value can't go up in the future 

[BCMan]

Walk away from the markets, never stop mining unless you can't afford the electric bill, then just cut back a little .

You paying not only electric bill, but also with life of your hardware, it will be payed off in a year right now (freshly bought), and if it'll die earlier... Bitcoin is a waste of money then.

[bb113]

If you think the value may go up in the future but others don't, the others will stop mining, increasing the chances of you finding a block. Then in the future you will make even more money due to this drop. Right?