Medium term forecast for US$ / BTC price.

dree12

legendary

Activity: 1246

Merit: 1077

Quote from: phelix on March 05, 2013, 02:32:14 AM

Quote from: dree12 on March 04, 2013, 06:05:32 PM

Quote from: phelix on March 04, 2013, 02:15:51 PM

Please note that did not happen with previous hashrate jumps. Now the impact is much less because of larger coinbase and lower reward.

Also in you diagram the most additional coins are generated right now. the price did not drop today.

Previous hashrate jumps were caused by price increases, not new technology. That said, I don't believe ASICs will drop the price any more than psychologically.

lol. I was not here myself back then but word is when GPUs came one person got more than half of all the blocks for weeks if not months.

That was mostly before any serious Bitcoin trading. We have no precedent to determine that this hashrate increase is the same as any other; for all we know, it is completely different.

phelix

legendary

Activity: 1708

Merit: 1020

Quote from: dree12 on March 04, 2013, 06:05:32 PM

Quote from: phelix on March 04, 2013, 02:15:51 PM

Please note that did not happen with previous hashrate jumps. Now the impact is much less because of larger coinbase and lower reward.

Also in you diagram the most additional coins are generated right now. the price did not drop today.

Previous hashrate jumps were caused by price increases, not new technology. That said, I don't believe ASICs will drop the price any more than psychologically.

lol. I was not here myself back then but word is when GPUs came one person got more than half of all the blocks for weeks if not months.

Quote

Remember that increased profits means inflation, so if miners do earn more money there will be more inflation. However, mining is such a small part of the economy (~2%) that this isn't likely to matter.

+1

would be interesting to look at all the past blocks and make a filtered chart of the coins found.

http://blockexplorer.com/q / nethash/2016 should be enough to do it.

dree12

legendary

Activity: 1246

Merit: 1077

Quote from: phelix on March 04, 2013, 02:15:51 PM

Please note that did not happen with previous hashrate jumps. Now the impact is much less because of larger coinbase and lower reward.

Also in you diagram the most additional coins are generated right now. the price did not drop today.

Previous hashrate jumps were caused by price increases, not new technology. That said, I don't believe ASICs will drop the price any more than psychologically.

Remember that increased profits means inflation, so if miners do earn more money there will be more inflation. However, mining is such a small part of the economy (~2%) that this isn't likely to matter.

xxjs

sr. member

Activity: 280

Merit: 250

So medium term is not short term, not long term, but you don't really want to tell us the beginning date and the end date of the medium term?

phelix

legendary

Activity: 1708

Merit: 1020

(log scale, ignore green curve)

Please note that did not happen with previous hashrate jumps. Now the impact is much less because of larger coinbase and lower reward.

Also in you diagram the most additional coins are generated right now. the price did not drop today.

organofcorti

donator

Activity: 2058

Merit: 1007

Poor impulse control.

Quote from: cedivad on March 04, 2013, 04:45:45 AM

Quote from: organofcorti on March 04, 2013, 04:40:07 AM

Do you not think that the mechanism by which btc become available has an effect the price?

Also, the worst case scenario is not 144 surplus coins per day. Depending on the amount of hashrate added it could be more than that.

I think it has, but not at the level you are predicting. What are 100 or 1000 bitcoins on sale on a market that is at least one order of magnitude bigger, and sometimes 2?

On one day, probably not much. But consistently every day? If they are not purchased, then the surplus will build up quickly.

Besides that though, right now I don't think it will have a negative effect on the market, for the reasons outlined a few posts above.

cedivad

legendary

Activity: 1176

Merit: 1001

Quote from: organofcorti on March 04, 2013, 04:40:07 AM

Do you not think that the mechanism by which btc become available has an effect the price?

Also, the worst case scenario is not 144 surplus coins per day. Depending on the amount of hashrate added it could be more than that.

I think it has, but not at the level you are predicting. What are 100 or 1000 bitcoins on sale on a market that is at least one order of magnitude bigger, and sometimes 2?

organofcorti

donator

Activity: 2058

Merit: 1007

Poor impulse control.

Quote from: cedivad on March 04, 2013, 04:31:14 AM

So an increase of 3600BTC/day worst case of available coins, not on sale coins, on a market that does at least 36kBTC every day, should do something?

I think you misread the OP.

I was assuming in the OP that the excess coins would be on sale. A continual surplus and large hashrate miners selling coins in order to pay fiat debt could have a significant effect on the market.

Holliday's point was that, some miners will want to replenish their previous BTC holdings. I extrapolated from that comment that the 3.2 Thps per day added to the network would cost a considerable daily sum, and if a significant proportion of that is paid using bitcoin then this could reduce or negate the effect of the surplus.

Do you not think that the mechanism by which btc become available has an effect the price?

Also, the worst case scenario is not 144 blocks of surplus coins per day. Depending on the amount of hashrate added it could be more than that.

cedivad

legendary

Activity: 1176

Merit: 1001

So an increase of 3600BTC/day worst case of available coins, not on sale coins, on a market that does at least 36kBTC every day, should do something?

piramida

legendary

Activity: 1176

Merit: 1010

Borsche

So people who invested half a year ago in a very risky hardware that has only one purpose, at a point where 1 btc was worth 10$, did so on their last lunch money, waited half a year patiently and now they desperately need the cash back because they don't believe in this project? yes, extremely plausible...

Global BTC

hero member

Activity: 529

Merit: 500

Quote from: Dargo on March 03, 2013, 09:25:09 PM

I'm shocked, a drop prediction that is actually based on something that makes sense. I'll just mine and hold with my ASICs, but I'm also small-time with only $2K invested. Bigger players might sell as they mine since it would be riskier to hold. So I think this idea has some plausibility - will be interesting to see if this does have an impact.

That's an interesting point - not all newly mined coins go into the market. Are ASIC miners more or less likely to hold on to their mined coins than FPGA miners or GPU miners? ASIC miners have made a larger investment. Maybe they need their money back? This would suggest they should also be less likely to hold on to their coins.

Dargo

legendary

Activity: 1820

Merit: 1000

Quote from: organofcorti on March 04, 2013, 02:41:51 AM

Quote from: Bowjob on March 03, 2013, 11:01:57 PM

^ Wouldn't Mt.Gox switching to coinlab impact anything?

Maybe, but I have no idea how to account for it.

Quote from: ?? on ??

How many miners are also holders who traded off a large portion of their holdings, which now needs replenished, in an attempt to be an ASIC early adopter? Wink

I think you're on to something there. The model I use assumes a constant 3.2 Thps added per day; if only half of that is purchased using bitcoin that's ~ $30000 demand per day for bitcoin. That could easily soak up the excess.

I'll have a think about it and post an update later. Well spotted, Holliday.

Yes, good point by Holliday. If I had purchased a few BFL SC rigs with BTC early in the pre-order, I would be pissed as hell about unloading all those BTC, which are now worth over 5x what they were when I spent them. So I might not be looking to part with those new mined coins right away. Personally, I spent about 50 BTCs for two Jalapenos (later converted to a half-single order by paying the difference with Paypal), and it's bad enough to think that those BTCs now worth over $1700 USD. In terms of current BTC price, the half-single is effectively costing me over $2000 USD vs $1300 for the full single paid by bank wire, lol. Just glad I didn't use BTC for the whole purchase, which I was considering at the time.

organofcorti

donator

Activity: 2058

Merit: 1007

Poor impulse control.

Quote from: Bowjob on March 03, 2013, 11:01:57 PM

^ Wouldn't Mt.Gox switching to coinlab impact anything?

Maybe, but I have no idea how to account for it.

Quote from: ?? on ??

How many miners are also holders who traded off a large portion of their holdings, which now needs replenished, in an attempt to be an ASIC early adopter? Wink

I think you're on to something there. The model I use assumes a constant 3.2 Thps added per day; if only half of that is purchased using bitcoin that's ~ $30000 demand per day for bitcoin. That could easily soak up the excess.

I'll have a think about it and post an update later. Well spotted, Holliday.

Bowjob

sr. member

Activity: 294

Merit: 250

^ Wouldn't Mt.Gox switching to coinlab impact anything?

organofcorti

donator

Activity: 2058

Merit: 1007

Poor impulse control.

Quote from: Dargo on March 03, 2013, 09:25:09 PM

I'm shocked, a drop prediction that is actually based on something that makes sense.

Yes, not actually being able to provide an estimate of the loss and the exact timeframe is a bit of a giveaway, eh? Wink

Quote from: Dargo on March 03, 2013, 09:25:09 PM

I'll just mine and hold with my ASICs, but I'm also small-time with only $2K invested. Bigger players might sell as they mine since it would be riskier to hold.

This is what I think will happen for the mojority of miners. But the majority of miners will contribute a minority of the network hashrate and earn a minority of the coins.

The small number of large hashrate miners will contribute a majority of the network hashrate and would have more significant effect, and as you mention they're the ones who will be more risk averse.

Quote from: Dargo on March 03, 2013, 09:25:09 PM

So I think this idea has some plausibility - will be interesting to see if this does have an impact.

Yes, hard to say. If something happens to massively increase the general usage of btc, the increased miner-side supply could be much less significant.

Dargo

legendary

Activity: 1820

Merit: 1000

I'm shocked, a drop prediction that is actually based on something that makes sense. I'll just mine and hold with my ASICs, but I'm also small-time with only $2K invested. Bigger players might sell as they mine since it would be riskier to hold. So I think this idea has some plausibility - will be interesting to see if this does have an impact.

organofcorti

donator

Activity: 2058

Merit: 1007

Poor impulse control.

Quote from: dree12 on March 03, 2013, 08:22:10 PM

Quote from: organofcorti on March 03, 2013, 08:20:20 PM

Quote from: 01BTC10 on March 03, 2013, 08:15:41 PM

Quote from: organofcorti on March 03, 2013, 08:06:43 PM

Quote from: 01BTC10 on March 03, 2013, 08:06:14 PM

There will be no increase in blocks solved.

Yes, there will.

Quote

Bitcoins are created each time a user discovers a new block. The rate of block creation is approximately constant over time: 6 per hour.

https://en.bitcoin.it/wiki/Controlled_supply

Maybe after 4 days of winter skiing/camping and some wine I'm a bit slow. I thought supply should remain the same even if hashrate is growing.

No, but it is a little tricky.Point 1 covers it:

Quote from: organofcorti on March 03, 2013, 08:02:19 PM

1. When a constant increase in network hashrate occurs, difficulty retargets cannot completely negate the increased number of blocks solved.

This is because difficulty is calculated using the average hashrate since last retarget, so while the network hashrate constantly increases, the difficulty calculated at each retarget will not be sufficiently large. It will always be behind until either the added hashrate slows or the increase in hashrate as a percentage is negligable.

In addition, if hashrate more than quadruples, even the retarget will not be enough to slow blockrate.

I don't think it would be a big problem for very long. If the hashrate (eg) increases sevenfold, then the the next retarget would be two days later. If that rate continued there would be seven retargets in two weeks.

dree12

legendary

Activity: 1246

Merit: 1077

Quote from: organofcorti on March 03, 2013, 08:20:20 PM

Quote from: 01BTC10 on March 03, 2013, 08:15:41 PM

Quote from: organofcorti on March 03, 2013, 08:06:43 PM

Quote from: 01BTC10 on March 03, 2013, 08:06:14 PM

There will be no increase in blocks solved.

Yes, there will.

Quote

Bitcoins are created each time a user discovers a new block. The rate of block creation is approximately constant over time: 6 per hour.

https://en.bitcoin.it/wiki/Controlled_supply

Maybe after 4 days of winter skiing/camping and some wine I'm a bit slow. I thought supply should remain the same even if hashrate is growing.

No, but it is a little tricky.Point 1 covers it:

Quote from: organofcorti on March 03, 2013, 08:02:19 PM

1. When a constant increase in network hashrate occurs, difficulty retargets cannot completely negate the increased number of blocks solved.

This is because difficulty is calculated using the average hashrate since last retarget, so while the network hashrate constantly increases, the difficulty calculated at each retarget will not be sufficiently large. It will always be behind until either the added hashrate slows or the increase in hashrate as a percentage is negligable.

In addition, if hashrate more than quadruples, even the retarget will not be enough to slow blockrate.

organofcorti

donator

Activity: 2058

Merit: 1007

Poor impulse control.

Quote from: 01BTC10 on March 03, 2013, 08:15:41 PM

Quote from: organofcorti on March 03, 2013, 08:06:43 PM

Quote from: 01BTC10 on March 03, 2013, 08:06:14 PM

There will be no increase in blocks solved.

Yes, there will.

Quote

Bitcoins are created each time a user discovers a new block. The rate of block creation is approximately constant over time: 6 per hour.

https://en.bitcoin.it/wiki/Controlled_supply

Maybe after 4 days of winter skiing/camping and some wine I'm a bit slow. I thought supply should remain the same even if hashrate is growing.

No, but it is a little tricky.Point 1 covers it:

Quote from: organofcorti on March 03, 2013, 08:02:19 PM

1. When a constant increase in network hashrate occurs, difficulty retargets cannot completely negate the increased number of blocks solved.

This is because difficulty is calculated using the average hashrate since last retarget, so while the network hashrate constantly increases, the difficulty calculated at each retarget will not be sufficiently large. It will always be behind until either the added hashrate slows or the increase in hashrate as a percentage is negligable.

01BTC10

vip

Activity: 756

Merit: 503

Quote from: organofcorti on March 03, 2013, 08:06:43 PM

Quote from: 01BTC10 on March 03, 2013, 08:06:14 PM

There will be no increase in blocks solved.

Yes, there will.

Quote

Bitcoins are created each time a user discovers a new block. The rate of block creation is approximately constant over time: 6 per hour.

https://en.bitcoin.it/wiki/Controlled_supply

Maybe after 4 days of winter skiing/camping and some wine I'm a bit slow. I thought supply should remain the same even if hashrate is growing.

Topic: Medium term forecast for US$ / BTC price. (Read 2419 times)