Topic: Everyone is saying BTC ganna go up, but (Read 3105 times)

It is going to go up, if everyone believe in it then it will.

Big up? you must be very new to this

suddenly going very fast high may be something fishy going to be happening soon big players doing something for this big up

Considering the volume on exchanges the newly minted coins cannot really have any effect at all.

Everyone saying it is going to rain outside today, but why is it getting colder?

(hint: those things aren't related).

What matters is how many dollars are chasing the bitcoins that are available for sale, not how many bitcoins are generated per day.

I guess that depends on what you mean. Block rewards have significant impact on price. There are ~11.8M BTC in existence, and ~4k being pumped out each day (higher than 3.6K "target" because of rapidly increasing hashpower on network, which 2-week difficulty adjustment window is too slow to accurately adjust for). That's ~.000339% daily inflation, and I'd guess ~75% of that quickly turns back into cash to purchase more miners or to "cash out" - but that's an out-of-ass guess, no clue what the real numbers are there. Assuming 75% "cash-out rate," and daily exchange volume of right around 40KBTC, they make up ~7.5% of the daily transaction volume.

While that's significant, that simply isn't enough influence (rather, there isn't enough new coin generation) to really determine the price (though it creates downward pressure), so price instead determines how much hashpower is on the network (though this correlation is currently broken due to disruptive ASIC tech - but once upfront ASIC prices are negligible compared to electricity costs again, this correlation will come back). Miners only had a "huge" impact on price - where they alone could set the price - back in the first year or so of Bitcoin, when the number of coins produced per day was really substantial, and Gox would've been majorly impacted by a dump of the day's 7.2K coins.

Mining (rather, block rewards) do still give Bitcoin a high rate of inflation (annually ~2x that of the USD, currently - depending on which numbers you trust), but that impact is steadily decreasing, and will become very small at the next halving (when annual inflation will likely be less than the USD). The halving after that, BTC inflation will be negligible.

It has a huge effect on the price. saying mining doesn't affect the price is like saying that shorting doesn't affect a stock's price.

People still think difficulty & mining stuff actually has any substantial affect on the price..

Difficulty shooting up is the elastic in the catapult stretching.

it's going to snap, or to d' moon

It is currently rising at a speed of almost 1% per day, that is already insane

Compare this years growth in bitcoin price to the holdings in your 401K. Bitcoin is exploding far beyond the scale of other investments.

To be fair, the markup is meant to makeup up for the insane development costs associated with producing chips like that. I agree that they're likely to lower their prices, though, since we're already down to like 28nm. There's not much smaller we can go, so they won't have to pay any more development costs.

The way it used to work, difficulty (rather, hashrate) was generally determined by the price of coins. This is no longer true, because all of the powerful ASICs can only be obtained through preorders (or buying second-hand), so now you get to speculate a lot more. In the GPU days, when price was down and difficulty up, you just shut the GPUs down until the situation improved. Now, when that situation occurs, it's still profitable to run ASICs - just not as much, and it makes it that much more likely you won't see a RoI. For now, ASIC costs are almost entirely upfront (hardware), instead of recurring electricity costs. ASIC manufacturers are still charging markups in the (tens of?) thousands of percent, so they can just mark down their hardware a bit and the preorder volume will stay strong. Basically - no matter what happens, all those huge unbelievable numbers you see for 2014 difficulty projections are going to come true, because BTC price isn't a factor when ASIC manufacturers can just sell cheaper.

At the moment there is a additional reward for mining (using computing power to confirm transactions) for two reasons:
- to have a way to bring Bitcoins in circulation
- to increase the motivation to do mining (later on it will be financed by the transaction fees)

As the currency is supposed to have a limited supply this cannot go on forever.

Interesting..
Sorry for being NOOB, but why will BTC be half in 3 years time?

False, it does work that way. Atm nearly 5k coins are generated daily, because blocks are found way faster than they are supposed to be found.
Difficulty only adjusts after a certain amounts of blocks.
The reward halving will be earlier than december 2016, you will see.

It doesn't work that way. The number of new Bitcoins generated each day is roughly constant at 3600 until the reward drops by 50% in December 2016, 2020, 2024, etc.

All Bitcoin miners are thus in competition for a fixed resource.

I think you'll see a lot of momentum long before the next halving..

Forget about the halving, looks like I have to keep 3 years to really see a big increment. hm...