Topic: $55 - really? Really? Really? (Read 11927 times)

Thank you for answering! That sounds quite sensible to me.

personally, I recalculate it periodically.

I choose to evaluate my operation as a whole. Total cost to run relative to earnings at btc/usd rate. I include a repayment plan for any hardware i've purchased. Often this amounts to vastly reduced earnings in a given time period, since I'm inclined to think of the $700 profit as 'paying off' the last 2 graphics cards I bought and only making 100 bucks that week.

I know this post was from a few days ago but can anyone explain to me the logic in it?

I don't see the drug trade being very supportive of the bitcoin price at all. Tear apart my logic and show me where I'm wrong.

Presuming a drug dealer sold $1,000 of (X) per day when coins were stable around $30/BTC.
That means that on any given day drug purchasers were buying $1,000 of new BTC on a market = (-33.33 BTC)
AND the drug dealer was selling yesterdays $1,000 of BTC on a market = (+33.33 BTC)
As long as his sales stay flat the drug dealer exerts no pressure on BTC price at all.

In fact if the the BTC price goes up then the drug dealer needs fewer coins to transact his business.
Only if the price goes down does he needs more coins.
As such, the support level that drug dealing lends must be less than $30/BTC

If the price oscillates around $30/BTC slowly the drug dealer doesn't have to care.
If the price moves faster, drug dealers are very likely to become day to day speculators and amplify the oscillation.
(turn over BTC slowly while the price moves up, turn over BTC quickly while the price moves down.

In no way to I see how the drug trade could possibly "support" a BTC price at the $550 level. You would have to presume that the drug trade had grown crazy exponentially since the $30/BTC level.

The real problem are two:
In short term, there is no centralized way of controlling it. That was the classical approach before bitcoins.
In long term, it will keep being volatile unless we develop a self-sustaining Bitcoin economy, that means businesses that can sell in bitcoins and get supplies in bitcoins, pay employees in bitcoins, because they can purchase whatever they need for a comfortable life in bitcoins.

Until that can happen, volatility will keep going and going unless its liquidity increases, otherwise it will keep fluctuating until it destroys the currency.
A "national" currency with a "national" economy.

The next step for stability is to become the first global digital nation.
We will eventually have to refer to a Bitcoinian GDP when we are all producing goods solely for the Bitcoin market.
I mentioned here and I thought about my worries about the difficulties of such future:
https://bitcointalksearch.org/topic/m.1860746

I'm fascinated by this math but it doesn't seem logical to me. I don't think the break-even prices you give are constant. Now I haven't thought about this a lot so there's a strong likelihood I'm wrong. Please show me where.

Manfred says currently he mines 6.3 BTC/month at a cost of $150/month or $23.80/BTC
Adrian-x says the same (I'm guessing) calculation gives him $17.76/BTC

It seems to me however that at current BTC prices similar rigs must be profitable for everyone else as well. This encourages more people to mine raising the difficulty.

As the difficulty goes up, your constant hash rate rigs generate LESS coins at the same energy costs. RAISING what you see as your break-even rates. So say the hash rate doubles and difficulty doubles. Now aren't your break-even rates $47.40/BTC and $35.52/BTC respectively?

Do you simply recalculate your particular rigs minimum break-even every time the difficulty changes?
Can you do this calculation in advance? Or are you simply doing it retrospectively.

This happened because Bitcoin has no approperiate structure for exchange against fiat. No one got a stake in the game but us "Who believe in bitcoin". So either address the real problem and do something about or speculate silently like other useless non-contributing-positivly members.

Totally.  I calculate that my break-even is at ~20$/month and I have a super small operation (360 MH/s; 3MH/watt). 

Not to mention the hardware cost.  Certainly no [intelligent] new miners will jump in.

Agreed. I don't know very many serious miners (10s or 100s of gh/s of mining hardware) who'd operate at a loss for very long...

That being said, I'm still adding GPUs to my fill slots on my rigs. the 7950s I'm buying are still profitable at anything over 12.50 But I'm not actually selling any btc currently. I pretty much sold all my reserves when it hit 240, so the hardware I'm adding and the electric costs are covered until the end the end of the year. Now I'll just forget about the market and take another look in december. My biggest decision is how much of the left over fiat from my profit taking pre-correction should be used to purchase btc at these lower prices.

This happened because of greedy fuckers.

We could of steadily reached 500 dollars by the end of this year,from 10k BTC for a single large pizza.

But noooooo, we had to reach the highest price as soon as possible.

What he meant was that the prices can go way lower than the production cost, in which case miners might simply stop mining.
It is not like the prices on the market are hardcoded just because it is the cost of production, that's a fallacy.
The $50 a bitcoin is a pretty tough resistance, but if it breaks through it, mining might not be an economical venture for many.

Some might choose stopping the mining altogether until the price recovers, and some others might think that it is just temporary and simply keep generating bitcoins at a short term loss believing that the prices will rise again in the future and recoup their losses then.

In either case, the bitcoin market price is not tied up to the cost of production.

poppycock.

Just keep repeating it to yourself over and over until you believe it.

Miners are the primary suppliers of bitcoins for sale at sane prices. The vast majority of miners sell some large percentage of mined coins to cover electric and hardware costs. Whatever's left they speculate with...

The degree of speculation of any subset of miners is up for debate, it can be as simple as holding until the price reaches some point or as complicated as day trading.

~

Speculators probably actually control more bitcoin that miners... but they generally aren't placing market orders like most miners are.

Shady crap-bank?
Say that to the Argentines, to the Greeks, to Cypriots and maybe soon to the whole European Union.
The whole fractional banking concept is rotten and it will hit harder than you imagine. It is not about a single crappy bank, it is about the system itself.

The only banks that will survive are the Islamic banks, because their superstitious belief that usury is sinful made them create the most stable banking system in the world: full-reserve and no interests in loans.

So before bashing something new to you, you should wonder how little you know.
You guys are bashing that bitcoiners are making money without creating value, what people here are doing is insignificant compared to what actual banks are doing, which is exactly that but on steroids. Ever heard about the money multiplier mechanism inherent in the fractional reserve banking? They create money out of thin air, without printing bills. The most ludicrous way of making profits by doing nothing. A single bank is making more per day than the whole bitcoin economy a year.

The big difference here is that bitcoins are not creating money out of thin air, but appreciating in value in response to actual demand.
The fractional reserve banking is a money printing machine without the ink, and EVERY western bank makes money that way. Infinitely.
If you all bashers still don't understand the difference, go back to your textbooks because this is flying way over your heads.

Well pointed

Dude I'm sorry for your loss but first of all you will not lose your 720 000 unless that bank is a shady crap-bank (and in that case it's your fault) but you will just pay a small tax on it. On the topic you didn't invest your money but kept them in fiat currency which is just as bad as keeping them in bitcoins or gold or anything else.

Depending on what you do 820 000 isn't necessarily to much to have in currency so I can't blame you dude, I'm sorry for your loss

Yeah I read your thread last week, it is sad and irritating to see what happens. I feel for you.

Actually your story is one of the things that convinced me to invest in Bitcoin business.
Well.. investing skills since I'm nearly broke But I'm good at software design, so I was thinking to create something to help Bitcoin to fight back against the madness of the bankers.

Welcome to the party Mr. Keynes.

Contrary to your belief, savings don't destroy the economy. There's a good series of videos on youtube on the subject, the channel is: https://www.youtube.com/user/EconStories

BULLSHIT!

I invested all my money in my own successfull business. And I lost it all when government decided to grab it to repay national debt!
Read this. All my fiat assets invested to economy went to HELL!
Fuck EUR, fuck USD, I'm buying BTC right now! At least they cannot seize it.

UR HURTING MURICAAH!


Is someone printing morons?

By printing I mean that 85 billion dollar that FED added every month to his balance sheet, just number of zeros, no paper money is printed physically

You have to use your labour/service to exchange for those numbers, comparing trade camels for harems, which one is more fair?

without electricity?