Yes we are printing too fast!
I think one solution to tie the printing rate to price change (without a central server) would be to look at circulation, which is already available in the blockchain.
I proposed this here a few weeks ago:
https://bitcointalksearch.org/topic/proposal-idea-for-a-much-more-stable-bitcoin-26380
Topic: We're printing too many bitcoins (Read 4285 times)
plus its a bad time for merchants who sell goods or services for bitcoins. The problem is that if a merchant sells something thats worth $10 when bitcoins are worth $10 each they will get 1 BTC for that sale. If they hold that bitcoin today its only worth $8 and they have sold their product at a loss.
I'm in this exact situation! its terrible.
what needs to be done is increasing merchant confidence
plus its a bad time for merchants who sell goods or services for bitcoins. The problem is that if a merchant sells something thats worth $10 when bitcoins are worth $10 each they will get 1 BTC for that sale. If they hold that bitcoin today its only worth $8 and they have sold their product at a loss. you can compensate for the fact that bitcoin may continue to drop by charging more BTC than a product is worth, but this will discourage sales. some merchants hold on to their bitcoins and exchange them for USD after they have many accumulated (too much trouble doing many small cashouts).
except they can use BitPay who supposedly will provide USD to merchants instantly.
plus its a bad time for merchants who sell goods or services for bitcoins. The problem is that if a merchant sells something thats worth $10 when bitcoins are worth $10 each they will get 1 BTC for that sale. If they hold that bitcoin today its only worth $8 and they have sold their product at a loss. you can compensate for the fact that bitcoin may continue to drop by charging more BTC than a product is worth, but this will discourage sales. some merchants hold on to their bitcoins and exchange them for USD after they have many accumulated (too much trouble doing many small cashouts).
The number of coins mined currently exceeds the demand for them... that's my concern.
Correction. The number of coins *sold*, not the number mined. There is a very big difference between the two.
so much for bitcoin only being worth what someone will trade for it.... all anyone cares about is how many dollars its worth... lets face it, dollar value is only reason there is a 21 million bitcoin limit
Could you please elaborate? I really don't understand how come the dollar value is the reason there is a 21 million bitcoin limit.
tell ya what, all yall quit mining for one month and let me mine alone, I promise not to mine them all, when yall get back the difficulty will be low as hell, demand will be through the roof cause there will be only one miner and I aint selling and yall can get rich as hell. I'll do it for you one month some time later.
no, no, no, no. You cannot infer anything from the price action alone. the wild fluctuations are to be expected no matter the rate of btc production. you don't even mention speculation and cyclical mood swings which affect the price even more so.
I personally believe that the price drop was due to someone stealing 100,000 bitcoins and selling them at the open market for a then 1.3 million dollars (now 800,000) ... this wasn't because of the number of coins mined.
The number of coins mined currently exceeds the demand for them... that's my concern. Until we sort out as a community the security problems, the ease of use problem, and lastly and most importantly the reason bitcoins exist.. so merchants accept them problem... we're going to see them go to zero...
You can't have a currency if no one accepts it as currency.... to change that we need go pro on security, ease of use, and adoption rate of businesses.
Don't sell your bitcoins or spend it within bit-conomy.
If you are desperate for sell you only pull down the bitcoin value.
If you are desperate for sell you only pull down the bitcoin value.
In case you were wondering.
That the adoption rate of bitcoins are not exceeding the additional 50 coins per every 10 minutes dumped on the market.
Hence the inflationary pressures on bitcoins currently exceed the adoption rate... it's why we're seeing inflation (IE: bitcoins going from 30 USD to 13 USD per BTC) as compared to deflation (13 USD to 30 USD per BTC).
Now that might change over time... but in all honestly though it's not centralized via a central bank we're still "bernankeing" the system. or better said.. printing too many bitcoins to cause deflation. In fact we're printing more bitcoins in relation to the US dollar because we're seeing the bitcoin exchange rate falling in relation to the US dollar.
If the creation of bitcoins slowed down for the next several months, we might see it rise in value, but until that time it most likely will continue to go down for the near term as too many bitcoins are flooding the market.
Better said we need less than half as many bitcoins on the market now to bring it back to 30 USD to a bitcoin. Or we need to increase the demand by double.
The fact that our bitcoins are being hacked every 10 minutes (mtgox, mybitcoin, wallets vanishing from Poland exchanges, people seeing 25,000 BTC disappear from their desktop wallet) isn't helping increase the demand.
Honestly if you want to grow the currency you need to do the following:
1 - secure our stuff
2 - slow down on "printing" them
3 - make it easier to use for less technically advantaged individuals.
That point we might increase demand and decrease supply, hence leading to an increase in BTC vs USD.
That the adoption rate of bitcoins are not exceeding the additional 50 coins per every 10 minutes dumped on the market.
Hence the inflationary pressures on bitcoins currently exceed the adoption rate... it's why we're seeing inflation (IE: bitcoins going from 30 USD to 13 USD per BTC) as compared to deflation (13 USD to 30 USD per BTC).
Now that might change over time... but in all honestly though it's not centralized via a central bank we're still "bernankeing" the system. or better said.. printing too many bitcoins to cause deflation. In fact we're printing more bitcoins in relation to the US dollar because we're seeing the bitcoin exchange rate falling in relation to the US dollar.
If the creation of bitcoins slowed down for the next several months, we might see it rise in value, but until that time it most likely will continue to go down for the near term as too many bitcoins are flooding the market.
Better said we need less than half as many bitcoins on the market now to bring it back to 30 USD to a bitcoin. Or we need to increase the demand by double.
The fact that our bitcoins are being hacked every 10 minutes (mtgox, mybitcoin, wallets vanishing from Poland exchanges, people seeing 25,000 BTC disappear from their desktop wallet) isn't helping increase the demand.
Honestly if you want to grow the currency you need to do the following:
1 - secure our stuff
2 - slow down on "printing" them
3 - make it easier to use for less technically advantaged individuals.
That point we might increase demand and decrease supply, hence leading to an increase in BTC vs USD.
no, no, no, no. You cannot infer anything from the price action alone. the wild fluctuations are to be expected no matter the rate of btc production. you don't even mention speculation and cyclical mood swings which affect the price even more so.
what you got going on now is full fledge panic ... and that's because a laundry list of security issues (mybitcoin, mtgox, polish exchange, wallets vanishing from desktops, etc etc) that stretches from here to the moon.
couple that with a new 50 coins every 10 minutes and you have gas pouring on a fire.
we have to secure our stuff and after security is under control then we have to provide a valid path to businesses that accept bitcoins.....
couple that with a new 50 coins every 10 minutes and you have gas pouring on a fire.
we have to secure our stuff and after security is under control then we have to provide a valid path to businesses that accept bitcoins.....
6BTC an hour has been the rate since inception that hasn't changed(well it does for brief moments, then the difficulty is changed to regulate production back to 6BTC/hr). You are assuming that all mined coins are being sold(flooding the market)....what I believe we are seeing right now is GREED, nothing more...
so much for bitcoin only being worth what someone will trade for it.... all anyone cares about is how many dollars its worth... lets face it, dollar value is only reason there is a 21 million bitcoin limit
what you got going on now is full fledge panic ... and that's because a laundry list of security issues (mybitcoin, mtgox, polish exchange, wallets vanishing from desktops, etc etc) that stretches from here to the moon.
couple that with a new 50 coins every 10 minutes and you have gas pouring on a fire.
we have to secure our stuff and after security is under control then we have to provide a valid path to businesses that accept bitcoins.....
couple that with a new 50 coins every 10 minutes and you have gas pouring on a fire.
we have to secure our stuff and after security is under control then we have to provide a valid path to businesses that accept bitcoins.....
Some on this thread seem to be unaware that the rate of bitcoin "printing" can't change.
If interest drops, and only a dozen miners are left, then once the difficulty adjusts, there will be 50 new bitcoins every 10 minutes (on average.)
If China sets up a million new miners, then once difficulty adjusts, there will be 50 new bitcoins produced every 10 minutes.
That's the point of the difficulty adjustments: to ensure that the rate of new bitcoin production remains constant. The only way to change that is to alter the bitcoin protocol itself. Good luck getting a majority of the bitcoin community on board with that.
If interest drops, and only a dozen miners are left, then once the difficulty adjusts, there will be 50 new bitcoins every 10 minutes (on average.)
If China sets up a million new miners, then once difficulty adjusts, there will be 50 new bitcoins produced every 10 minutes.
That's the point of the difficulty adjustments: to ensure that the rate of new bitcoin production remains constant. The only way to change that is to alter the bitcoin protocol itself. Good luck getting a majority of the bitcoin community on board with that.
I know this ... i'm just stating the fact that more bitcoins are being produced than are being adopted / used in commerce / etc... ... hence why you're see BTC going to single digits.
The rate of bitcoin creation/increase in supply is minimal compared to the fluctuations in price being seen now and doesn't adequately account for the change in price.
Some on this thread seem to be unaware that the rate of bitcoin "printing" can't change.
If interest drops, and only a dozen miners are left, then once the difficulty adjusts, there will be 50 new bitcoins every 10 minutes (on average.)
If China sets up a million new miners, then once difficulty adjusts, there will be 50 new bitcoins produced every 10 minutes.
That's the point of the difficulty adjustments: to ensure that the rate of new bitcoin production remains constant. The only way to change that is to alter the bitcoin protocol itself. Good luck getting a majority of the bitcoin community on board with that.
If interest drops, and only a dozen miners are left, then once the difficulty adjusts, there will be 50 new bitcoins every 10 minutes (on average.)
If China sets up a million new miners, then once difficulty adjusts, there will be 50 new bitcoins produced every 10 minutes.
That's the point of the difficulty adjustments: to ensure that the rate of new bitcoin production remains constant. The only way to change that is to alter the bitcoin protocol itself. Good luck getting a majority of the bitcoin community on board with that.
I know this ... i'm just stating the fact that more bitcoins are being produced than are being adopted / used in commerce / etc... ... hence why you're see BTC going to single digits.
Therefore the title should be : Economy not keeping up.
Some on this thread seem to be unaware that the rate of bitcoin "printing" can't change.
If interest drops, and only a dozen miners are left, then once the difficulty adjusts, there will be 50 new bitcoins every 10 minutes (on average.)
If China sets up a million new miners, then once difficulty adjusts, there will be 50 new bitcoins produced every 10 minutes.
That's the point of the difficulty adjustments: to ensure that the rate of new bitcoin production remains constant. The only way to change that is to alter the bitcoin protocol itself. Good luck getting a majority of the bitcoin community on board with that.
If interest drops, and only a dozen miners are left, then once the difficulty adjusts, there will be 50 new bitcoins every 10 minutes (on average.)
If China sets up a million new miners, then once difficulty adjusts, there will be 50 new bitcoins produced every 10 minutes.
That's the point of the difficulty adjustments: to ensure that the rate of new bitcoin production remains constant. The only way to change that is to alter the bitcoin protocol itself. Good luck getting a majority of the bitcoin community on board with that.
I know this ... i'm just stating the fact that more bitcoins are being produced than are being adopted / used in commerce / etc... ... hence why you're see BTC going to single digits.
We're not producing enough products/services In BTC land. EXPORT 
Some on this thread seem to be unaware that the rate of bitcoin "printing" can't change.
If interest drops, and only a dozen miners are left, then once the difficulty adjusts, there will be 50 new bitcoins every 10 minutes (on average.)
If China sets up a million new miners, then once difficulty adjusts, there will be 50 new bitcoins produced every 10 minutes.
That's the point of the difficulty adjustments: to ensure that the rate of new bitcoin production remains constant. The only way to change that is to alter the bitcoin protocol itself. Good luck getting a majority of the bitcoin community on board with that.
If interest drops, and only a dozen miners are left, then once the difficulty adjusts, there will be 50 new bitcoins every 10 minutes (on average.)
If China sets up a million new miners, then once difficulty adjusts, there will be 50 new bitcoins produced every 10 minutes.
That's the point of the difficulty adjustments: to ensure that the rate of new bitcoin production remains constant. The only way to change that is to alter the bitcoin protocol itself. Good luck getting a majority of the bitcoin community on board with that.
I think there is a critical point when BTC value and difficulty combined cause that each mined BTC can not pay for the electricity, then most of the profit-driven mining operation will stop
For example:
How can you convince any shop owner to begin accepting Bitcoin as a payment method? And then having to explain the entire system?
How can you convince any shop owner to begin accepting Bitcoin as a payment method? And then having to explain the entire system?
C'mon. Once we had to explain how a mouse worked and once we had to explain what google was. But if it's useful people pick it up. PayPal was scary and different when it started and is now a "safe" solution for most people to send money online. It'll take time but it will get there.
One thing people seem to be missing is that as bitcoin expands as a common currency those blocks the miners are creating will pay off with more and more transaction fees. The whole idea of weaning off block bounties is so that those btc are replaced by the fees charged for using the service.
We could slow down or speed up production to make the USD rate fluctuate but the only real way to make it sustainable is to expand its use to the point where enough people use it in enough transactions that we can actually afford the infrastructure to provide it without the bounty.
The ONLY way to make bitcoin viable is to make it more available, useful and just plain common. Staging mining strikes or whatever won't do jack but make it more difficult to encourage adoption.
As far as bad press about hacks. It's amazing. It's huge news when a start-up btc exchange or business scams people but it happens every day, all over the world with whatever currency people are holding. Some guy got screwed in the peso market today. Some huckster swindled someone out of their life savings in Florida. Some goat herder got royally screwed on a cheese deal.
Yes, it's bad press and yes it shows we all need to pay attention to security but I'm delighted because it means bitcoins are worth something, just like a peso or your life savings or a chunk of goats cheese...
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