Some FUD (Facts U Dislike) for y'all:
http://cointelegraph.com/news/113795/europe-caps-payment-fees-at-02-undermining-bitcoins-appeal
"Low fees" was already a weak pseudo-argument for bitcoin (considering POW, exchange fees, volatility, spread etc), now is even weaker.
Topic: Gold collapsing. Bitcoin UP. - page 443. (Read 2032286 times)
Imho there is no jump to be expected until next halving. Everything else happening is just noise.
I've never seen the halving-drives-bubbles argument fully explained. It seems to me that since we are talking about CCMF price jumps of at least tenfold, and the inflation rate is nowhere near that, then either most bitcoins are immovable or the halving isn't in fact that important.
For example, if we have an inflation rate of 10% per year but investment increases tenfold during the year, then we still get roughly a 9x increase in price. Now if half the coins are immovable, either because they are lost or because for some reason the holders refuse to cash any out, then the effective inflation rate looks more like 20%. If 3/4 of the coins are immobile, then 40%. And if investment only increases by say 4x per year, then I think that's only like a 2.5x price increase during the non-halving years. But 4x vs. 2.5x is still not that much of a difference.
If the halving does make a huge difference, I would have to conclude that it's because few bitcoins actually make it to market for whatever reason. Perhaps it's the Bitcoin Baron's Paradox: "After the first few million dollars, why cash out any more? Fiat currency is a downright dangerous place to park your money!" (It could get frozen, banks could fail, dollar could collapse, etc. Gold has jurisdictional risks. Bitcoin is the ideal place for savings, so even if the price rises there is no reason to cash out very much more.)
I believe the halfing will have strong impact and I think you answered your own question (why?) at least partly: a lot of coins are immobile.
You're looking at inflation rate. Let me offer another way to look at this:
(I'm assuming miners are selling 100% of mined coins for simplicity, the argument works with less)
3600 BTC are mined each day. At current market price that's $900,000 worth. These BTC are being bought every day by demand. Now this selling pressure halves and the demand stays the same. Surely what will happen is the price will rise. In case of constant demand of $900k/day it should rise to 500 USD/BTC (merely double). But neither supply nor demand stay constant in such a scenario: supply is likely to decrease, because miners get to hoard more and most importantly demand will rise. Yes, I know, economic theory says demand should drop with a higher price,... but that's forgetting human psychology and the hype a 100% price rise will cause. In other words: the halving (reduction of supply) itself is just the ignition, the real momentum comes from increase of demand.
It worked last time, I think the Q1 2013 rally was caused (or at least substantially contributed to) by the halfing.
Does this make sense at all or is it wishful thinking?
Demand should be expected to drop for two reasons:
1. If people expect the price to go up shortly before, at, or shortly after the halving then that is more reason to buy before and less reason to buy after. Demand induced by this effect will then remain low until close to the next halving.
2. Whether or not people expect the price to go up, if you are considering buying it is likely that liquidity to a buyer will decrease after the supply is cut in half (less miner selling) and you will face more slippage. So again it makes sense to buy before rather than after.
Both effects cause a pulling forward of demand, not unlike a temporary tax credit for say solar power.
1.Do new entrants to bitcoin buy because they understand concepts like halvings? No. They buy because there is positive price momentum.
2.liquidity on exchanges is somewhat irrelevent to mining supply.
1. Sure that's probably a factor. To the extent that people expect the halving to increase price they will greedily buy ahead of the halving, which then leeds to positive price momentum, again ahead of the halving, so demand pulled forward.
2. We just disagree on this. Mined coins either get sold on exchanges, held by miners (likely not so much at industrial scale), or sold off-exchange. If sold off-market they absorb demand that would otherwise compete for liquidity on exchange.
its all about the hoarding anyway:
http://nakamotoinstitute.org/mempool/end-the-fed-hoard-bitcoins/
https://bitcointalksearch.org/topic/feedback-patterns-in-the-bitcoin-economy-144911
http://nakamotoinstitute.org/mempool/end-the-fed-hoard-bitcoins/
https://bitcointalksearch.org/topic/feedback-patterns-in-the-bitcoin-economy-144911
1. Silly conclusion from that diagram. Rotate it 90 degree clockwise and all the sudden it is "all about" miner profitability.
2. That diagram is a train wreck. I don't even know where to start.
you disagree bitcoin is about people hoarding it - hence attaching value to it?
No I don't disagree that hoarding adds value (short term at least), just that "its all about hoarding" is a silly view of something that looks like a diagram of a complex system with feedback loops. Hoarding being at the top is arbitrary. The structure is the same (one arrow in, one out) if you put miner profitability at the top. I don't think it can be considered "all about" any of these.
I could pick apart the structure of the diagram all day long too. How someone thinks that the main factor that drives hoarding is user adoption is beyond me, for example. The original hand-written diagram on which it was based was better.
its all about the hoarding anyway:
http://nakamotoinstitute.org/mempool/end-the-fed-hoard-bitcoins/
https://bitcointalksearch.org/topic/feedback-patterns-in-the-bitcoin-economy-144911
http://nakamotoinstitute.org/mempool/end-the-fed-hoard-bitcoins/
https://bitcointalksearch.org/topic/feedback-patterns-in-the-bitcoin-economy-144911
1. Silly conclusion from that diagram. Rotate it 90 degree clockwise and all the sudden it is "all about" miner profitability.
2. That diagram is a train wreck. I don't even know where to start.
you disagree bitcoin is about people hoarding it - hence attaching value to it?
Imho there is no jump to be expected until next halving. Everything else happening is just noise.
I've never seen the halving-drives-bubbles argument fully explained. It seems to me that since we are talking about CCMF price jumps of at least tenfold, and the inflation rate is nowhere near that, then either most bitcoins are immovable or the halving isn't in fact that important.
For example, if we have an inflation rate of 10% per year but investment increases tenfold during the year, then we still get roughly a 9x increase in price. Now if half the coins are immovable, either because they are lost or because for some reason the holders refuse to cash any out, then the effective inflation rate looks more like 20%. If 3/4 of the coins are immobile, then 40%. And if investment only increases by say 4x per year, then I think that's only like a 2.5x price increase during the non-halving years. But 4x vs. 2.5x is still not that much of a difference.
If the halving does make a huge difference, I would have to conclude that it's because few bitcoins actually make it to market for whatever reason. Perhaps it's the Bitcoin Baron's Paradox: "After the first few million dollars, why cash out any more? Fiat currency is a downright dangerous place to park your money!" (It could get frozen, banks could fail, dollar could collapse, etc. Gold has jurisdictional risks. Bitcoin is the ideal place for savings, so even if the price rises there is no reason to cash out very much more.)
I believe the halfing will have strong impact and I think you answered your own question (why?) at least partly: a lot of coins are immobile.
You're looking at inflation rate. Let me offer another way to look at this:
(I'm assuming miners are selling 100% of mined coins for simplicity, the argument works with less)
3600 BTC are mined each day. At current market price that's $900,000 worth. These BTC are being bought every day by demand. Now this selling pressure halves and the demand stays the same. Surely what will happen is the price will rise. In case of constant demand of $900k/day it should rise to 500 USD/BTC (merely double). But neither supply nor demand stay constant in such a scenario: supply is likely to decrease, because miners get to hoard more and most importantly demand will rise. Yes, I know, economic theory says demand should drop with a higher price,... but that's forgetting human psychology and the hype a 100% price rise will cause. In other words: the halving (reduction of supply) itself is just the ignition, the real momentum comes from increase of demand.
It worked last time, I think the Q1 2013 rally was caused (or at least substantially contributed to) by the halfing.
Does this make sense at all or is it wishful thinking?
Demand should be expected to drop for two reasons:
1. If people expect the price to go up shortly before, at, or shortly after the halving then that is more reason to buy before and less reason to buy after. Demand induced by this effect will then remain low until close to the next halving.
2. Whether or not people expect the price to go up, if you are considering buying it is likely that liquidity to a buyer will decrease after the supply is cut in half (less miner selling) and you will face more slippage. So again it makes sense to buy before rather than after.
Both effects cause a pulling forward of demand, not unlike a temporary tax credit for say solar power.
1.Do new entrants to bitcoin buy because they understand concepts like halvings? No. They buy because there is positive price momentum.
2.liquidity on exchanges is somewhat irrelevent to mining supply.
my bit of contribution to this thread
Commodities all around the world: e.g. gold, iron, steel have been in a bear market for about 5-8 years now.
Commodities all around the world: e.g. gold, iron, steel have been in a bear market for about 5-8 years now.
In economic recession that makes sense. Gold's bear market is induced by central bankers.
Imho there is no jump to be expected until next halving. Everything else happening is just noise.
I've never seen the halving-drives-bubbles argument fully explained. It seems to me that since we are talking about CCMF price jumps of at least tenfold, and the inflation rate is nowhere near that, then either most bitcoins are immovable or the halving isn't in fact that important.
For example, if we have an inflation rate of 10% per year but investment increases tenfold during the year, then we still get roughly a 9x increase in price. Now if half the coins are immovable, either because they are lost or because for some reason the holders refuse to cash any out, then the effective inflation rate looks more like 20%. If 3/4 of the coins are immobile, then 40%. And if investment only increases by say 4x per year, then I think that's only like a 2.5x price increase during the non-halving years. But 4x vs. 2.5x is still not that much of a difference.
If the halving does make a huge difference, I would have to conclude that it's because few bitcoins actually make it to market for whatever reason. Perhaps it's the Bitcoin Baron's Paradox: "After the first few million dollars, why cash out any more? Fiat currency is a downright dangerous place to park your money!" (It could get frozen, banks could fail, dollar could collapse, etc. Gold has jurisdictional risks. Bitcoin is the ideal place for savings, so even if the price rises there is no reason to cash out very much more.)
I believe the halfing will have strong impact and I think you answered your own question (why?) at least partly: a lot of coins are immobile.
You're looking at inflation rate. Let me offer another way to look at this:
(I'm assuming miners are selling 100% of mined coins for simplicity, the argument works with less)
3600 BTC are mined each day. At current market price that's $900,000 worth. These BTC are being bought every day by demand. Now this selling pressure halves and the demand stays the same. Surely what will happen is the price will rise. In case of constant demand of $900k/day it should rise to 500 USD/BTC (merely double). But neither supply nor demand stay constant in such a scenario: supply is likely to decrease, because miners get to hoard more and most importantly demand will rise. Yes, I know, economic theory says demand should drop with a higher price,... but that's forgetting human psychology and the hype a 100% price rise will cause. In other words: the halving (reduction of supply) itself is just the ignition, the real momentum comes from increase of demand.
It worked last time, I think the Q1 2013 rally was caused (or at least substantially contributed to) by the halfing.
Does this make sense at all or is it wishful thinking?
Demand should be expected to drop for two reasons:
1. If people expect the price to go up shortly before, at, or shortly after the halving then that is more reason to buy before and less reason to buy after. Demand induced by this effect will then remain low until close to the next halving.
2. Whether or not people expect the price to go up, if you are considering buying it is likely that liquidity to a buyer will decrease after the supply is cut in half (less miner selling) and you will face more slippage. So again it makes sense to buy before rather than after.
Both effects cause a pulling forward of demand, not unlike a temporary tax credit for say solar power.
its all about the hoarding anyway:
http://nakamotoinstitute.org/mempool/end-the-fed-hoard-bitcoins/
https://bitcointalksearch.org/topic/feedback-patterns-in-the-bitcoin-economy-144911
http://nakamotoinstitute.org/mempool/end-the-fed-hoard-bitcoins/
https://bitcointalksearch.org/topic/feedback-patterns-in-the-bitcoin-economy-144911
1. Silly conclusion from that diagram. Rotate it 90 degree clockwise and all the sudden it is "all about" miner profitability.
2. That diagram is a train wreck. I don't even know where to start.
date=1427467580]
but that's forgetting human psychology and the hype a 100% price rise will cause. In other words: the halving (reduction of supply) itself is just the ignition, the real momentum comes fromincrease decrease of supply increase of demand.
but that's forgetting human psychology and the hype a 100% price rise will cause. In other words: the halving (reduction of supply) itself is just the ignition, the real momentum comes from
is what I meant to say.
corrected my post above.
my bit of contribution to this thread
Commodities all around the world: e.g. gold, iron, steel have been in a bear market for about 5-8 years now.
Commodities all around the world: e.g. gold, iron, steel have been in a bear market for about 5-8 years now.
hero member
Activity: 836
Merit: 1007
"How do you eat an elephant? One bit at a time..."
Imho there is no jump to be expected until next halving. Everything else happening is just noise.
I've never seen the halving-drives-bubbles argument fully explained. It seems to me that since we are talking about CCMF price jumps of at least tenfold, and the inflation rate is nowhere near that, then either most bitcoins are immovable or the halving isn't in fact that important.
For example, if we have an inflation rate of 10% per year but investment increases tenfold during the year, then we still get roughly a 9x increase in price. Now if half the coins are immovable, either because they are lost or because for some reason the holders refuse to cash any out, then the effective inflation rate looks more like 20%. If 3/4 of the coins are immobile, then 40%. And if investment only increases by say 4x per year, then I think that's only like a 2.5x price increase during the non-halving years. But 4x vs. 2.5x is still not that much of a difference.
If the halving does make a huge difference, I would have to conclude that it's because few bitcoins actually make it to market for whatever reason. Perhaps it's the Bitcoin Baron's Paradox: "After the first few million dollars, why cash out any more? Fiat currency is a downright dangerous place to park your money!" (It could get frozen, banks could fail, dollar could collapse, etc. Gold has jurisdictional risks. Bitcoin is the ideal place for savings, so even if the price rises there is no reason to cash out very much more.)
I believe the halfing will have strong impact and I think you answered your own question (why?) at least partly: a lot of coins are immobile.
You're looking at inflation rate. Let me offer another way to look at this:
(I'm assuming miners are selling 100% of mined coins for simplicity, the argument works with less)
3600 BTC are mined each day. At current market price that's $900,000 worth. These BTC are being bought every day by demand. Now this selling pressure halves and the demand stays the same. Surely what will happen is the price will rise. In case of constant demand of $900k/day it should rise to 500 USD/BTC (merely double). But neither supply nor demand stay constant in such a scenario: supply is likely to decrease, because miners get to hoard more and most importantly demand will rise. Yes, I know, economic theory says demand should drop with a higher price,... but that's forgetting human psychology and the hype a 100% price rise will cause. In other words: the halving (reduction of supply) itself is just the ignition, the real momentum comes from increase of supply.
It worked last time, I think the Q1 2013 rally was caused (or at least substantially contributed to) by the halfing.
Does this make sense at all or is it wishful thinking?
Well, the halving is public knowledge so I would argue that this knowledge is already priced into the market. Other factors will drive the ebb and flow in price. In other words: supply is increasing at a fixed and known rate; demand will continue to fluctuate.
EDIT: clarity.
full member
Activity: 660
Merit: 101
Colletrix - Bridging the Physical and Virtual Worl
Here's some thoughts about how long a long-term investor should expect to HODL, all fairly obvious.
I look at matters from the perspective of BTC buyers, excluding from consideration early individual miners. The possibility to mint your own money was an anomaly, never to be repeated, perhaps comparable only to striking easily extractable gold.
1. At present block height (~350k), BTC inflation rate is at about 10%/year. From standard monetary perspective this is untenably high. From the perspective of bitcoin, this is a necessary evil, as a condition for network effect to take hold is for the coin to be distributed as widely as possible, which requires high emission.
2. Long-term investors should thus expect to hold not just until the next halving (~block 420k, inflation < 5%, 2016), but the one after that (~block 630k, inflation < 3%, 2021). By then the block reward will be 6.25 BTC and total mining output 900 BTC/day.
3. The reward for early investors is to have had to wait for only one halving period for large returns (those who waited significantly less before cashing out big simply got lucky). Their risk was to lose all. By this point, that risk has diminished vastly, but expected waiting time for realizing large returns has increased accordingly.
4. At the time of the first halving, price did not immediately increase. With demand slowly rising, the slack in supply was initially met from early accumulators partially cashing out. But eventually price had to pick up. We should expect a similar dynamic next time around.
5. By the same basic supply/demand considerations, price would pick up faster if adoption rate increased. This is indeed expected: if things continue on track, the network effect will kick in and we will hit the high slope section of the adoption S-curve. However, I see no immediate reason to suppose that this will happen before that third halving (ca. 2021).
6. Thus HODLers who have yet to cash out may keep watching news/price daily to satisfy their addiction, but should plan on waiting around five years before expecting to reap large rewards (e.g., >10x their DCA).
I look at matters from the perspective of BTC buyers, excluding from consideration early individual miners. The possibility to mint your own money was an anomaly, never to be repeated, perhaps comparable only to striking easily extractable gold.
1. At present block height (~350k), BTC inflation rate is at about 10%/year. From standard monetary perspective this is untenably high. From the perspective of bitcoin, this is a necessary evil, as a condition for network effect to take hold is for the coin to be distributed as widely as possible, which requires high emission.
2. Long-term investors should thus expect to hold not just until the next halving (~block 420k, inflation < 5%, 2016), but the one after that (~block 630k, inflation < 3%, 2021). By then the block reward will be 6.25 BTC and total mining output 900 BTC/day.
3. The reward for early investors is to have had to wait for only one halving period for large returns (those who waited significantly less before cashing out big simply got lucky). Their risk was to lose all. By this point, that risk has diminished vastly, but expected waiting time for realizing large returns has increased accordingly.
4. At the time of the first halving, price did not immediately increase. With demand slowly rising, the slack in supply was initially met from early accumulators partially cashing out. But eventually price had to pick up. We should expect a similar dynamic next time around.
5. By the same basic supply/demand considerations, price would pick up faster if adoption rate increased. This is indeed expected: if things continue on track, the network effect will kick in and we will hit the high slope section of the adoption S-curve. However, I see no immediate reason to suppose that this will happen before that third halving (ca. 2021).
6. Thus HODLers who have yet to cash out may keep watching news/price daily to satisfy their addiction, but should plan on waiting around five years before expecting to reap large rewards (e.g., >10x their DCA).
LOL...
I haet ugaise. Srsly.
I haet ugaise. Srsly.
the Tomas dude is pretty hilarious tho. 
This is why we need decentralized autonomous organizations. I guess
no, we need boobies.
the Tomas dude is pretty hilarious tho.
This is why we need decentralized autonomous organizations. I guess
the Tomas dude is pretty hilarious tho.
This thread should have an index.
Anybody know around what page you all were discussing the topic of transaction fees increasing as coinbase rewards are decreasing?
Index:Anybody know around what page you all were discussing the topic of transaction fees increasing as coinbase rewards are decreasing?
Pages 1-100: Delusions
Pages 101-300: Fiat sucks
Pages 301-500: Gold sucks too
Pages 501-700: The State and bankers are evil, Bitcoin whales* will save the world
Pages 701-1119: Moar delusions
*:
http://www.deepdotweb.com/2015/03/27/breaking-sheep-marketplace-owner-arrested/
This thread should have an indexIbex.
Anybody know around what page you all were discussing the topic of transaction fees increasing as coinbase rewards decrease?
Anybody know around what page you all were discussing the topic of transaction fees increasing as coinbase rewards decrease?
the desperation is palpable. almost as bad as NJHJT:
The Bitcoin Blockchain Could Be Used to Spread Malware, INTERPOL Says
http://motherboard.vice.com/read/the-bitcoin-blockchain-could-be-used-to-spread-malware-interpol-says?utm_source=mbtwitter
The Bitcoin Blockchain Could Be Used to Spread Malware, INTERPOL Says
http://motherboard.vice.com/read/the-bitcoin-blockchain-could-be-used-to-spread-malware-interpol-says?utm_source=mbtwitter
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