Topic: Why is bitcoin price not going up? - page 3. (Read 10824 times)

Yes, but play it through...

I buy an ASIC miner for bitcoin, and send bitcoin to the manufacturer.
The manufacturer needs to buy components, pay staff for labour, and otherwise spend bitcoin to make the ASICs. Many vendors and people don't accept bitcoin, which means the manufacturer needs to sell bitcoin to get cash.

Why would they need to sell Bitcoins to buy ASICs?

Aren't ASIC sold mostly for Bitcoins now?

Didn't Avalon switch to Bitcoin pricing?

In the gold rushes, the bulk of the value was sucked out by the suppliers - those selling the mining supplies, food, etc.  Why would anything be different this time around?

Very compelling argument sir.

The btc to silver ratio has been going the wrong way for that, though.  The price of silver is going /up/ in btc, not down.

Interest for Bitcoin is going down after all the hype. And the problem is that most people are extremely impatient and they wanna sell more BTC than there is demand so they keep going cheaper. There needs to be more places where you can pay with Bitcoin so that people don't see it purely as an investment but more like a useful trading tool.

It has happened before... hold on to your bits

We are now in the mid 60s with a low of 65 today.  The speed of this drop has been extreme. 

That very well could be a valid theory.  The miners are convinced that there is a decent chance of spending 1 BTC today and earning more than 1 BTC over the next year or so as a result.  It's a gamble because nobody (except the manufacturers themselves) knows how many Thash/s are on order -- but gambling never is a rational act.

Right.  If some government REALLY felt threatened (pro tip: they don't) they could issue an order to a major chip fab corp (AMD/INTEL/broadcom or any of the smaller ones even) to produce a couple million ASICs at sub 25 nm.  Our chip makers are tiny compared to the big guys. 
Bitcoin remains fragile and at the mercy of these factories.  So play nice, we aren't the biggest or even the smartest kids in the sandbox by a long shot.  500TH is a small datacenter and a couple months work if they want to break us.  Its not like they can't, they just aren't.
If they did, it would expose that they are afraid in a very visible way.  So....  It won't be the US, though it might be an "ally" that could do this.

The other option is to paint Bitcoin as Illegal druggies and gun-toting evil devil people, and then they can end us as a "public service".  So... be nice.

Well, I can confirm that I did that. Cashed out a big chunk of my holdings a few weeks ago to invest in ASICs. And there will be more selling as soon as the ASICs arrive, because people will want to recover their investment ASAP.

Today's economy development is always a ponzi style development, driven by one after one bubble, government and central bank need bitcoin to save them from the current mess, they have no better options, because they have been on the current route for too long time. Things will unfold in 3-4 years time

With traditional bubbles, they have a difficult situation: If they print too much money, there is a risk of inflation, and they have to tighten the money supply, which cause the bubble to burst. But they don't have this worry for bitcoin, since when they tighten the money supply and reduce the available fiat money, people will just directly spend bitcoin, so there won't be mass liquidation of bitcoins, bubble just shrinked. And due to limited supply, the volatility for bitcoin is always high, so people are all well prepared for the risk, this also reduce the impact when FED tightens. Longterm wise this bubble can last for hundreds of years and becomes the biggest driven power for world economy

Pull the plug on two pools , and those numbers dwindle , a lot ))
If indeed a goverment as powerfull as the US whould declare war on all fronts against bitcoin... god helps cause nobody else could.

And don't start about torrenting and drugs or so...
I said total war.
Imagine if the US puts a bounty on the head of the top 100 filesharing website owners and silences a few of them osama style......would you still run a torrent website? lols

As reference for my second post (re the Government attacking Bitcoin);

Blockchain.info reports the total network hashrate as being 184,000GH.

So, you'd need another 184,000 on top of that to have 50%. Then, account for all the other ASICs that are on the verge of shipping, lets call it that the government needs 500,000 GH to be reasonably certain they can shut it down quickly.

One BFL Jalapeno retails for $249 and provides 5 GH. You need 100,000 of them to achieve that much hashing power. That means at WORST, any interested party could pull off an attack for $24,900,000. But, wasn't BFL offering to sell their chips for $70 or so in quantity? So buying directly from them, eschewing cases, and such would bring the cost of the silicon down to $7 million. And that $70 cost likely includes a bit of profit margin not just for Butterfly Labs themselves, but their foundry too. At the end of the day, the gov't could probably go to a foundry and get what they needed for $3 or $4 mm. Even if assembly costs are $1 million, that brings the cost of attack up to $5 million.

Seems quite vulnerable if you ask me.... the ASIC's deployed certainly don't provide much protection against any "real" attacker, as much as people seem to think they do. And with all that said, the original question is "why is it not going up?", I'd now ask "Why should a virtual currency that can be attacked and nullified at a cost of $5 million have a market cap close to 200 times that?" Or, have I missed something?

The price is not going up, because there just isn't enough demand for bitcoin at this price.

3600 BTC is created each day, that is some heavy supply.

So, you'd buy up $900 million worth of Bitcoins, throw away the private key, and watch as people mined more?  Wouldn't that set a precedent and have everyone clamoring to create more and more virtual currencies in the hopes that you'd buy them out, too?

Why wouldn't you just invest a fraction of that and destroy the network? I'd think all it would take is $10 or $20 million to do it. Maybe $50, but i doubt that. The government has plenty of people with encryption know-how, plenty more with experience designing custom hardware, they could easily roll out their own ASIC and cream Bitcoin, a la what I think I heard Luke-Jr did to a competing coin - just mine the snot out of Bitcoin so that the difficulty gets so high that the rest of the miners don't stand a chance at being able to find new blocks anymore. Or just 51% (more logically, 70 or 80%) the network and refuse to relay transactions.

That's how they'd destroy Bitcoin - buying them up would be the most expensive option with zero guarantee of success when there are other options with much greater likelyhood of not only succeeding but dissuading anyone from trying again.

Bitcoin is perfectly usable at todays value. Too many people (almost all, actually) are viewing it as an an investment and not a currency. No one holds dollars (or any other currency) expecting to get rich off of those and those alone, yet everyone seems to think that simply by holding their Bitcoins, they should get rich. Nah. Use your bitcoins the way you would dollars, spend them or bank them. But it seems silly to hold them hoping they'll go up when there's no real reason it should - it's primary purpose right now (aside from speculative trading) is in transfering value; if you exchange Bitcoins for dollars on one end of a transaction and the other person exchanges those Bitcoins back to dollars at the other side, whether a bitcoin is worth one penny or $100 makes no difference. Now, if you do insist on seeing the value of the Bitcoins themselves go up, there needs to be a reason for people to want to buy them, ie, more vendors offering to accept them, for instance. With out that, there's no more reason why a bitcoin should be worth $200 as there is that it should be worth $10. Even better than vendors selling in Bitcoin would be if they passed along some of the benefits to the users (ie, discount their products AT LEAST by the amount the credit card companies would have taken, and even better, pass along some of the savings for not having to deal with unexpected chargebacks.

Yes, there are a few shops that accept Bitcoin, they mostly ONLY accept Bitcoin. Offer things for sale via traditional methods (paypal, credit cards, etc) and then pass along a Bitcoin discount that's more than just a token discount, and you might see more people clamoring to get their hands on it...

My two satoshi's, at least....

I think that the price isn't going up because it's going down.

Why doesn't it keep going up? Are you serious?

It went from $13 in January to $260 in April. Maybe in needed a breather.

It's still up "only" 600% since January.

What would make you happy? Up 100% each month? With no retracement ever?

The person I know who knows the most about the business side of Bitcoin shared an insight with me. A significant fraction of Bitcoins are held by miners. They are long-term bullish on Bitcoins, so they hold rather than selling, essentially hoarding Bitcoins and keeping the price high. Now, ASICs are about to totally change the mining landscape. They either have to give up on mining or buy ASICs. Since they're long-term bullish on Bitcoins, they believe it makes sense to buy ASICs and invest in mining. But to do that, they need cash. So they're selling their Bitcoins to get cash to buy ASICs. This is pushing the price down. Essentially, the value in the Bitcoin economy is being sucked out by ASIC manufacturers. If this person is right, we could see low prices at least until the vast majority of miners are on 28nm ASICs.