BTC: 30 USD to 5 USD

[awigaxeh-443]

How did the price of BTC drop down so significantly? Supply is decreasing so shouldn't demand increase?

[moocow1452]

Bitcoin thrives on activity, sort of how inside a microwaved burrito, the molecules move around a lot faster than a frozen one, so it's has more heat. If everyone wants to buy Bitcoin, it's worth more to more people. But if everyone wants to sell, then value takes a hit.

[wyager]

OK, first off, supply and demand are independent. The combination of both supply and demand determine the price.

Second, the supply of bitcoins is constantly increasing. 50 new BTC are created about every 10 minutes. Eventually, no more BTC will be created, but then the supply will simply stay constant.

The reason the price was so high was mostly due to speculation (intentional or not). In an ideal world, the price of a currency would reflect the value of trade with that currency divided by the amount of that currency. The same goes for stocks, real estate, etc.

However, because people wanted BTC because they thought they were a good idea/smart investment/secure/whatever, the demand for Bitcoins shot up even though trade wasn't increasing that much. Bitcoins were harder to get, and people were willing to pay $30USD to get one. However, something caused people to not want Bitcoins as much anymore. It might have been the collapse of some prominent BTC services, it might have been hacks, I don't really know. I haven't been around that long.

[frograven]

this may expand on the matter:
http://lmgtfy.com/?q=bitcoin+price+crash

[moocow1452]

this may expand on the matter:
http://lmgtfy.com/?q=bitcoin+price+crash

Specificly the scare started when Mt. Gox took in a bunch of forged coins. Block chain sniffed it out within minutes, but the damage was done to the value, and Mt. Gox decided to roll back all internal trades to the point before the bad deposit, a lot of people wanted out, and down went the spiral.

[Count Schlick]

But this "crash" was old news right?

I remember a lot of tech blogs discussing the "rise and fall" of bitcoin as though it were now a failed experiment, but I don't see it that way at all. My layperson take on it was that it was a speculation bubble, with a vastly overinflated price. It's been stable for a while now though.

I never saw Bitcoin as an investment opportunity, just a trading medium, and an experimental one at that.

[Miner612]

I guess this is the appropriate forum for a complete n00b.

[BBLotus]

Biggest issue bitcoin has right now is that it can't accept debit card transactions.

Diversify the traffic monopolated by Mt. Grox.
Make Bitcoin easier to install and download (2gb wallet at 50kbs really sucks.) <---- Put this in a torrent file!
Debit/Credit Cards. (Make a deal with those Cash 4 Cards, Check Cashing places? They wouldn't mind the extra business to compete with major companies like Visa/Mastercard.

[wyager]

Second, the supply of bitcoins is constantly increasing. 50 new BTC are created about every 10 minutes. Eventually, no more BTC will be created, but then the supply will simply stay constant.

Actually, the supply will decrease because of lost wallets.

True, but the effects of lost money will be negligible.

Biggest issue bitcoin has right now is that it can't accept debit card transactions.

Diversify the traffic monopolated by Mt. Grox.
Make Bitcoin easier to install and download (2gb wallet at 50kbs really sucks.) <---- Put this in a torrent file!
Debit/Credit Cards. (Make a deal with those Cash 4 Cards, Check Cashing places? They wouldn't mind the extra business to compete with major companies like Visa/Mastercard.

Putting the block chain in a torrent file is a big security risk. First they would have to re-design the client so that it would verify the entire chain after being downloaded. But I agree, it took me days to get the entire chain.

[hazek]

Supply is decreasing

Supply is increasing by 50BTC per ~10min which comes out around 7200BTC per day.

[atsoat]

Second, the supply of bitcoins is constantly increasing. 50 new BTC are created about every 10 minutes. Eventually, no more BTC will be created, but then the supply will simply stay constant.

Actually, the supply will decrease because of lost wallets.

True, but the effects of lost money will be negligible.

Biggest issue bitcoin has right now is that it can't accept debit card transactions.

Diversify the traffic monopolated by Mt. Grox.
Make Bitcoin easier to install and download (2gb wallet at 50kbs really sucks.) <---- Put this in a torrent file!
Debit/Credit Cards. (Make a deal with those Cash 4 Cards, Check Cashing places? They wouldn't mind the extra business to compete with major companies like Visa/Mastercard.

Putting the block chain in a torrent file is a big security risk. First they would have to re-design the client so that it would verify the entire chain after being downloaded. But I agree, it took me days to get the entire chain.

you can speed up the initial sync by downloading the blockchain from
http://eu1.bitcoincharts.com/blockchain/
see https://en.bitcoin.it/wiki/FAQ#How_long_does_.22synchronizing.22_take_when_the_bitcoin_client_is_first_installed.3F_What_is_it_doing.3F

[wyager]

Second, the supply of bitcoins is constantly increasing. 50 new BTC are created about every 10 minutes. Eventually, no more BTC will be created, but then the supply will simply stay constant.

Actually, the supply will decrease because of lost wallets.

True, but the effects of lost money will be negligible.

Biggest issue bitcoin has right now is that it can't accept debit card transactions.

Diversify the traffic monopolated by Mt. Grox.
Make Bitcoin easier to install and download (2gb wallet at 50kbs really sucks.) <---- Put this in a torrent file!
Debit/Credit Cards. (Make a deal with those Cash 4 Cards, Check Cashing places? They wouldn't mind the extra business to compete with major companies like Visa/Mastercard.

Putting the block chain in a torrent file is a big security risk. First they would have to re-design the client so that it would verify the entire chain after being downloaded. But I agree, it took me days to get the entire chain.

you can speed up the initial sync by downloading the blockchain from
http://eu1.bitcoincharts.com/blockchain/
see https://en.bitcoin.it/wiki/FAQ#How_long_does_.22synchronizing.22_take_when_the_bitcoin_client_is_first_installed.3F_What_is_it_doing.3F

I know that's an option, but

these clients have somewhat weaker security, are less mature, and don't contribute to the health of the P2P network.