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Topic: Too many new coins, not enough new Bitcoiners - page 3. (Read 5476 times)

newbie
Activity: 56
Merit: 0
More people are leaving the market than are entering while the supply slowly inflates.  The price will keep relatively steady around the current number for a little while longer.  Then one day it will plunge in a selloff then fluctuate for a little while before stabilizing at a lower number.  Rinse and repeat until there are three bitcoiners left at $0.10 a coin, circlejerking each other about how "It's really starting to catch on!" while the constant hum of a white noise mining machine gnaws at the edge of their perception.  They justify the electricity cost by claiming that it's heating their homes during the winter, but deep down they know.  They Know
hero member
Activity: 868
Merit: 1008
That's very troubling sentiment... manipulating the money supply is precisely the reason fiat currencies are destined for failure. There is no legitimate reason to manipulate the price higher and higher. It may provide short term happiness to those holding coins, but it distorts the market signals that free-floating prices provide. Such manipulation would be the end of Bitcoin's value.

The movement of prices are not arbitrary. They allocate and coordinate how resources are utilized. If the supply rate of Bitcoins were restricted in order to assure a constantly rising price, you'd instantly create a speculative bubble, for every investor would buy as many coins as possible, knowing the price will be "managed" upward. The price would skyrocket - but to what end? Are Bitcoins worth $50 right now? Or $1,000?  None of us know. And when that bubble you produce pops, the devastation will be ruinous.

The ability of the price to fall is JUST AS important as the ability of it to rise. Tinker with it one way or the other, and you distort human behavior. If you think you're wise enough to distort it in a positive way, then you're suffering from the same affliction and hubris of all fiat central bankers - believing they are smart enough to know the "proper" market price of any asset. It is folly. And it's precisely because so many fall for the myths of central planning that Bitcoin is so necessary, and so valuable.

The day the money supply is tinkered with (including the derivative rate of such supply), I'm gone. I'll peace out like the Lorax.
+1 Well said Erik.  I don't understand why this is such a hard concept for some people to grasp.
hero member
Activity: 602
Merit: 502
The coin production will halve next year. Just relax and wait. Inflation will go away eventually...
legendary
Activity: 910
Merit: 1001
Revolutionizing Brokerage of Personal Data
Who decides when/how to change the block reward? The devs? Mt. Gox? The miners? The speculators? The "manipulator"?
No matter how you craft this system - you will always piss somebody off, resulting in a blockchain split, eventually ruining Bitcoin for all of us.

Bitcoin is a community contract - everybody knows the rules beforehand and everybody implicitly agrees to follow them. If they were different; allowing for some more or less arbitrary intervention at the core system of money generation then you'd deprive Bitcoin of one of its greatest advantages: the fact that nobody can really mess with it.

Monetary policy is a damn hard thing to get right - have a look at governments around the world to see how well they are doing with that. Your thoughts have some merit, but I think you hugely underestimate the greater consequences of breaching the Bitcoin contract.
legendary
Activity: 1008
Merit: 1023
Democracy is the original 51% attack
sr. member
Activity: 448
Merit: 251
Bitcoin
slothbag,

 I've been bitching about the inflation rate and printing off bitcoins at a rate that would even make the Federal Reserve squirm...  you'll be preaching to deaf ears..    people here won't listen to that type of logic.



And you've still never addressed the following - the money printing rate was the same (actually higher in percentage terms) when bitcoins were priced at $0.01 and at $30.  Of all the variables in the Bitcoin economy, the printing rate is NOT one of them. It's perfectly steady, yet you seem obsessed with attributing a declining market price on that aspect. It's as if you're inferring that Bitcoin has lost its way because we're now printing so much money   Roll Eyes  

If and when the price rises again, people will start complaining instead about bitcoin being "deflationary" - not printing fast enough. Price rising? "Bitcion will fail cause it's deflationary."  Price falling? "Bitcoin is doomed because we're printing so much money!"

While I love a skyrocketing price as much as anyone, for those who understand the true value of these coins, this falling price is a blessing. Be greedy when others are fearful (although I hate quoting the socialist, hypocritical Warren Buffett).

LOL!  I knew you would be the one to reply to this one Smiley

I did address it...  the printing money rate isn't the same as the adoption rate,  not even close.

picture this, because this is what is happening (i'm going to use simple figures rather than the real ones for simplicity sake).

-------
January - 5 bitcoins printed  -  10 people enter market each wanting 1 bitcoin  - price rises
February - 5 bitcoins printed - 11 people enter market each wanting 1 bitcoin - prices rise faster
March  - 5 bitcoins printed - 20 people enter market each wanting 1 bitcoin - prices skyrocket
April - 5 bitcoins printed - 4 people enter market wanting 1 bitcoin - prices tank
May - 5 bitcoins printed - 3 people enter market wanting 1 bitcoin - prices tank
Jun - 5 bitcoins printed - 2 people enter market wanting 1 bitcoin - prices tank.
------
July spot price -  5 dollars

If it was able to be adjusted

-----------------
January - 5 bitcoins printed  -  10 people enter market each wanting 1 bitcoin  - price rises
February - 5 bitcoins printed - 11 people enter market each wanting 1 bitcoin - prices rise faster
March  - 5 bitcoins printed - 20 people enter market each wanting 1 bitcoin - prices skyrocket
April - 1 bitcoin printed - 4 people enter market wanting 1 bitcoin - prices skyrocket
May - 5 bitcoins printed - 30 people enter market wanting 1 bitcoin - prices skyrocket
Jun - 5 bitcoins printed - 45 people enter market wanting 1 bitcoin - prices skyrocket
------------------
July spot price 50 dollars.


In the above,  by taking action for just one month (April)  and reducing the amount printed it changes the whole dynamics of it...  the end result would still be 21 million coins at the end,  just stabilize it to match demand and keep the asset price growing...  because when people see the price booming more start entering... hence increasing demand.

legendary
Activity: 1876
Merit: 1000

We are all owners of a screw driver with a PI symbol head convincing people to use PI shaped screws.
that is a Great analogy.


"computer, solve PI"  Wink


I am glad to see the price of btc's come down, gives me a chance to mine more as I entered a little late to the party.  

I do not think that the price will drop below the avg cost of electricity to mine them...  if it does..  well we can talk about that then.

legendary
Activity: 1008
Merit: 1023
Democracy is the original 51% attack
slothbag,

 I've been bitching about the inflation rate and printing off bitcoins at a rate that would even make the Federal Reserve squirm...  you'll be preaching to deaf ears..    people here won't listen to that type of logic.



And you've still never addressed the following - the money printing rate was the same (actually higher in percentage terms) when bitcoins were priced at $0.01 and at $30.  Of all the variables in the Bitcoin economy, the printing rate is NOT one of them. It's perfectly steady, yet you seem obsessed with attributing a declining market price on that aspect. It's as if you're inferring that Bitcoin has lost its way because we're now printing so much money   Roll Eyes  

If and when the price rises again, people will start complaining instead about bitcoin being "deflationary" - not printing fast enough. Price rising? "Bitcion will fail cause it's deflationary."  Price falling? "Bitcoin is doomed because we're printing so much money!"

While I love a skyrocketing price as much as anyone, for those who understand the true value of these coins, this falling price is a blessing. Be greedy when others are fearful (although I hate quoting the socialist, hypocritical Warren Buffett).
legendary
Activity: 1148
Merit: 1008
If you want to walk on water, get out of the boat
Well there will never be more than 21 millions of bitcoins, so where is the problem?
sr. member
Activity: 448
Merit: 251
Bitcoin
slothbag,

 I've been bitching about the inflation rate and printing off bitcoins at a rate that would even make the Federal Reserve squirm...  you'll be preaching to deaf ears..    people here won't listen to that type of logic.

hero member
Activity: 630
Merit: 500
Posts: 69
Interesting, I see the big picture as, security first, less economy and mining talk.
sr. member
Activity: 369
Merit: 250
Google trends is showing search interest in Bitcoins dropping back to pre $1usd levels, bitcoinstatus charts are showing a gradual decline in users running the bitcoin client.  New posts from the 3 main Bitcoin forums seems to be slowing down, at one stage it was difficult to keep up with one forum, now all three can have no new interesting posts in 24 hours.

Seems to me as the price drops lower and lower people are walking away from bitcoin, and some people are loosing interest.  All that remains are the true Bitcoin supporters that believe it has a future as a medium of exchange.

This is all fine and good with me, a high price is not that important and the get rich quick types can go find something else to play with.  But whats going to happen with the 7200btc per day, or $35,000usd of money entering the economy? Thats still $1m usd (at current prices) that needs to be absorbed per month.

I'm sure like most other longterm Bitcoin supporters, we've probably invested just about all we are willing to invest at this stage, so no new money there..

Let's say we get $1000-$5000 dollars PER DAY (roughly $30k-150k a month) from new Bitcoin enthusiasts who just found out about or decided to invest some cash.. that works out to about 1btc = 0.13-0.70usd.  Obviously some miners will hold onto their newly mined coins, so that estimate will be a little higher.

Still got room to fall? I think so.
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