If mining becomes unprofitable I will indeed turn some of my equipment off. However, If everyone does this and the difficulty drops, I can just turn it back on!
I think a lot of persons would do this also. I believe we are reaching the point where the "arms race" is coming to an end. The risk to develop/design/plan/manufacture
new hardware is just not worth the return. Most of the big money in mining hardware has already been made. Maybe this downtrend is the hardware makers cashing out
some of their coins.
Topic: Explanation of why Bitcoin price is falling. (Read 1865 times)
We are going down because someone is trying hard to run miners out of business. This way they can obtain a bigger piece of the total hashrate. The longer they keep the price down the more miners that will turn off their machines and the more coins this entity will get. It's like wal mart coming in with their cheap prices trying to run all the neighborhood stores out of business to obtain the market share. How long they will be able to do this is not known.
I aggree with uInteresting theory, I haven't heard this one before. Certainly plausible.
We are going down because someone is trying hard to run miners out of business. This way they can obtain a bigger piece of the total hashrate. The longer they keep the price down the more miners that will turn off their machines and the more coins this entity will get. It's like wal mart coming in with their cheap prices trying to run all the neighborhood stores out of business to obtain the market share. How long they will be able to do this is not known.
I aggree with u 
I don't see why people think merchant adoption would cause the price to drop drastically, if someone with bitcoin wanted to buy something that wasn't for sale for bitcoin, they would just sell to a fiat currency and make the purchase. It's a weak argument imho to say merchant adoption is driving the downtrend, the cost of mining combined with the Gox aftermath is more so to blame.
False. I hold 10+ BTC and I only spend them when I can spend BTC. Otherwise I just use fiat. I do not convert BTC to fiat to make a purchase - that's done on the merchant's side
Yes, there are probably a lot of people like you, but 10 BTC is not an amount that can really contribute to this downtrend.
We are going down because someone is trying hard to run miners out of business. This way they can obtain a bigger piece of the total hashrate. The longer they keep the price down the more miners that will turn off their machines and the more coins this entity will get. It's like wal mart coming in with their cheap prices trying to run all the neighborhood stores out of business to obtain the market share. How long they will be able to do this is not known.
Yes this is something I have briefly worried about, especially if it is a central bank.
We are going down because someone is trying hard to run miners out of business. This way they can obtain a bigger piece of the total hashrate. The longer they keep the price down the more miners that will turn off their machines and the more coins this entity will get. It's like wal mart coming in with their cheap prices trying to run all the neighborhood stores out of business to obtain the market share. How long they will be able to do this is not known.
If I want to buy something, I will:
sell bitcoins and buy it with FIAT
or
Use bitcoins to buy it, and the merchant will convert bitcoins to FIAT.
What's the difference?
sell bitcoins and buy it with FIAT
or
Use bitcoins to buy it, and the merchant will convert bitcoins to FIAT.
What's the difference?
But remember that, in the vast majority of cases, your coins are converted to fiat currency on-the-fly, because fiat currency is what the merchant wants to receive. That is a sell order that pulls the value of Bitcoin down.
^^ This essentially is the real driver. Merchants are accepting Bitcoins through exchanges like coinbase. Rather than Bitcoins going directly to merchants, they're converted to fiat and the merchant is paid in fiat only.
It has been discussed in detail here:
https://bitcointalksearch.org/topic/merchants-that-accept-bitcoin-and-settle-in-usd-are-driving-the-price-down-407947
Price goes down because supply is greater than demand.
Demand is on a long term steady increase, supply varies based on how aggressively miners are selling.
Right now, we are in the aftermath of massive capital expenditure on mining gear, which people are desperately trying to get some ROI
Demand is on a long term steady increase, supply varies based on how aggressively miners are selling.
Right now, we are in the aftermath of massive capital expenditure on mining gear, which people are desperately trying to get some ROI
At the same time, too many merchants just converting their BTC to fiat. Its when the merchants start holding that we really start moving up, or when Paypal offers BTC —> USD services, buyer protection, etc then people will use it. I think a lot of people are too scared to use btc now
People using Bitcoin to buy actual goods is a good thing, but
1) Where is the data?
2) Why should the price go down unless the Bitcoins that are spent by people are being withdrawn for FIAT by the merchants as soon as they recieve them? Because it's what i've hear about Overstock. If this is what they are doing, the price is going to keep falling down, unless im getting somethong wrong.
1) Where is the data?
2) Why should the price go down unless the Bitcoins that are spent by people are being withdrawn for FIAT by the merchants as soon as they recieve them? Because it's what i've hear about Overstock. If this is what they are doing, the price is going to keep falling down, unless im getting somethong wrong.
Most commerces that accept BTC use Bitpay, including Paypal. And Bitpay dumps the coins as for money on exchanges.
Maybe if people could also get BTC for sales, the things would not be so bad
From the perspective of an economist, the argument prices drop as users transact in BTC is an argument about an increase in velocity.
From the perspective of most (Moore's Law), the value of BTC increases in proportion to the square of the number of users in the network.
Is it true that people buy things from Overstock or Dell and pay in BTC? Sure. And is it true that Overstock and Dell likely convert the vast majority of those purchases into fiat? Sure. But the notion that these purchases dramatically affect velocity is a MAJOR stretch.
I believe there are a lot of misconceptions about BTC velocity. I've read from many sources that the velocity of BTC is similar to that of the USD. In my opinion, those velocity calculations include things like mining transactions, which would be akin to including the printing press as a dollar transaction. BTC velocity is significantly lower than the USD and it will remain that way for quite some time. Besides, I'd suspect I'm not alone in that when I purchase in BTC, I re-purchase the BTC usually immediately, or close to it.
Bottom line is that the INCREASE in value that comes with adoption FAR outweighs the impact on value of a minor velocity uptick.
If you don't believe me, take either case to the extreme. Imagine BTC being everywhere. You can pay your electric bill, you can buy pizza, you can receive part of your paycheck in BTC. Compare that to, say, how BTC was two years ago. You can only buy it, hodl it, trade it all on dubious exchanges. In which case is BTC more valuable?
I'm getting pretty damn sick of the fallacious claim that adoption and use is the cause of the price decline. I've seen it frequently and it is plainly wrong.
From the perspective of most (Moore's Law), the value of BTC increases in proportion to the square of the number of users in the network.
Is it true that people buy things from Overstock or Dell and pay in BTC? Sure. And is it true that Overstock and Dell likely convert the vast majority of those purchases into fiat? Sure. But the notion that these purchases dramatically affect velocity is a MAJOR stretch.
I believe there are a lot of misconceptions about BTC velocity. I've read from many sources that the velocity of BTC is similar to that of the USD. In my opinion, those velocity calculations include things like mining transactions, which would be akin to including the printing press as a dollar transaction. BTC velocity is significantly lower than the USD and it will remain that way for quite some time. Besides, I'd suspect I'm not alone in that when I purchase in BTC, I re-purchase the BTC usually immediately, or close to it.
Bottom line is that the INCREASE in value that comes with adoption FAR outweighs the impact on value of a minor velocity uptick.
If you don't believe me, take either case to the extreme. Imagine BTC being everywhere. You can pay your electric bill, you can buy pizza, you can receive part of your paycheck in BTC. Compare that to, say, how BTC was two years ago. You can only buy it, hodl it, trade it all on dubious exchanges. In which case is BTC more valuable?
I'm getting pretty damn sick of the fallacious claim that adoption and use is the cause of the price decline. I've seen it frequently and it is plainly wrong.
Remember that there is no such thing as “intrinsic value.”
Quote
BTC and gold and fiat have no intrinsic value. Thats what make them good money. Silver, food and water have intrinsic value.
Intrinsic has to do with properties of the material, system etc.
Value is that what people give to it. Value can be determined by many factors of which usability or aesthetics are some.
So there IS a thing as "intrinsic value" it just depends on how you read it.
A person can give value to the intrinsic property (by desiring it).
The intrinsic property does not determine its value (it does not necessarily make it more desirable).
Remember that there is no such thing as “intrinsic value.”
Quote
BTC and gold and fiat have no intrinsic value. Thats what make them good money. Silver, food and water have intrinsic value.
I don't see why people think merchant adoption would cause the price to drop drastically, if someone with bitcoin wanted to buy something that wasn't for sale for bitcoin, they would just sell to a fiat currency and make the purchase. It's a weak argument imho to say merchant adoption is driving the downtrend, the cost of mining combined with the Gox aftermath is more so to blame.
False. I hold 10+ BTC and I only spend them when I can spend BTC. Otherwise I just use fiat. I do not convert BTC to fiat to make a purchase - that's done on the merchant's side
I don't see why people think merchant adoption would cause the price to drop drastically, if someone with bitcoin wanted to buy something that wasn't for sale for bitcoin, they would just sell to a fiat currency and make the purchase. It's a weak argument imho to say merchant adoption is driving the downtrend, the cost of mining combined with the Gox aftermath is more so to blame.
In the long term, higher adoption rates will lead to higher prices....
Its a simple market concept of demand and supply which determines the price,their are other macro factors too that determine the price of Bitcoin like government intervention or policy,inflation or deflation on dollar,etc.So only supply will not determined the price of btc
Price goes down because supply is greater than demand.
Demand is on a long term steady increase, supply varies based on how aggressively miners are selling.
Right now, we are in the aftermath of massive capital expenditure on mining gear, which people are desperately trying to get some ROI
Demand is on a long term steady increase, supply varies based on how aggressively miners are selling.
Right now, we are in the aftermath of massive capital expenditure on mining gear, which people are desperately trying to get some ROI
Alot of scared sheep dumping pluss anytime u buy with bitcoin at a store they automaicly dump it on the exchange unless the owner decides to hoard it.
People using Bitcoin to buy actual goods is a good thing, but
1) Where is the data?
2) Why should the price go down unless the Bitcoins that are spent by people are being withdrawn for FIAT by the merchants as soon as they recieve them? Because it's what i've hear about Overstock. If this is what they are doing, the price is going to keep falling down, unless im getting somethong wrong.
1) Where is the data?
2) Why should the price go down unless the Bitcoins that are spent by people are being withdrawn for FIAT by the merchants as soon as they recieve them? Because it's what i've hear about Overstock. If this is what they are doing, the price is going to keep falling down, unless im getting somethong wrong.
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