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Author Topic: Miners, sell higher!  (Read 4716 times)
Zibbo
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May 19, 2011, 12:29:04 PM
 #21

There are 216000BTC mined every 30 days (assuming steady six per hour rate), and the volume at Mt.Gox for the last 30 days is roughly 1000000BTC. Now even when assuming that every miner sells every bitcoin they get (which they certainly do not), they would represent only 20% of the market, so it doesn't matter THAT much what miners think about what bitcoin value should be.

I believe that increasingly large portion of the sellers are early adopters with significant amounts of bitcoins, who feel that with current price they can start making nontrivial amounts of additional income by slowly selling, without making a huge dent in their bitcoin holdings. Of course, I don't have anything to back up this claim, other than "that's what I would do", if I had a lot of bitcoins Smiley When you wake up one morning, and realize that your previously almost worthless bitcoins you mined "just for fun", represent 99% of you wealth, you would want to diversify, or use that money to buy something nice, even if you expect bitcoin value to rise more in the future. This will serve to stabilize prices (I guess) and spread bitcoins to a larger audience. Maybe that's what we are seeing now in the markets? A lot more sellers than buyers..
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May 19, 2011, 12:29:11 PM
 #22

We need a miners union to enforce liveable wages.  *cough*

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May 19, 2011, 12:42:08 PM
 #23

Buyers, buy lower!  Grin

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May 19, 2011, 01:04:59 PM
 #24

<sarcasm>

I suggest to issue an edict forbidding miners to sell below some fixed amount X. The only question left is what the X is. Perhaps a poll? 10$ 20$ 40$ or 100$.

</sarcasm>


last one 100$! Grin
wouldn't 500$ be better? or what about 1000$?

from now on, let's all sell our coins for at least 10000$,
whoever sells below that, will be stoned to death.

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May 19, 2011, 01:07:16 PM
 #25

<sarcasm>

I suggest to issue an edict forbidding miners to sell below some fixed amount X. The only question left is what the X is. Perhaps a poll? 10$ 20$ 40$ or 100$.

</sarcasm>


last one 100$! Grin
wouldn't 500$ be better? or what about 1000$?

from now on, let's all sell our coins for at least 10000$,
whoever sells below that, will be stoned to death.
along with anyone who says jehovah.
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May 19, 2011, 01:08:54 PM
 #26

We need a miners union to enforce liveable wages.  *cough*

Would that union be composed of overheated graphics cards chanting "NO MORE HEAT" ? Cheesy
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May 19, 2011, 01:30:27 PM
 #27

There are 216000BTC mined every 30 days (assuming steady six per hour rate), and the volume at Mt.Gox for the last 30 days is roughly 1000000BTC. Newly minted coins represent 20% of the market,

yes, at least 80 % of mtgox volume is the sum of early adopters selling, speculative trading operations and maybe there's room for fictional trades moving the market ; )

I don't think the price is tied to the difficulty.

+1

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williamthec
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May 19, 2011, 01:39:22 PM
 #28

I don't think the price is tied to the difficulty.

+1

There should be enough capacity of market if you are expecting a higher price. Once more USDs are introduced to this exchange market, the price would go higher.

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May 19, 2011, 02:18:52 PM
 #29

I don't think the price is tied to the difficulty. hmm I may be wrong though I'm totally new. Anyway I wanna ask what are my options to sell/ BTCs ?
The price is tied to difficulty and overall network hashrate.
If network hashrate increases more than difficulty then price will go down.

In which case the price for 1 BTC will be alot higher the day difficulty gets so high that mining is no longer profitable.

I'm not 100% sure if I've gotten the system right though. Can someone prove me wrong?

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Binford 6100
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May 19, 2011, 05:08:59 PM
 #30

The price is tied to difficulty and overall network hashrate.
If network hashrate increases more than difficulty then price will go down.

In which case the price for 1 BTC will be alot higher the day difficulty gets so high that mining is no longer profitable.

I'm not 100% sure if I've gotten the system right though. Can someone prove me wrong?

i don't know how to prove you wrong but difficulty & hash rate represent costs of mining for new coins.
which should not misunderstood as value. especially value of all coins.

the fact that anybody spend meat space money for hardware, electricity and bandwidth
can not be simply interpreted as an equation between costs and exchange rate.

it is a matter of demand and supply at what price level the trade happens.
you can spend bazilions of kuna to buy & operate mining equipment but if no one wants to buy
you either keep the coins or sell at what is offered. no one cares what did you spend on mining
price follows difficulty because of people willing to help mint coins and add power to the hashing
network because they can profit from this activity.

if there would be no influx of new money through exchanges, the price would be still in a 10 cents limbo
i thing that greed is leading, followed by difficulty. price is irrelevant.

You can't build a reputation on what you are going to do.
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May 19, 2011, 05:19:13 PM
 #31

The price is tied to difficulty and overall network hashrate.
If network hashrate increases more than difficulty then price will go down.

In which case the price for 1 BTC will be alot higher the day difficulty gets so high that mining is no longer profitable.

I'm not 100% sure if I've gotten the system right though. Can someone prove me wrong?

i don't know how to prove you wrong but difficulty & hash rate represent costs of mining for new coins.
which should not misunderstood as value. especially value of all coins.

the fact that anybody spend meat space money for hardware, electricity and bandwidth
can not be simply interpreted as an equation between costs and exchange rate.

it is a matter of demand and supply at what price level the trade happens.
you can spend bazilions of kuna to buy & operate mining equipment but if no one wants to buy
you either keep the coins or sell at what is offered. no one cares what did you spend on mining
price follows difficulty because of people willing to help mint coins and add power to the hashing
network because they can profit from this activity.

if there would be no influx of new money through exchanges, the price would be still in a 10 cents limbo
i thing that greed is leading, followed by difficulty. price is irrelevant.

His point is that mining is the only source of inflation in the system. If the network hashrate increases a lot compared to difficulty, let's say 12 blocks an hour instead of 6, then for the time, until the difficulty adjusts, the supply of Bitcoin will increase.

The point about mining being only 20% of the total market is irrelevant. It is the only inflationary component to the market, so it is the only one that naturally reduces price.

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Litt
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May 19, 2011, 05:32:09 PM
 #32

Many of us need to get over the fact that we are not early adopters.
You, sir, are one of the early adopters, along with everyone else who is already here. Not even one-third of the bitcoins have been mined so far.

Also, remember that that the earliest adopters could only mine with CPU. Today the CPU is 50 times slower than a decent GPU, but back then the CPU mining code was less efficient than it is today, maybe 100 times slower than a GPU.

Also, the earliest adopters spent their time or their bitcoins making the system workable. Today, people can get a GPU and just start mining, but it wasn't always so. The bounty for the first open source GPU mining code was 10,000 BTC, paid by one of the earliest adopters, but you can use that code for free!

Sounds to me you are exactly the type I described. The points is that the 1/3 that has been distributed went to a fraction of the entire miner population and the rest will be divided into much smallers bits due to a huge number participating now. Are there anything left for us to trying take advantage? Yeah for sure. It's known "mining profits" today. It will dimish into next to nothing and it's profitable days are limited. People also seem to forget that we will not profit from mining forever which is not gonna happen.

And no we are not the on the same boat as much as you and I would like me to believe. Even with CPU only mining, having even 3-4 digit difficulty not single digit, would mean that it would be mining at much faster rate. If you want to sell me a couple thousand btc at less than .5 per and maybe I'll barely have a fraction of someone who has been mining for 6mo+ let alone a year or more.
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May 19, 2011, 05:33:29 PM
 #33

We need a miners union to enforce liveable wages.  *cough*

Wow I can't tell you how refreshing it is to be reading comments like this and know that they're sarcasitc!!!  Thank you Bitcoin for allowing me to find other people who actually understand money and economics!!!  Smiley Smiley

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May 19, 2011, 05:33:33 PM
 #34

If you want the price of bitcoins to increase, make using bitcoins more beneficial to people. Right now, bitcoins are mainly getting more expensive because they started rising in price a bit and people started buying them to sell later at a profit. This made the price go up further and even more people started buying them. The interest in bitcoins will start dying, people will realize that they can't really do much with their bitcoins and they will start selling them at lower and lower prices, and the price will fall.

What we need are more services that can be payed for in bitcoins, more goods, etc. Just telling miners to sell their bitcoins at a higher price will not help you.

+1
You summarized it perfectly.

BTC/USD Prices are at least in a short term downward trend.

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Zibbo
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May 19, 2011, 05:46:17 PM
 #35


His point is that mining is the only source of inflation in the system. If the network hashrate increases a lot compared to difficulty, let's say 12 blocks an hour instead of 6, then for the time, until the difficulty adjusts, the supply of Bitcoin will increase.

The point about mining being only 20% of the total market is irrelevant. It is the only inflationary component to the market, so it is the only one that naturally reduces price.

I think you are wrong. Bitcoin supply isn't all 6M bitcoins that have been minted, but only those that are used for trading. From the market point of view, bitcoins that have been minted but never used for trade, might as well not exist. I suspect that a lot of that kind of coins are entering the market for the first time.
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May 19, 2011, 05:48:22 PM
 #36

We need a miners union to enforce liveable wages.  *cough*
WIN!
Zibbo
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May 19, 2011, 06:03:46 PM
 #37

Sounds to me you are exactly the type I described. The points is that the 1/3 that has been distributed went to a fraction of the entire miner population and the rest will be divided into much smallers bits due to a huge number participating now. Are there anything left for us to trying take advantage? Yeah for sure. It's known "mining profits" today. It will dimish into next to nothing and it's profitable days are limited. People also seem to forget that we will not profit from mining forever which is not gonna happen.

Mining will always be profitable for some people, as long as there is any market for bitcoins. How to be one of those people? Have a more cost effective rig than rest of the miners.
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May 19, 2011, 06:04:53 PM
 #38

Very easy solution.

Miners (not me), sell your rigs for BTC. This will increase the demand for BTC while lowering supply. ATI cards are hard to find -- decent 5850s - near-impossible. Great time to charge a premium for it!

Even easier solution -- anyone who recognized how overpriced BTC was when it was near $9 (probably just about everyone reading this) probably sold off their BTC for MtGoxUSD. Let's assume half of those people still haven't withdrawn their $ from MtGox. Simply place buy orders up to the point of highest reasonable resistance (I'd say that's $7.50). Once we're past that point, it should be very easy for the market to keep swinging upward. I personally have buy orders and sell orders in all the time within a 3-point spread. All miners looking to boost the price should. Buy low, sell high -- lessen others' supply and boost your own. More control of the market, more your buy & sell orders matter.  Wink

At any rate, I'm still in the black until the price of BTC drops below $1 at current difficulty, and I'll be shocked if the price of BTC doesn't increase at least one full point by the end of the week to meet miners' lack of interest in posting BTC for mediocre returns Smiley

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May 19, 2011, 06:07:39 PM
 #39

Quote
Miners, sell higher!

Sell for $$$ each, and profit more.  It's worth more now!

Nice move, do you want to buy my coins for 20 bucks each, cause I have kids and wife ... you know ... Undecided
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May 19, 2011, 06:14:00 PM
 #40

I think you are wrong. Bitcoin supply isn't all 6M bitcoins that have been minted, but only those that are used for trading. From the market point of view, bitcoins that have been minted but never used for trade, might as well not exist. I suspect that a lot of that kind of coins are entering the market for the first time.

What coins do you expect have the highest probability of entering the market? Coins bought by "hoarders", or coins "minted" my miners? Putting aside day traders and the like, several elements indicate that a miners is much more prone to sell his production than a long term investor is.

Nevertheless, the point stands. A coin that has been accessed through trading, no matter how long it is held upon, has already brought in dollars in the market. A freshly minted coin didn't.

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