Topic: price about to go UP - reason all the overpriced asics (Read 6090 times)

You assume everyone will hoard. This is purely an assumption.

Everyone has a price. Some people sold at $1, some at $10, some at $100. Some people will sell at $200, some at $500, some at $1000. Some will sell at $2000, $5000 and up. As the price rises, the probability and perception of "expotential gains" decreases. At some point it is perceived to be better to spend bitcoin to gain the things you desire now over hoarding it for potential % increases in the future.

It is a process.

However, your deflationary argument is valid. But bitcoin as a store of value has always had more potential than as a currency.

To assume it will become a "major" currency is far more of a reach than assuming it will become  a "major" store of wealth.

it's starting. look at the amount of miners complaining about their gear - it's exponentially going up.

Gresham's law would only apply if someone were artificially undervaluing bitcoin.

No one said there would be no spending. Just no spending of bitcoins. see http://en.wikipedia.org/wiki/Gresham's_law

It still amazes me that people over-sell the hoarding aspect of deflationary currencies. What you guys forget is that there's a difference between minimum spending and zero spending, and you consistently present an argument that doesn't take proper account of the difference between the two. ASIC miners are never going to be a neccesary big ticket purchase, but what about a car? Or the deposit for a home loan? Life insurance? Medical procedures? Emmigration fund? The hoard will take a backseat when it costs you a more important opportunity.

It still amazes me that most people involved in bitcoin are not cognizant of the ramifications of a deflationary currency. In a deflationary currency the best decision when deciding to purchase anything is usually to decline to make the purchase. That is because whatever you intend to purchase will cost less next week than it does today, the exact opposite of an inflationary currency. The best strategy is almost always to be a hoarder.

If one assumes adoption of bitcoins will continue to increase, then the need for coins for transactions will increase. This is a constant price pressure.

Miners are not generally idiots. They must know at an instinctive level that a coin mined today will be worth more tomorrow.  It costs nothing to sit on a wallet full of coins, in fact, it is generally profitable to do so. In most cases there is no pressure for them to sell when they see daily increases in BTC value. "Why sell at $160 today when it will probably be $200 next month?" They all ask themselves this question every single day. Rather than sell their coins for more mining gear, they are far more likely to scrape together more fiat for purchases and hoard their appreciating bitcoins. This is a rational path for a rational actor.

The cost of ASIC hardware in part will always be a component of defining the price of bitcoins. "How much must I spend on hardware today to get 1 btc over the life of the hardware?" This question has as much to do with the price of btc as the need for transaction coins does. The difficulty level increases as factories churn out ASICs by the thousands will ensure that the answer to that question is "More than yesterday".

If we continue on the current path, the days of getting any daily or weekly return, even from a pool will be numbered. ASIC miners will be more akin to a lottery ticket model. Maybe your pool finds a block this week. Maybe it doesn't. Maybe you get lucky and get a few satoshis. Probably though, you won't. People will still buy ASIC miners, each Ghs a ticket for a possible payoff. Some folks will only buy one ticket. Others will buy thousands. In this environment, a single bitcoin could be worth tens of thousands of dollars. So in the end, i think the discussion as to whether miners will hoard or spend their coins is a transitory question that in another year may not even matter. Because most miners, like most lottery players, will be receiving essentially nothing for their investments. The winners will not be the clever, but rather the lucky.

it is starting

That sounds interesting.Care to explain?

Bad news out of established financial world is worse. So it's a speculative price rise.

interesting, i guess bitfunder doesn't want to be deal with US regulation.

bitfunder create a lot of demand for bitcoin.

bad news all over yet prices continue to rise

wtf

are you kidding me? bitfunder has very little to do with bitcoin prices and more to do with company (mostly mining) valuations.
i doubt if people sold shares for cheap on bitfunder that has any correlation with them "cashing out" of bitcoins

most of the time people sell for cheap is because they think the next person will sell for even less and they can buy more.

anyways, price has actually went up since yesterday.

edit: btct closed down and had 0 effect on price and it was much bigger volume than bitfunder

Price is about to go down, due to bitfunder issue.

lots of people are cancelling and sellers are opting out of traditional reversible payment methods.
btc garden is here too
the monster rises

I don't put much faith in long term price or difficulty predictions, especially without visible rigor.  I am a long term supporter of cryptocurrency, but I have my long term holdings and I also spend btc on various goods and services.  Having a small stream of btc whenever I need heat seems like the best thing in the world when I'm cold.

you are looking to get about 3 btc from the 50ghs over it's life. 3btc at todays prices is about $400 usd. if you spent 19btc at $180  = $3420 is how much you spent in fiat and 19btc is how much you spent in bitcoins. the only way you can even reach ROI in fiat is if prices go up a lot. you are looking at btc/usd @$1000+ to get your money back. people would have been better off 'financially' not ordering or doing anything at all. don't worry pretty much all miners who ordered after may (and most bfl orders) are facing the same situation.

Depends on how you calculate ROI.  I spent 19 btc on 50 GH/s that should arrive in a week or two.  I will not ROI in BTC terms unless price craters and difficulty follows, but at the time, I was looking to reduce some direct price exposure.  Since I am completely unleveraged, I will likely ROI in USD terms if I am patient.  Electric costs are low, plus it is almost the time of year where heat is more valuable than electricity anyway.

Since bitcoins were at 180 for only 2/3 days.  I wonder what you could have ordered at the time.  I'm pretty sure that you will not reach ROI even at 180. Unless you care to share

Take out a legal equity line.. That's what I actually meant

cool!

I could have financed a rig at 3% per year with a credit card.  However, I paid for mine with bitcoins @ $180.

But nice try.