Mining Difficulty Dictates Price? | Bitcointalksearch.org

bumpk1nK

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Quote from: mp420 on December 12, 2013, 12:50:46 AM

Quote from: cp1 on December 12, 2013, 12:46:23 AM

As the price goes up more people want to mine it, so the difficulty goes up. The difficulty doesn't predict the price, it's the other way around.

This.

Price is dictated by the market (supply and demand). Mining does not affect either (much).

People buying mining equipment now without chance of return the investments at curent BTC price. So people will not want to sell , thus decreasing supply and increasing price

Notanon

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Once most of the coins that were mined cheaply a couple of years ago start to become scarce as more people start to hoard them (i.e. the Chinese and maybe Indians next), the price per coin will start to turn in favour of the miners. And as the difficulty gets much higher, then the miners themselves will be in a stronger position to influence an increase in price to offset their costs. It'll only be a matter of time.

theonewhowaskazu

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Hmm, I guess, more people mining right now means marginally more inflation now than expected, but less inflation sooner in the future, so that can potentially matter.

cp1

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Stop using branwallets

Quote from: laris2 on December 12, 2013, 01:48:30 AM

I wouldnt say so. More difficult is to mine, the less money a person gets. If one of the person is able to sell less at a perceived moment of time then it will cause shortage of supply, thus driving the price up, and vica versa.
Tho I think that the mining difficulty increase is usually delayed, when we relate it to the price fluctuations.

Maybe each person is getting less, but there's more people mining. The supply is always going to be 25 blocks / 10 minutes (even slightly faster because of the difficulty increase lag). (until it's 12.5 of course)

theonewhowaskazu

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Quote from: laris2 on December 12, 2013, 01:48:30 AM

Quote from: mp420 on December 12, 2013, 12:50:46 AM

Quote from: cp1 on December 12, 2013, 12:46:23 AM

As the price goes up more people want to mine it, so the difficulty goes up. The difficulty doesn't predict the price, it's the other way around.

This.

Price is dictated by the market (supply and demand). Mining does not affect either (much).

I wouldnt say so. More difficult is to mine, the less money a person gets. If one of the person is able to sell less at a perceived moment of time then it will cause shortage of supply, thus driving the price up, and vica versa.
Tho I think that the mining difficulty increase is usually delayed, when we relate it to the price fluctuations.

Only people aren't able to get less. In fact, they're able to get slightly more if difficulty is increasing quickly. It just takes a lot more work to get that same amnt.

laris2

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CryptoCurrency Evangelist

Quote from: mp420 on December 12, 2013, 12:50:46 AM

Quote from: cp1 on December 12, 2013, 12:46:23 AM

As the price goes up more people want to mine it, so the difficulty goes up. The difficulty doesn't predict the price, it's the other way around.

This.

Price is dictated by the market (supply and demand). Mining does not affect either (much).

I wouldnt say so. More difficult is to mine, the less money a person gets. If one of the person is able to sell less at a perceived moment of time then it will cause shortage of supply, thus driving the price up, and vica versa.
Tho I think that the mining difficulty increase is usually delayed, when we relate it to the price fluctuations.

theonewhowaskazu

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It might also be said that a high difficulty (at least, originally) inspired more "smart money" investments, i.e, those who actually understand the protocol, because they know that it keeps their money safer. At this point I think difficulty is so high as to make that effect marginal, though.

mp420

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Quote from: cp1 on December 12, 2013, 12:46:23 AM

As the price goes up more people want to mine it, so the difficulty goes up. The difficulty doesn't predict the price, it's the other way around.

This.

Price is dictated by the market (supply and demand). Mining does not affect either (much).

cp1

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Stop using branwallets

As the price goes up more people want to mine it, so the difficulty goes up. The difficulty doesn't predict the price, it's the other way around.

BTCINVESTOR

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Cryptographic money will be the bedrock in time.

Notice the interesting correlation between price in USD and bitcoin mining difficulty in millions. They are very similar. This could be a good metric for predicting the baseline price of bitcoin.

GriTBitS

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“A decentralized registry for unique assets”

Quote from: ?? on ??

Quote from: GriTBitS on December 10, 2013, 11:12:50 PM

its because miners control supply, why sell if you cant make ROI

Supply doesn't only include newly mined coins.

Yes fees and ppl that wanna take profits too. But also you have mom and pop that just bought their first coins or are looking to buy their first. Most ppl when they buy stock they never plan on selling it. And most mom and pop will treat this as a stock. Until they relize they can spend it. So I think that most new volume will come from new Highs or new Lows

bitcon

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cant wait for the next reward halving

GriTBitS

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“A decentralized registry for unique assets”

its because miners control supply, why sell if you cant make ROI

cp1

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Stop using branwallets

Actually the mining difficulty dictates pirates. As difficulty goes up, the number of pirates goes down.

Sitarow

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Quote from: xephyr on December 10, 2013, 04:23:34 PM

Quote from: Sitarow on December 10, 2013, 04:14:55 PM

Quote from: BTCINVESTOR on December 10, 2013, 04:12:45 PM

Is this just old news or something?

It boils down to what is a better investment. Buying and holding btc or buying hardware and mining them...

At the present price for hardware it seems that buying btc is the winner for now.

Edit: at least from the perspective of maximizing your BTC holdings.

So why the affiliate link for mining hardware in your signature?

Their are still viable options for hardware purchases.
I own a variety of ASIC hardware myself.

For those who wish to buy hardware I try to simplify things by giving them a breakdown and potential hardware vs network breakdown from all manufacturers that are shipping or have shipped.

https://docs.google.com/spreadsheet/ccc?key=0AmeuPljmUNHCdEpqX2RmMDFwemJyLURVUWFtZ3J3aGc&usp=sharing

Some people enjoy the hobby and wish to participate in securing the network and further decentralize the responsibility.

Eventually miners will be able to vote with their hardware as to what direction Bitcoin network protocol should follow with respects any hurtles that may present themselves down the road.

Third supporting well managed and successful companies will open the door to perhaps revolutionizing hardware development as we know it.

Example moving from 100% silicon wafers to silicon/carbon or 90% carbon solutions.

Beta-coiner1

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No one knows,but all have tried and wondered if there is a correlation.I think the very first would be when the rewards were halved to 25 many believe at the time it made BTC more rare hence a price increase,it is going to be interesting to see what happens when it reaches 12.5 in some years.

BTCINVESTOR

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Cryptographic money will be the bedrock in time.

Quote from: KFR on December 10, 2013, 04:25:04 PM

I think it's fair to say you're not the first person to have made this observation. I believe it's been discussed quite a bit actually.

Here's a pretty recent discussion on the topic, which I thought covered things quite neatly:

https://bitcointalksearch.org/topic/m.3831417

I appreciate pointing that out. Thank you!

KFR

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Per ardua ad luna

I think it's fair to say you're not the first person to have made this observation. I believe it's been discussed quite a bit actually.

Here's a pretty recent discussion on the topic, which I thought covered things quite neatly:

https://bitcointalksearch.org/topic/m.3831417

xephyr

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Quote from: Sitarow on December 10, 2013, 04:14:55 PM

Quote from: BTCINVESTOR on December 10, 2013, 04:12:45 PM

Is this just old news or something?

It boils down to what is a better investment. Buying and holding btc or buying hardware and mining them...

At the present price for hardware it seems that buying btc is the winner for now.

Edit: at least from the perspective of maximizing your BTC holdings.

So why the affiliate link for mining hardware in your signature?

Sitarow

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Quote from: BTCINVESTOR on December 10, 2013, 04:12:45 PM

Is this just old news or something?

It boils down to what is a better investment. Buying and holding btc or buying hardware and mining them...

At the present price for hardware it seems that buying btc is the winner for now.

Edit: at least from the perspective of maximizing your BTC holdings.

Topic: Mining Difficulty Dictates Price? (Read 4014 times)