Topic: Is btc price sustainable with growing downward selling pressure of energy use? (Read 3794 times)

which mean, btc can rises to what ever price which its backer think reasonable.
i dont know why you think 4300 is a limit ?

i thought that limit is 50000 per btc

I'd approach the question from a slightly different angle.  It seems clear that BTC, while an interesting experiment, doesn't satisfy all the requirements for the role its advocates hope it could play in the financial system. And it is clear that stakeholders view the risks associated with significant changes to the protocol to enable new features as, well … risky. After another decade or so of experiments with other systems like ethereum we'll see bitcoin displaced by something much more interesting and capable.

Meanwhile, the price of bitcoin will continue to trend towards the cost of producing it, while there is demand for it ...

Ahh a bit paranoid.

  But his answer of no while 1 word  would be legit if it was his first post to the thread. not so sure. as I am a bit lazy to go back and look.  give me a minute.  Was his first Post to the thread so 'no'   would be a legit answer.
I have thought about this quite a bit  and I think no might be correct.
Yeah a do see a need for BTC.  But I am not sure demand  will be high enough.

3 big asic build self mining companies with 60% of the network have 0 incentive to grow hashrate.  They merely need   lower power costs every 9 months to 18 months time and maintain the same hash rate.  I think this forces price downwards. little by little.

 Unless a few speculators do a pump and pump and pump scheme.  Since all the coins in the world 14 mill = 3.3 bill usd.

Bill Gates  Warren Buffet  and an arab shiek or two could easily drive prices higher and higher and higher.. This factor  does not vanish until BTC is worth 600bill or so.   

 which is 4300 a coin  not sure if this happens. but you never know.

I was just not sure which one you didn't agree.   I will say... I'm sure your not my son .  And double sure I cannot be a mom.

But in future please quote what you don't agree it makes it much easier.  I was up like 5 from your post, so I just wanted to make sure you did not mean me.

yes mom /jk lol

i guess you need to look up about a quarter of an inch from my reply to see the OP's question.

No to what?  You don't point to which part you don't agree with.

I would be careful of posting one sentence posts.  Mods normally don't like it....

imho atm there are 10% inflation which mean if adoption rate is less than 10% then price will decline. After 2016, inflation rate are around 4% which is more likely to stabilize the price at least even if adoption rate is constant. then after another 4 years the inflation will be less than 2%. the problem is more likely that there are no miner left due to lack of incentive, but by that time all electronic could be attached with micro miner in it that way we can keep the security of bitcoin network.

 

The fact that the block reward is cut in half does nothing to the existing coins. Think of it as a reduction in the rate the dolar bill notes are printed. There are a wide variety of opinions (speculation) as to what will happen at the next halving. My understanding is that we have only had one previous halving, and it's difficult to draw any conclusions from that experience. I would argue that entire Bitcoin mining infrastructure is massively different than back in 2012, and any conclusions would be highly suspect. I also expect that there will be a great deal of "adjustment" that happens within farms and such as the time draws near. I have no idea how that will affect Bitcoin price though.

If the bitcoin is halved every 4 years, shouldnt we buying regadless then.

Due to limited supply, thats an instant value increase forming it as a commodity and can just worst case scenario represent a certain amount of gold. And have like a bank to utilized the units of supply instead of moving the physical gold around they assigned by units of bitcoin.

Of course, eventually they would have 1 sold bitcoin of some metrics table with higher bar counts to 1 bitcoin.

Solar, wind, hydro just is to expensive to start with.  I think people will chase cheap electricity vs something with high start up costs.

The big companies can chase cheap electricity where ever it is.   I predict this vs the solar/hydro/wind stuff.

While this may be a lofty idea, my thought process is that if Bitcoin gets exponentially more profitable for miners than miners will be able to lead the world in new technologies related to power generation.  We already have ASIC's on the 20nm scale and even smaller ones in the works for mining machines, so what if we focused on improving the tech behind generating power.

To that end, I think solar cells, wind, and hydro plants are just a natural progression for miners, as you could effectively mine twice, bitcoin and the power to generate it.

Also https://www.youtube.com/watch?v=qlTA3rnpgzU

I thought about this a little bit more.  There is no doubt that energy use is very important at this point. It's not so much a arms race of amount of hash, but amount of low cost hash.  Most big companies can follow the low cost electricity.

The big mining companies will NOT mine at a loss.   So this would bring a balance.  At a point where they are mining at a loss chances are they would shutdown after a time of losing money.  No company can lose money long term.

Yes I totally agree, but I am asking something a little different. I am not referring to the producing of the commodity (such as mining of gold out of the ground, or mining new bitcoins as in the reward for each new block).

I am referring to the simple act of allowing the existing mined coins to continue to exist. Gold can just exist, as it is. It's a physical object. Bitcoins cannot. Without continued use of (ever increasing quantities of) electricity, bitcoins do not exist (due to being digital in nature). Transactions must be continually be able to be put in blocks every 10 minutes or the bitcoins are worthless and for all intents and purposes don't "exist". Thus, there is a neverending "existence payment" (to coin a new term) in the form of electricity payments, just to have existing bitcoins continue to exist.

I find it a little challenging to put this concept into words, so I hope I am explaining it in an okay manner.

So the difference is you don't have to mine more gold to allow existing gold to continue to exist. If you stopped mining gold, the existing gold would still exist. But with bitcoin, you have to continually spend energy to mine, even if just to confirm transactions (not even talking about making new coins). There is a forced flow of money out of the bitcoin ecosystem to pay for energy, which puts constant downward pressure on the price. This is what has me concerned for a higher and higher hashrate network.

That all being said, bitcoin can of course do things no other money can. But I just wanted to focus on the costs of running the bitcoin network and the long-term effects that constant selling pressure has on the price of bitcoin.

Yeah this is what holds it back.  Okay you can hedge inflation vs the dollar or another currency.  You can now trade in the stock market .  It is a BTC backed stock.  So for smart money guys you made it accessible.  But when my wife says to me hey Phil  put a few BTC on my  iphone  or  android phone I am going to Target  they are running a BTC based sale >  then prices  for BTC will get better.

At least in my opinion.  And I have made a lot of bad guesses.  

My newest really bad guess was  why does anyone need an iPad the day it came out I predicted it would be a bust.  Too big and not enough  processing power.    After that truly poor guess I am less inclined to have an opinion in print on the net.

 

I think public perceptions is important aswell if we want acceptance by majority of people.  Things such as silk road, illegal uses that paid for by btc is bad for us normal users.  The news will pick up on btc and make it sound like a bad thing.

In the end btc is just like fiat money it is not good or bad, but it can be used for good or bad things.  But new places focus on btc's negative aspects most of the time when reporting.

Police and prisons exist for a variety of reason. Direct cash theft is probably small potato's compared to drugs, assault, and homicide. So far I have seen nothing to suggest that Bitcoin eliminates financial crimes in general. It will certainly change the nature of some, but we've seen Ponzi schemes operate just fine within the Bitcoin realm.

In terms of acceptance, right now Bitcoin is a "solution in search of a problem". I have yet to see a compelling reason to use Bitcoin instead of USD for anything so far (yes I am a USA resident). The very few times I've purchased something with BTC, it was mining related, and required by the Seller. Just my $.02 on Bitcoin acceptance.

Don't forget prisons and police as part of the cost.

I actually don't fear the power cost/difficulty = bust .

I do fear lack of demand due to public's perceptions of BTC = low price = bust out.

Best post I read on here today.

I don't have any numbers, but what are the annual “maintenance“ costs of the current fiat system in comparison? Probably not 9% like with bitcoin today, but definitely not zero either (banks, vaults, security systems, ATMs, personnel, printing bank notes, minting coins, credit card fraud, insurances etc.)? Sum it up and you will know how many more halvings until break even. Just a thought.

I think a great deal of the above discussion emanates from the differing views of Bitcoin. I, and expect many others, view Bitcoin as a commodity. The other major view is the one that Bitcoin seems to aspire to, is that of a currency. Most regular currencies are strictly that, they have no use value outside of a form of payment. Obviously in the past, precious metals were used as a form of currency. Today those all have become a commodity, and are acquired either for their usage (e.g. gold/silver for jewelry, dental fillings, etc), or as a store of value. Gold for example is held by many as a hedge against inflation, assuming it will go up in value with inflation. Those that hold gold though are completely exposed to any price swings that accompany holding a commodity. Just like when a person buys and then holds Bitcoin. Most other commodities I can think of are usage centric in nature. Pork, corn, oil, coal are generally expected to be consumed and rarely have any long term value.

What's really interesting about Bitcoin though, is that it has a "target" rate of production, and will self adjust to try and hit that target. That's unlike any other commodity of the past. Precious metals of all kinds have had their boom and bust cycles. But none of them had an intrinsic rate of production. Plant more acres, get more corn at the end of the summer. Drill more wells, produce (maybe) more oil over the year. We can also see when it will step down by half sometime in 2016 (aka the "halving"). We have seen the massive rise in difficulty as a result of huge investments in mining hardware and efficiency, but over the course of a month, we are producing about the same number of Bitcoins in April of 2015, as we did in April of 2014 and 2013. A huge "Bitcoin rush" akin to the "Gold rush" has produced no appreciable increase in the production of the commodity because of the built-in difficulty adjustments.

In terms of how Bitcoin is perceived in terms of value, it's anybodies guess. It seems like the usual laws of supply and demand apply. At the outset, mining was the biggest supplier, though that shrinks every month as the total amount of Bitcoin in "circulation" grows. The impact of mining will only shrink with time in terms of the total supply side.

In terms of demand though, I have no idea. My view is pretty myopic in terms of non-miner demand for Bitcoins. The obvious trading schemes are at work, but what is the intrinsic demand for Bitcoin? Is there a significant consumer demand for Bitcoin? Unless and until someone has a cogent theory on Bitcoin demand, we will all be at the mercy of whatever blows the Bitcoin price the way it does.

My premise for bitcoin price sustainability.  For a consumer.

Okay A simple example of a consumer purchase.

I purchased a wall oven with full install yesterday.

Went to Lowes. I used a cc to buy.

1100 price for oven Lowes had on sale for  890

I used a coupon 10% off so 801
Install is          200           

total cost = 1001

I get 2 % back on my cc = 20  so I drop to 981

I have 60 day price match +10%
I have 1 year warranty 2x for free.


I think I could buy a different wall oven from overstock.com with btc  and I did find one that would fit


 http://www.overstock.com/Home-Garden/HypoTheory-Stainless-24-inch-Electric-Wall-Oven/9269668/product.html?searchidx=1


So it is electric not gas costs a lot and is not worth 3600usd for my style of kitchen.

Thus btc for this purchase is not an option for me.
85% or more of my purchases are not worth using btc.

Now to really research I found this oven at www.rakuten.com

it would work

http://www.rakuten.com/prod/electrolux-frigidaire-fgb24l2ec-24-gas-wall-oven-with-lower-broiler/227959231.html


So I went to the site started up an order  and I am now stock on a spot where I have to click to pay but  I do not know how many btc to pay.

That  is a bit nerve wracking.  but I have to say if AMAZOM.COM and  RAKUTEN.COM  do this BTC it will gain more acceptance.

Still not as good for me as the Lowes deal but almost good enough to use btc