Topic: More difficulty = higher BTC price is an urban legend (Read 6007 times)

Except that I got my first computer 6 months before I learned how to drive -- which was in 1992 (before many of you guys were born!)

I started a forum because this one seemed to be complaining about the number of members/posts, plus Bitcoin.org was *very* slow until about 1 week ago.

But flame away, you seem to have a psychological need for it.
I guess it bolsters your insecure, young ego to rip on people. It's classic 2nd grade behavior: "cut others down to make myself feel bigger".

He's got his own soap box message board now, where he can post all he wants and reply to his own thread over and over again.  Vanity, some people like to look in the mirror, others like to create their own message board to admire themselves

Holy shit..  another sky is falling Angelus post..

Angelus is just one of those kids that likes to feel important by making hundreds of threads for their alterior motives and sky is falling posts because he likes to read his own text on the screen..

It consumed 450w (pretty efficient), so about 10.8kWh per day.  At 25c/kWh that's $2.70.  It generated around 0.5BTC per day (15% less after today's difficulty increase too) so $6.25 per day.  I have to use BitPiggy to withdraw funds as there's really no other way to do it in Australia.  They slice around 15% off BTC's price (the weak US dollar impacts here too) and often don't have funds available.  So let's say $5.30 income per day. 

$2.60 profit seems pretty good, but remove income tax from that too.  Now it's $1.95.  $700 of hardware churning away to produce $1.95.  Still a profit, but not exactly stellar.  $1.65 after today's difficulty increase. 

The final complication in the calculation is that power here is tiered.  The more you use the more additional kilowatts cost.  Having one PC burning through 300kWh per month puts my bill into a higher bracket for each additional kilowatt, so I would be paying around 27c/kWh to power other appliances.  Cooling costs haven't been factored in as the waste heat (nicely warms up a room) isn't a problem right now due to the season.  Come summer time however and that $1.65 profit per day would be lower still.

no price is guaranteed...regardless of difficulty the supply is constant.. existing bitcoins + 50 BTC/10mins
demand is what changes.. what we need is another news article to snag a few greater fools
or heaven forbid novel concept... a USE FOR BITCOINS outside drugs + child porn.  LOL.  Many folders@home went from curing cancer to supporting the drug trade... funny what paying a couple nickles does to one's lofty morals..

but for now im going to buy a pair of alpaca socks which say 'i spent 10,000$ in mining hardware and all i got to show for it are these alpaca socks'
If it weren't for bitcoins would alpaca and 'goxed' be in the common vernacular?  Shall we say greece's drakhma has become alpaca'd?  ie a phrase to indicate that something intended for broad scope/use has a limited almost comical actual use?  Like I bought that soloflex and at first i used it every day but now its being used to prop up the plastic christmas tree -  it has been alpaca'd?  I dont know help me out here guys..

ok so i lost a few g's but me and my biz partner just shrug our shoulders and go 'lunch money'

then roll the dice again on a new scheme..... I hear peru's got a nice foreign investment program in a few alpaca farms...

if u cant beat em..

What is your next unbelievable target? Will you shit your pants at $9.75 ? And at $5 will you realize you wasted all this time and money buying GPUs and for what ? While preaching to the masses that mining isn't profitable any more. At least you will be able to start new threads "I told you so..."

You cry at nights?

I can't believe BTC is selling in the $11's now.

Not exactly legal to not claim income, but I doubt the IRS will catch on.

That rig probably takes like .6kw/hr. Even with BTC at $10, you'd easily be turning a profit after electricity unless you're paying over $.3/kwh.

maybe you didn't do your maths.

A whole bunch of people have just discovered they won't get rich by doing nothing while their PCs consume vast quantities of electricity.  That's a powerful incentive to mine less, which in turn will lower the price as people who already have bitcoins and are ready to give up will dump what they have left.

I turned off two 6950s today.  At the current price (and with the weak US dollar) I was breaking even on costs.  If the price falls to $11 then I'd definately be making a loss on every bitcoin generated.  There are many people (mainly in the USA) who get very cheap electricity and apparently pay no tax on income, so they're happy to mine even if the price hits single digits.

Well, now it's in the $12's.

Looks like the right shoulder of a head-and-shoulders to me.

Like I said, it's not just the charts that are scary. The fundamentals (over 100,000 BTC produced in 11 days; most of which need to be bought by someone) show a lot of downside potential as well.

I don't feel the same hype vibe that I felt a month ago; I feel like BTC growth/hype has reached a plateau, if not started to decrease. (Now that's very subjective, so I can't put that forward like it's fact or anything -- just my own vague, intuitive, personal feeling after keeping up with this board for some time)

And just look at the chart -- it's a slow, measured, steady decrease. Not some flash-crash coming from a guy selling 200,000 BTC. This is the organic market finding a new price for BTC.  

Unfortunately, I liked the OLD price a whole lot better, thank you very much!

Unfortunately, one cannot observe gap patterns if the market never closes.  The daily price charts from Mt Gox for example, arbitrarily choose a market open time point. Gap patterns reflect dramatic changes in trader sentiment during the period that the market is closed.  Other technical indicators that track momentum do not have this problem, e.g. moving averages.
 

Hi Ryan,

For those who do not know about the famous Head and Shoulders technical analysis chart pattern, here is the Wikipedia description: http://en.wikipedia.org/wiki/Head_and_shoulders_(chart_pattern)

In contrast to your analysis, I believe that we are on the right shoulder and that is strongly negative, should that pattern be completed.

I tried telling a few friends and family members about bitcoin.  All had the same two comments: Why does it have any value?  And... It sounds like a scam/pyramid scheme/etc.  I gave up.


Referring to people as sheep isn't likely to win you any friends.  The number one problem with bitcoin is that there is so little that one can purchase with it.  Apart from Silk Road, there doesn't seem to be a compelling reason to use bitcoins.  The only other group of people happy so far are the tax avoiders and money launderers.  I'm just waiting for the first media article stating pedophiles are using bitcoin to trade material.  Any day now.

There's (at least) two ways to change this assertion in order to make it true (instead of false, which it is):

• 1.) higher difficulty => lower price
• 2.) higher price => higher difficulty

1.) is easy to argue: difficulty rises when people freshly investd in mining hardware. They want to recover their investment so they put the bitcoins on the market => higher supply => less value

2.) is also pretty clear: a high price creates incentive to mine and makes mining more profitable => people invest in mining hardware => difficulty rises

I never understood how higher difficulty would drive the price up.

Completely agree!

There is not much really to discuss here. Supply is a lot bigger than demand right now, and that's the simple explanation why price is going down.

If you look at the chart since May you will notice that before the boom/bubble started we were basically at $10. This is pretty much where we are going now. I'm not saying we will drop $14 tomorrow and be at $10 by the end of the week. What I'm saying is that since there isn't any real fundamentals behind bitcoin and the fact that we had a first boom cycle,  price needs to ultimately correct itself, based on the fact that there isn't any new development for the real use of the coins right now. Demand for a fresh coins can't keep up with a constant supply and as a result price is adjusting. Until there's any news or a significant influx of new bitcoin  buyers willing to throw a total of few million $us at the market, price can't really start a new real uptrend.

Will anything change if we hit $10? Probably not, but we will see, if we ever get there. People need to realize that 2016 blocks at 50 BTC makes 100.800 BTC which at the moment translates into a demand for $1.411.200 of fresh hardcore cash every 2 weeks. Doesn't sound that much, but the fact that you can only use it on silkroad or buy alpaca socks with it, makes that $1.4mill a bit hard to find. Yes yes, I have seen all new services accepting bitcoins, but give me a break. Bitcoins needs time and legitimate people offering good deals, while people behind the project needs to make it a lot more user friendly.

All this daily or week to week analysis and/or constant posting it just shows that too many people were caught in a hype and that's a reason we had a bubble.