Topic: Bitcoin to rally to $50+ - page 3. (Read 10454 times)

I think from here, we still have a long way to go until we reach a stable price. A $50+ price in the near future would not be a surprise. I see a lot of newcomers looking at the recent correction and panicking. No worries, this has happened multiple times before.

Ive been in many trades with new and novel technology roll out.  This is the same animal, although a different commodity.
Frankly I do hope people vehemently hate BTC, say for a year or so. and then like all good duplicitous humans they will begin to love it and it will be their god. yes its true.

your heard it here first 

As long as it's still paying the cost of electricity / air conditioning I'll see you there

Totally goes with what I was saying about scarcity per capita. If even 1% of the ~2.1 billion human beings with internet access were to jump on this bandwagon we'd be splitting the ~6.5 million existing btc another 20,950,060 ways. How much do you think the price would jump if the number of bitcoins divided by the number of users meant the average person had 0.31 BTC to their name?

And again, the sudden adoption would spike the number of miners which would spike the difficulty so it would increase proportionately with price

I tend to agree with you.

If the 100th monkey effect hits and it suddenly becomes obvious to everyone in the world that bitcoin is the de facto world currency and invests in $10 worth of bitcoin, bitcoin will top $10,000 overnight irrespective of anything else

Or the people who are staying with it right now... Who by that time will probably be considered "big boys" so yeah

The bitcoin rush was a one-time fluke. There's not likely to be another influx of new investors after the price jump, especially with the market fluctuating so wildly. Investors are getting burned on its volatility.

Your major mistake here was not recognizing that the miners are the original suppliers and the primary issue they fight with daily is the difficulty rating. To this end, difficulty determines the psychology of the individual producer - while it certainly doesn't change the number of total coins available, it changes the number of coins available to each individual seller and therefore the resource becomes scarcer to them and so they demand more money. Resource scarcity is at the heart of supply and demand and it is not absolute - the scarcity of a resource is not simply a matter of "how many of thing X exist" but also "how many people must share the resource pool of X" - as more people must share the pool, the scarcity per capita increases and as so the value does as well.

Scarcity per capita, market depth, production cost and rate, investor demand, end-user demand and much more go into the price of a bitcoin. I'm saying that everyone who is taking some tiny corner that they perceive to be the "supply and demand" at the heart of bitcoin is wrong. There are many factors affecting supply and many factors affecting demand and they are interwoven in a complex and tangled hierarchy. The hierarchy as a whole tends to follow certain rules, such as "price is proportional to difficulty" because the factors built into the network conspire to make it so: more participants means more scarcity per capita and it also means more miners; value rises with difficulty. Neither is the cause of the effect witnessed in the other. They are both caused in this case by a simple increase in the market size without a corresponding increase in resource availability. In some examples one causes the other, in other example neither is the cause but are actually effects of some tertiary cause.

You are all over-simplifying things. If economics were this simple we'd all have to be quite stupid not to have been billionaires long before bitcoin existed.

you mean supply and demand have nothing to do with it. 

I figured that with a high demand and low supply the price went up until they equalized.
and when fewer people were wanting to sell their items the price went even higher.
then someone decided to stop hoarding because they wanted to buy something else put their items up for sale increasing the supply others found that since the supply was higher, they had to reduce their asking price if they wanted to make a sale.

Once the buyers had their fill and wanted no more, the sellers still had some left but had diminishing sales. reducing their prices, attracting sales at a new lower equilibrium point.

It's all difficulty and price?

Damn my econ teacher!

@chodpaba

Nice charts, I see your point. While there is variance regarding BTC Rate Price and Difficulty, the curve tends to adhere to an uptrend.

Got it.

Nice retrace on the BTC Rate, I'm a bit heartened that we didn't punch through 15 - the upward trendline would've been breached.

Look, I'm not saying you're all wrong, I'm saying each of you is right about part of the system. I'm all for Occam's Razor and everything, but neither simple answer correctly describes the system as a whole. Like most economic systems, bitcoin represents a tangled hierarchy of competing and interrelated interests. In this respect, the only difference between bitcoin and any other economic system is that bitcoin is still small enough that we can see most of the bits that make up that hierarchy. Within such a small hierarchy we can spot trends and make predictions somewhat more easily. The primary contention in bitcoin right now is between the miners and the investors. Some see the fact that price and difficulty correspond and say that they are causally linked. They then infer that in most systems one thing is always the cause and one is always the effect. In a tangled hierarchy you will often find various types of closed loops in which the outcome of one action, modulated by other factors becomes the input to the original action and thereby becomes its own cause.

I'm not saying anyone is right or wrong, I'm saying you're all right and wrong at the same time because you're all describing aspects of the same reality without really painting the entire picture.

They follow each other, the system is self-referential.

So your opposing theory is what, that price moves down when a slew of miners mysteriously stop operations for no apparent reason when the market is at an all-time high? Investors create fluctuations above a baseline determined by the producers of a resource, how is this so hard to believe?

It's difficulty that follows the price, not the other way around.

Based on what we've seen so far, 50% retracements from recent doublings isn't anything alarming. It would have to go through 15 to break the longer term trendline on a log chart.

Indeed. $30 was actually high for the current difficulty so I'm not surprised at all to see it settle back to $25-ish numbers. The only way the price goes up disproportionate to the difficulty is in the event of large-scale adoption. If an entire country, for example, decided to use BTC as their national currency we'd have to split the ~6.5 million existing bitcoins between a huge number of people. If the average bank account balance in Country X is 0.02 BTC then obviously the things that 1 BTC would buy there would be immensely valuable, hence driving the cost.

Since I didn't hear news about a country switching to crypto-currency I happily sold at 31 BTC and bought back in at 25 

Don't you guys know the bitcoin ponzi scheme is collapsing right now??
I sold my coins for 10 dollars before it was too late!

no but seriously... i think 50 is on the high end, im guessing next difficulty will only push it to about silver 35-40 USD

Again, this is only half of the equation. Changes in difficulty lag changes in price during times of increased value because the higher price motivates more people to become miners, thus increasing the number of hashes per second computed by the network as a whole.

To see the other half of the equation, look at the times when it appeared that BTC's value was going to tank, note the point at which the market value refused to go any lower. Plot these low points over time and they also correspond to difficulty, in a much tighter curve than the highs or averages do, actually. This is the low point beyond which the miners are hesitant to sell. This is because unlike investors, most miners have ongoing costs to cover and a profit to make for this to be worth their time/effort. I know my electric bill is certainly high enough that I'd be hesitant to sell below a certain point...

The best thing one who hold some bitcoin can do is to save them somewhere safe and than come back and check the exchange rate in a year or two.

Meanwhile maybe get some bitcoin biz started up.