Why bitcoins are dropping, and will continue to do so - page 2.

netrin

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FirstBits: 168Bc

Quote from: evoorhees on July 18, 2011, 10:39:24 AM

Bitcoin is not deflationary, regardless. It's asymptotically inflationary. It's only deflationary if people lose/misplace wallet files faster than the new currency is minted. In fact, BTC is much more inflationary that USD right now.

Bitcoins has seen 100%, 50%, and now 30% annual monetary inflation. Dollars have seen 300% M0 monetary inflation with the quantitative easing in 2008-2009. Currently this month, bitcoins are price inflating (currency devaluation) rapidly against the dollar (10% for the past week), but over the years, bitcoin has deflated 80% monthly against the dollar on average (doubled every ~50 days).

evoorhees

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Democracy is the original 51% attack

Quote from: niemivh on July 12, 2011, 11:07:04 AM

Welcome to deflationary economics 101.

That's why none of us buy computer equipment. We all know we'll get twice the power at half the price in 6 months. I'm still on an Apple II and one of those old Nokia cell phones from 1998. Clearly, deflation ruins economic progress.

PS- Bitcoin is not deflationary, regardless. It's asymptotically inflationary. It's only deflationary if people lose/misplace wallet files faster than the new currency is minted. In fact, BTC is much more inflationary that USD right now.

evoorhees

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Democracy is the original 51% attack

Quote from: Cluster2k on July 18, 2011, 10:00:24 AM

Even the most ardent bitcoin booster must wonder whether if it's worth buying bitcoins today at US$12.85 when they could be US$11 tomorrow.

The shortsightedness of some of these comments amazes me. Bitcoin is either worth pennies as a silly tech-geek collectors item, or worth thousands of dollars a piece as the new currency of the internet and international trade. There is not much middle ground, and the true value will be realized over the next 6-24 months.

Trying to ponder whether to sell at $12.85, or $11, or $13.46... so silly!

Cluster2k

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Quote from: 5grainsilver on July 18, 2011, 09:19:29 AM

Well now I am starting to wonder how long it can maintain this orderly gradual drop. What do you guys think is the panic point that will start a faster selloff and complete the penny stock pattern?

There are no doubt many miners out there who bought equipment specifically for mining. If their investments have not been paid off yet they may approach the "ah, stuff it!' point where they see the recouping of their costs drifting further into the distance while their hardware depreciates in value. If enough cut their losses and run (sell up and dump BTCs) we may see a significant drop as I doubt there are enough cashed up investors on the other side to buy up all the coins. Even the most ardent bitcoin booster must wonder whether if it's worth buying bitcoins today at US$12.85 when they could be US$11 tomorrow.

I sold a bunch of coins around US$18 to pay costs. Looks like a pretty good decision at the moment. BTC's value has been in a steady decline for almost a month. It's not immune to the general shenanigans happening at the moment in the USA and PIIGS.

5grainsilver

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Well now I am starting to wonder how long it can maintain this orderly gradual drop. What do you guys think is the panic point that will start a faster selloff and complete the penny stock pattern?

Rassah

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Quote from: muyoso on July 13, 2011, 07:35:04 PM

Quote

Pretty much anyone who sees the potential of Bitcoin transacting and has money to invest should be investing. The first person to come up with a well designed POS system will likely capture the first mover and networking advantages, dominate the market, and make millions. Your question is like asking, "who the hell is investing in exchange services" about 6 months ago. Sure, it would've seemed like a stupid money-losing investment then, but look at Mtgox activity and profits today.

No, my question is not like asking that. Exchange services serve a purpose that had to exist. POS systems and ATM's do not need to exist. The need for them to exist will come AFTER bitcoin becomes a stable and very widely used currency. All POS systems and ATM's would serve now is an extra useless layer between turning your real money into purchased goods. Take your real money, put it in the ATM, get out your wacky crazy bitcoin money, go to store, pay with wacky crazy bitcoin money, which the teller has to then turn instantly back into real money. Its like a giftcard with none of the advantages for the seller.

You're getting it backwards. It's not "using real money to get bitcoin," it's using bitcoin to get real money or real goods/services. ATMs will allow you to pull your bitcoin savings out in "real money" cash form, so you can use your bitcoin with fiat-based retailers. As for the POS (point of sale) systems, we need those to have a "widely used currency." They're the systems that you would approach with your bitcoin wallet and pay the retailer in bitcoin. It'll be up to the seller whether to hold the money in bitcoin form or convert, but POS is needed to at least be able to PAY in bitcoin.

5grainsilver

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Quote from: ?? on ??

Quote from: 5grainsilver on July 13, 2011, 05:11:25 PM

Investing in ATMs etc would be pretty risky considering governments will shut bitcoin down if it starts looking too much like a real currency. Look at what they did to egold.

That is kind of like saying "Look what they did to Napster".

Not the same.

The more likely comparison is "Look what they did to BitTorrent".

ATMs and pos aren't exactly peer to peer.

muyoso

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Quote

Pretty much anyone who sees the potential of Bitcoin transacting and has money to invest should be investing. The first person to come up with a well designed POS system will likely capture the first mover and networking advantages, dominate the market, and make millions. Your question is like asking, "who the hell is investing in exchange services" about 6 months ago. Sure, it would've seemed like a stupid money-losing investment then, but look at Mtgox activity and profits today.

No, my question is not like asking that. Exchange services serve a purpose that had to exist. POS systems and ATM's do not need to exist. The need for them to exist will come AFTER bitcoin becomes a stable and very widely used currency. All POS systems and ATM's would serve now is an extra useless layer between turning your real money into purchased goods. Take your real money, put it in the ATM, get out your wacky crazy bitcoin money, go to store, pay with wacky crazy bitcoin money, which the teller has to then turn instantly back into real money. Its like a giftcard with none of the advantages for the seller.

5grainsilver

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Investing in ATMs etc would be pretty risky considering governments will shut bitcoin down if it starts looking too much like a real currency. Look at what they did to egold.

jtimon

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Quote from: ?? on ??

Quote from: jtimon on July 13, 2011, 11:28:53 AM

Sorry, I haven't read the whole thread but, shouldn't it be in the speculation board?

I don't think there was a 'speculation' board when this thread was started.

"RALLY !!" Wasn't created there neither.

grod

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"Who the hell is investing in GPU mining hardware in 2010? It's a losing proposition, you'll never make back the price of those 5870s"

Hindsight is 20/20. The people making the same arguments against early adopter GPU miners would likely give their left nut for a time machine to summer of 2010.

Rassah

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Quote from: muyoso on July 12, 2011, 10:20:09 PM

Quote from: Rassah on July 12, 2011, 10:22:31 AM

Perhaps. Or perhaps doing things like designing working/secure phone apps, shop POS systems, ATMs, competent and easy exchanges, and easy-to-use secure wallet software just takes a bit more time.

You can't be serious. I swear 50% of the people involved with bitcoins are completely delusional. Who is investing in ATM's and POS systems? Do you know how expensive those are to implement? The totality of bitcoins are worth under a hundred million USD right now. In 2005, Visa and Mastercard alone did 100 million USD of volume for customers in around 23.87 minutes.

Who the hell is investing in ATM's and POS systems for bitcoin. Come on, you guys are smarter than this.

Pretty much anyone who sees the potential of Bitcoin transacting and has money to invest should be investing. The first person to come up with a well designed POS system will likely capture the first mover and networking advantages, dominate the market, and make millions. Your question is like asking, "who the hell is investing in exchange services" about 6 months ago. Sure, it would've seemed like a stupid money-losing investment then, but look at Mtgox activity and profits today.

jtimon

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Sorry, I haven't read the whole thread but, shouldn't it be in the speculation board?

Jack of Diamonds

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Quote from: muyoso on July 12, 2011, 10:20:09 PM

You can't be serious. I swear 50% of the people involved with bitcoins are completely delusional. Who is investing in ATM's and POS systems? Do you know how expensive those are to implement? The totality of bitcoins are worth under a hundred million USD right now. In 2005, Visa and Mastercard alone did 100 million USD of volume for customers in around 23.87 minutes.

Who the hell is investing in ATM's and POS systems for bitcoin. Come on, you guys are smarter than this.

You're right on this one. Ultra-libertarians and Ron Paul supporters/homeless people who know little of how financial markets work could actually tarnish bitcoins reputation with these claims.

'We' aren't anywhere near the level of Bitcoin ATMs. Point of sales devices, definitely, like klemen091 mentioned above.

This currency (or commodity) is only 2 years old. Talking about bitcoin withdrawals from public places is like mentioning a Pluto expedition for space travel, it's not going to happen for a very long time under current circumstances.

I like Bitbills as the most convenient tool to date. Not too expensive to produce, relatively easy to redeem.

http://www.bitbills.com/

BitcoinBug

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Quote from: muyoso on July 12, 2011, 10:20:09 PM

Who the hell is investing in ATM's and POS systems for bitcoin. Come on, you guys are smarter than this.

http://biticon.wordpress.com/2011/03/31/bitcoin-atm/

It is just a hobby project for now though. But as much as I can see, there are lots of highly technical people with high beliefs in Bitcoin and also lots of money pouring into Bitcoin on stock exchanges, so why does the possibility of investing into POS seem so off to you? If Bitcoin is the future, POS will be part of that. Probably not in a month and possibly not in a year, but later, SURE!

niemivh

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Quote from: grue on July 12, 2011, 11:10:03 AM

Quote from: niemivh on July 12, 2011, 11:07:04 AM

A system in which he who can afford to sit the longest on their pile of money wins. A system that resembles a bunch of hens sitting on eggs rather than the exchange of goods and services and economic growth through production and investment. A system in which if a person was able to take a time machine into the future they would have become richer simply through the 'virtue of saving'.

better than inflationary currency, where everyone is buying mass produced electronics every year, and in the process, racking up a ton of debt

Isn't there a relative means of balancing these two opposing forces in the economic system? Moreover, why in our 'inflationary system', that i assume you are alluding to, does the inflation occur? What is the cause of it in your opinion?

muyoso

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Quote from: Rassah on July 12, 2011, 10:22:31 AM

Perhaps. Or perhaps doing things like designing working/secure phone apps, shop POS systems, ATMs, competent and easy exchanges, and easy-to-use secure wallet software just takes a bit more time.

You can't be serious. I swear 50% of the people involved with bitcoins are completely delusional. Who is investing in ATM's and POS systems? Do you know how expensive those are to implement? The totality of bitcoins are worth under a hundred million USD right now. In 2005, Visa and Mastercard alone did 100 million USD of volume for customers in around 23.87 minutes.

Who the hell is investing in ATM's and POS systems for bitcoin. Come on, you guys are smarter than this.

conspirosphere.tk

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Bitcoin is antisemitic

Yes: price depends on demand and difficulty depends on price, but also:
demand depends on price: if the price manage to increase for a while, or at least stops dropping, you may expect more investment/speculative demand -and even the opposite applies.

Expectations on future price play a special role on miners (and even power bills who will arrive in the next future): many may continue to mine for a while for insignificant profits, hoping for better times by further increases of the BTC price, but after a while if nothing changes many miners (me included) will go looking for s.t. better to do with their hardware, electricity and time when they lose any hope for better returns.

5grainsilver

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Price will depend on demand, not cost of electricity. If bitcoins could be converted back to energy that argument would make sense, but it can't. Difficulty will respond to price. We have already seen that happen on the way up.

n4l3hp

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Your electricity must be free or really cheap if you can profit at $3 per coin. At $0.21 per kw in my area, $7.00 per coin is needed so that I can at least pay the electric bill. The fees for the funds transfer and exchanges is not even included.

Topic: Why bitcoins are dropping, and will continue to do so - page 2. (Read 28139 times)