Topic: Vast expansion of BTC utility/reputation - but no rise in BTC price? Why? (Read 5545 times)

zerk has it backwards, for most of the big run up in exchange rates the miners were holding and counting their paper-gains, when they lose profitability it will force them to START selling their newly produced coins to pay ongoing operating costs.  Coin flows into exchanges will rise not fall and exchange rates will fall not rise.  This is what happened the last time miners over-invested in the GPU era, and realized they couldn't meet ROI or even cover operating costs.

I like the dev team, and I liked the coin's design, so I bought a few back when they were still new. Now, I think they are getting lost in the sea of altcoins and just don't have enough going for them to make it long term.

No it really doesn't. Someone did actual math on this. I don't have a link to the post but its here if someone wants to find it.

The causality runs in the other direction (i.e. difficulty follows price), although it isn't terribly strong in that direction either. There are lots of other factors influencing both.

Bingo! +1

Price follows difficulty. Worry about the price when you start seeing less mining and lower difficulty (like feathercoin  )

It would be.

I guess you are right.

And these factors haven't even really come into play yet with the masses.

Well if I was a veteran living in my villa paid thanks to BTC, with a Ferrari in the garage, and enough fiat to ride the next couple of years with my remaining BTCs, I would be calm too !

I have almost no BTC and only invested into computer hardware I'm confident I can use differently or sell (IT guy) so I'm calm, for other reasons. I HODL my 1 BTC.

Correction:  When you sell, it's all paper profits.

In Reply to Dr Bloggood:

There is a global tightening of capital flows going on reminiscent of what was happening exactly 100 years ago. Capital controls, reporting requirements, etc.

Bank secrecy (at least for US citizens) is a distant memory as they live under the omniscient Eye R.S. and the FATCA that has made US citizens lepers in the world financial markets since the reporting requirements make every bank in the world a deputy of the Eye R.S. regarding US citizens ... All of those factors plus the fact that the Euro still looks like a badly constructed accord plus the instability in South America.... Etc... those are the background datapoints that make criptocoins enticing... Yes, every financial/monetary shock (and they are coming) will push more people towards criptos: not because they love them but because people with some wealth and not part of THE CLUB will try anything to salvage their $$$.

Even at that, its going to be a while.  Two more years just for the next reward halving, and 12.5 BTC is nothing to sneeze at. And four more years each time thereafter. We should be pretty safe for the next decade or two.

Many of the altcoins with their ridiculous instamine schedules are in much worse shape.

Might not have to take all of them, actually. I should have said instead "once enough bitcoins are mined out to make further mining too troublesome for most existing miners".

In 2140?

The real sector of the Bitcoin economy (use of bitcoins to pay for goods and services) remains very small. The prevalent part is speculative trading and holding. Besides Bitcoin potentially becoming obsolete in the future due to further technological progress, it poses another major risk: once all bitcoins are mined out and Bitcoin is still far from the mainstream, the speculators might start liquidating their holdings which will lead to its immense value drop. The suit will then be followed by companies and individuals accepting it as means of payment for their goods and services (who would like to find their revenue halved over a short time in the USD equivalent?), bringing the final Bitcoin value to zero. Unlike with gold, the only value of Bitcoin is in its usage as means of exchange; if no longer used that way, it will have no value whatsoever.

Right now, there's no proper modern payment infrastructure in place to trade goods and services in bitcoins. Very few rudimentary Bitcoin POS-terminals offline, the use in online commerce is hindered by the irreversible payments and a high risk of fraud thereof, unreliable amateurish exchanges (even the major ones) etc.

What can secure Bitcoin a future is an utter collapse of major fiat alternatives - a global-scale economic disaster. Will it happen in our lifetime though? I wouldn't be so sure.

You are right.  Let me reformulate.  We can see a couple of thousands BTC siting in the order books of various exchanges.  So, somebody is at least trying to sell.

No we don't.  We don't know if that was just the same 100 coins that were sold 100x each.  You need to factor in "Bitcoin days destroyed"

It's the calm before the storm

we just had a big rise, and probably got ahead of ourselves. Now we've got to wait until people are used to thinking ~$800 is a reasonable price.

Production costs might determine price, or it might be the other way around. That's a complicated topic and should be looked at on a case-by-case basis.

I think the more common thing is something will cost as much as the costs of its production, transport, etc., plus an additional amount for gains of the producer.

I wrote a longer post about this in the thread about gold.

That's a very interesting thought, and even if it isn't the entire reason for rising price, it still could be a (big?) part of it. I guess we will se if you are right in March/April.

Let's do some maths - how many BTC will be held by the miners at the end of March (I know nothing about mining)?

Also, how do you get to the date of March 31st? And are you saying it hasn't been profitable to sell since Jan 1st, so that's why miners have been hoarding from then on?

So, in your dream world:

-speculators are hodling
-miners are hodling
-hardware manufactures are hodling

So, everybody is hodling.  Yet, we saw 10k BTC sold in the last 24 hours.  So, somebody is selling, we know that for sure.