Why is the value dropping?

[smalltimer]

lol @ the idea of bitcoin with variable coinsupply. lmao
Fiat is better than that for sure

Price stability requires an elastic supply, currency is a system of measurement, we dont limit the number of inches and we shouldn't limit the number of units of value.

lol, good luck with that.

I disagree. Pricestability does not need central planning, it just need lower dilution of existing coins (aka lower inflation).
Bitcoin is not designed to hold its value, it is designed to be volatile.

Lower dilution of coins (lower inflation) would lead to better properties in holding value and thus to shorter bearmarkets. Bubbles would still occure and pop but it would come back more reliable and quickly.

Go ahead and relaunch it with central control of moneysupply and see if you can get that sold.  

What you are actually basically saying is: "bitcoin has failed because it has no central control and the FED is doing it right"
Can't be serious.

[sublime5447]

lol @ the idea of bitcoin with variable coinsupply. lmao
Fiat is better than that for sure

Price stability requires an elastic supply, currency is a system of measurement, we dont limit the number of inches and we shouldn't limit the number of units of value.

lol, good luck with that.

I disagree. Pricestability does not need central planning, it just need lower dilution of existing coins (aka lower inflation).
Bitcoin is not designed to hold its value, it is designed to be volatile.

Lower dilution of coins (lower inflation) would lead to better properties in holding value and thus to shorter bearmarkets. Bubbles would still occure and pop but it would come back more reliable and quickly.

Go ahead and relaunch it with central control of moneysupply and see if you can get that sold.  

What you are actually basically saying is: "bitcoin has failed because it has no central control and the FED is doing it right"
Can't be serious.

That is what you are saying. I am saying the USD and bitcoin are both failures because they both work on the same principles. The miners are the central issuing authority, soon to be two brothers alone. https://bitcointalk.org/index.php?topic=377701.0

  Two Kinds of Money

1.The Scarcity Model: A single uniform quantity in limited supply made valuable by its own scarcity.
In other words, the value of this type of money depends on the supply of, and demand for, the money commodity itself. Conventional definitions of money define money only in terms of this model, a "medium of exchange". Examples are: cowries, gold and silver, fiat cash and coins, bank credit, and now, in the model's purest and most spectacularly speculative form, Bitcoin.

2. The Abundance Model. A promise of something specific from someone specific made valuable by its redemption in real production. The value of this type of money is defined by the promised redemption in goods and/or services. As such, this type of money is promises of an indefinite number of non-uniform commodities in indefinite supply and, unlike the limited quantity "coin" concept of money, the total quantity of these credits in circulation does not affect their value, because the value of a credit is defined by what its issuer will redeem it for in real goods and/or services. Examples are: business-to-business barter credits, customer rewards, travel points, discount coupons, mutual credit systems

[smalltimer]

lol @ the idea of bitcoin with variable coinsupply. lmao
Fiat is better than that for sure

Price stability requires an elastic supply, currency is a system of measurement, we dont limit the number of inches and we shouldn't limit the number of units of value.

lol, good luck with that.

I disagree. Pricestability does not need central planning, it just need lower dilution of existing coins (aka lower inflation).
Bitcoin is not designed to hold its value, it is designed to be volatile.

Lower dilution of coins (lower inflation) would lead to better properties in holding value and thus to shorter bearmarkets. Bubbles would still occure and pop but it would come back more reliable and quickly.

Go ahead and relaunch it with central control of moneysupply and see if you can get that sold.  

What you are actually basically saying is: "bitcoin has failed because it has no central control and the FED is doing it right"
Can't be serious.

That is what you are saying. I am saying the USD and bitcoin are both failures because they both work on the same principles. The miners are the central issuing authority, soon to be two brothers alone. https://bitcointalk.org/index.php?topic=377701.0

  Two Kinds of Money

1.The Scarcity Model: A single uniform quantity in limited supply made valuable by its own scarcity.
In other words, the value of this type of money depends on the supply of, and demand for, the money commodity itself. Conventional definitions of money define money only in terms of this model, a "medium of exchange". Examples are: cowries, gold and silver, fiat cash and coins, bank credit, and now, in the model's purest and most spectacularly speculative form, Bitcoin.

2. The Abundance Model. A promise of something specific from someone specific made valuable by its redemption in real production. The value of this type of money is defined by the promised redemption in goods and/or services. As such, this type of money is promises of an indefinite number of non-uniform commodities in indefinite supply and, unlike the limited quantity "coin" concept of money, the total quantity of these credits in circulation does not affect their value, because the value of a credit is defined by what its issuer will redeem it for in real goods and/or services. Examples are: business-to-business barter credits, customer rewards, travel points, discount coupons, mutual credit systems

so what other can be the solution than dramatically lowering bitcoins inflation/ new coins per day?

The high inflation enforces centralisation. Lower inflation would mean less competition amongst miners since they would not be a main marketforce anymore.

I'd say: bring the impact down of what miners can do to the markets each and every day and you'd reap a more decentralised network and more stable and better prices.

It is a fault in bitcoins design to have miners being a burden on the market for such a long time. (just my 2 cents)

miners have too much power over the markets, trade and price. Too much money is extracted by them. It's not their fault or the fault of hardware manufacturers, it's the fault in the specs. To break it down to one sentence: Halving takes too long.

[rebuilder]

Sublime5447: The abundance model sounds like a great way to create a cascading credit crisis to me. Kind of like Ripple. What am I missing?

[sublime5447]

Sublime5447: The abundance model sounds like a great way to create a cascading credit crisis to me. Kind of like Ripple. What am I missing?

The credits must be redeemable, you can only issue credits that you have the ability to redeem in good or services. It would have to be tied to a reputation keeper.

[sublime5447]

Coins would be issued into existence instead on being created through mining.

[o_o]

Relax man, some early adopter in this moment solding its bitcoin in quantity of 100 bitcoin in way to not super-decreasing the price.

[smalltimer]

Coins would be issued into existence instead on being created through mining.

which doesn't provide any security for the network, it does just bring in central control. So really brilliant idea right there  

How are you doing transactions without miners? Go POS-coin? (lol)

[NotLambchop]

.@smalltimer:  Could you explain why large block rewards encourage centralisation, while smaller ones discourage it?  Buying mining gear in quantity will still be cheaper, building megafarms in cold climates with low industrial energy costs will still be cheaper.
What am I missing?

[smalltimer]

.@smalltimer:  Could you explain why large block rewards encourage centralisation, while smaller ones discourage it?  Buying mining gear in quantity will still be cheaper, building megafarms in cold climates with low industrial energy costs will still be cheaper.
What am I missing?

sure, large rewards give miners in general more power over the market and the big ones of course dump harder enforcing competition making monopoly-process even faster.
Right now large miners dumping making it even harder for small ones to exist.

IF miners would not be such a force/impact on the market they would only compete on the level you pointed out and not directly in the markets.


On top of that: bitcoin would be less volatile, would hold value better and would attract therefore more investors.

PLUS: if halvings were faster, inflation lower and valuation better miners would be holding the coins they mine because appreciation in price would be anticipated.

So really the high inflation in bitcoin is a deadly mistake

In bitcoin right now it is: "who can offer more cheaper to drive the others out of buisiness?"
only possible because they are allowed to mine significant number of coins every day.
if they were given less power over the market this effect would be contained.

[rebuilder]

Sublime5447: The abundance model sounds like a great way to create a cascading credit crisis to me. Kind of like Ripple. What am I missing?

The credits must be redeemable, you can only issue credits that you have the ability to redeem in good or services. It would have to be tied to a reputation keeper.

Can you expand on that? I don't see how you could 100% guarantee an issuer has the ability and willingness to redeem the credits they issue.

[sublime5447]

Sublime5447: The abundance model sounds like a great way to create a cascading credit crisis to me. Kind of like Ripple. What am I missing?

The credits must be redeemable, you can only issue credits that you have the ability to redeem in good or services. It would have to be tied to a reputation keeper.

Can you expand on that? I don't see how you could 100% guarantee an issuer has the ability and willingness to redeem the credits they issue.

Nothing is 100 percent sure, it is not my proposal, it is Paul Grignon's (the creator of money as debt)

Link to proposal http://www.moneyasdebt.net/

https://www.youtube.com/watch?v=XyWfUqEyIZc         it is important to note that perpetual coin is just the standard and does not circulate.

[moko666]

OP, don't worry about bitcoin value drop
bitcoin is on the way to a stable growth and in 2015 you will see bitcoin's value increasing
current price dropped bcoz of some international financial decisions

[oblivi]

OP, don't worry about bitcoin value drop
bitcoin is on the way to a stable growth and in 2015 you will see bitcoin's value increasing
current price dropped bcoz of some international financial decisions

Current price is down because of lack of knowledge, fear and general lack of interest. We'll see.

[smalltimer]

OP, don't worry about bitcoin value drop
bitcoin is on the way to a stable growth and in 2015 you will see bitcoin's value increasing
current price dropped bcoz of some international financial decisions

Current price is down because of lack of knowledge, fear and general lack of interest. We'll see.

if you look at the charts: who can be selling coins with profit right now? Only miners or people who bought before last November and i tell you it's the miners.

[NotLambchop]

.@smalltimer:  Could you explain why large block rewards encourage centralisation, while smaller ones discourage it?  Buying mining gear in quantity will still be cheaper, building megafarms in cold climates with low industrial energy costs will still be cheaper.
What am I missing?

sure, large rewards give miners in general more power over the market and the big ones of course dump harder enforcing competition making monopoly-porcess even faster.
Right now large miners dumping making it even harder for small ones to exist.

Large rewards are equally large for both hobby and commercial miners.  If small rewards are sufficient to make small farms profitable, surely they're sufficient to make big ones profitable also.  Hashrate eventually increases to the point of making small mines unprofitable, while large ones continue operating.
Just what we see happening now.

IF miners would not be such a force/impact on the market they would only compete on the level you pointed out and not directly in the markets.

This in no way affects centralization.

On top of that: bitcoin would be less volatile, would hold value better and would attract therefore more investors.

Either the notion of "we need all the hashpower to make network secure" is junk, or Bitcoin will also be more vulnerable to attack [potentially making it less attractive to investors].

PLUS: if halvings were faster, inflation lower and valuation better miners would be holding the coins they mine because appreciation in price would be anticipated.
So really the high inflation in bitcoin is a deadly mistake

Again:  Lower rewards = lower network security, higher rewards = higher network security.  This is the basic premise on which Bitcoin network was built.  In hindsight, it's easy to say that miners should not be rewarded as much as they are, but, at the outset, it wasn't.  Which brings me to my original point:  In fiat economy, it's possible to adjust to predicaments like this, in Bitcoin it is not.  

In other words, if I agreed with you that block reward is too high, we could do something about it, like make it smaller.  As it stands, there's nothing we can do, short of scrapping Bitcoin and starting from scratch.  Making all this just empty rhetoric.
See?

[smalltimer]

Either the notion of "we need all the hashpower to make network secure" is junk, or Bitcoin will also be more vulnerable to attack [potentially making it less attractive to investors].

[...]

Again:  Lower rewards = lower network security, higher rewards = higher network security.  

there is the logical fault.

"Lower rewards = lower network security, higher rewards = higher network security"
is not 100% correct because:

"Lower rewards also = hgher pricestability, higher scarcity, higher valuation and ultimately = more investement" which in turn makes mining more profitable (more network security)

I'd say at the point where real investement happens (real money comes in) it doesn't make so much difference for the miner if he mines less coins and sells them for more or mines more coins and dumps down the market. It is just: the miners dumping constantly keeps away investors , makes mining unprofitable, causes centralisation faster and in the long run makes network less secure maybe even (would remain to be seen)


also: lower rewards/inflation gives additional sellingpoint for the coin. Right now with 10% inflation btc is no competition to fiatmoney of the western world only to countries with higher than 10% inflation.

[NotLambchop]

You seem to be overlooking the important bit:

...
Which brings me to my original point:  In fiat economy, it's possible to adjust to predicaments like this, in Bitcoin it is not.  

In other words, if I agreed with you that block reward is too high, we could do something about it, like make it smaller.  As it stands, there's nothing we can do, short of scrapping Bitcoin and starting from scratch.  Making all this just empty rhetoric.
See?

TL;DR:  There's nothing you can do about Satoshi's mistake now.  That's the fatal flaw of predetermined inflation.

[smalltimer]

right now you need a sustained growth of 10%+ annually of the userbase only to hold value.

inflation = necessary growth of the userbase-money to hold value (no matter what the valuation/marketcap is)

my approach would be "make inflation reasonably low and let the free market sort out the rest"

satoshi made a little mistake there with the rewarddecrease. Didn't foresee the marketforces on high marketcap correctly.

There is now the option for the community to go through it with pain for the next 6 to 10 years or to correct that either in bitcoin itself or in form of an altcoin/new coin that offers an solution to that.  (my 2 cents)


(was edited)

[NotLambchop]

^Just a minor correction:  A "centrally controlled elastic reward" would make Bitcoin irrelevant.  The cool/interesting thing about Bitcoin is it doesn't rely on central authority.  With centrally-controlled elastic reward, that's gone.
Just a clumsier version of fiat.