Topic: why price so low - page 2. (Read 3989 times)

This isn't a gold forum, so I'm gonna keep this short:



I don't have to do any math to see what's going on there.  Holy fucking parabola.  Intrinsic value has been left in the dust, and people are gonna get screwed.

I think bitcoin must make more connection with social value. Such as resources,  services, things made by imaginational and original ideas, food, clothes etc.

And transaction fee of bitcoin does'nt set mathematically.  This is a second things must be solved.

Third, bitcoin's Idea doesn't protected with patent. If it protected by patent bitcoin will be only one currency of this kind.

Anyway there are 150000 tons of gold in this world and 1 kg is 30000$.
Assume If bitcoin replaces this gold value, 1btc can be 214000$.

Actually, in the long run, investments in precious metals traditionally don't outperform stocks.  Neither do currency investments.  So it might be better to say that those are better short term investments.

exactly

New currency + uncertain future + controversy + low volume = high volatility.

*snip*
+1

k well regardless what your math skillz include anything relating to US investments or stock markets are garbage. people want to get on here and talk about how bitcoin is overapreciated and really worth less. wait til the real estate market starts adjusting to what it should be again. fucking flames. there is no guarantees. let people do their math all they want. like the guys who are so smart and say silver and gold are bad investments. yes they might be in a bubble right now... but in the long run they are going to make you the most... second to bitcoins of course.

OK, but in order to complete your analysis which compares the gross operating margin of bitcoin mining to other investment instruments, consideration needs to go to 1) the capital cost of the mining rigs and 2) the volatility of the underlying commodity and the associated risk premium. Even if you just take the volatility of the BTC as your cost of capital, the math changes significantly.

I think the $8-10 range is probably the true value of bitcoin at the moment.  The only reason it jumped to $11.50 is because of the speculation that the BTC conference was going to somehow drive up the demand for BTC, but it kinda didn't do anything so the price dropped back down again.   

At least it looks like it's creeping up a little bit after a week of being down below the 2 day average:

http://bitcoincharts.com/charts/chart.png?width=1107&m=mtgoxUSD&k=&r=2&i=Hourly&c=1&s=2011-08-26&e=2011-09-02&Prev=&Next=&v=0&cv=0&ps=0&l=0&p=0&t=S&b=&a1=SMA&m1=48&a2=&m2=25&x=1&i1=&i2=&i3=&i4=&SubmitButton=Draw&

I couldn't agree more!  I think that the biggest thing is that BTC doesn't penetrate the economic structure deep enough to warrant accepting it at the retail level, unless you are trying to be novel.  And novelty only goes so far.  That's why I said that if a wholesaler or two get into the BTC game we would see a real explosion in BTC utility, because then retailers don't have to take such a risk on inputs.  Also, if a legit lender (ie not a loan shark) started issuing loans in BTC.  Then you would start to get a sizable economy and start warranting a larger exchange rate.

The only thing missing from Bitcoin is a mature marketplace. It's getting there though.

Yes.  My personal opinion is that the fundamentals are still really poor - there aren't very many merchants accepting BTC, so the purchase cycle (Buy BTC on the market, go shopping, pay BTC, merchant sells BTC on the market) can be fulfilled with very few coins - you only need enough to sit in the buyers' wallets until they make their purchase, which realistically means a few days.  That's what I consider to be the fundamental price of the BTC, and it's much lower than where we are now, and it will be until more people accept the BTC for payment.

What's holding the price up right now is speculation: basically, people are hoarding it hoping the price will go up.  Short term the only way that will work is if people can push enough hype to get more people to "invest" (IE, keep speculating and hoarding).  That's what you're seeing in this thread, and from anyone who keeps saying "Up up up!".  People who keep saying the sky's the limit without mentioning any downside are usually the ones holding the bag, and they're trying to pump the price back up because they're losing their investment.  Long-term this never works.

If all the speculation ends (and it's starting to look like we're running out of suckers), the price will fall to the level supported by actual use as currency.  That means cents, not dollars, until we have much more real commerce happening in BTC.  That's fine by me because I want to use BTC as a currency, and it doesn't really matter to me what the price is - I just want it to be somewhat stable, and I think that will happen at a much lower price.

Next post: a bag holder with an insightful rebuttal. 

Does anyone foresee it going down anymore next week?  I wanted to invest a bit but I may as well wait if the correction isn't through yet.

silver has had terrible appreciation since 2001 i hear. dont invest in it either. not even worth looking into. lol

hahaha indio! for sure. but the thing is u know this. and others dont. convince them to invest in bitcoin instead of mining. gaining you more profit. bitcoin isnt going anywhere dont get concerned about the longevity of it and therefore give others the opportunity to profit making your difficulty level higher. just a though. if people were smart enough to figure it out for themselves, they deserve the reward.

Don't worry BTC is still over TWICE  as profitable than every other mainstream investment.

1gh/sec
 $8 per BTC
1000KW
 .15 KW/hr
 30 days

Coins per 24h at these conditions: 0.5658 BTC

Power cost per 24h: 3.60 USD
Revenue per day: 4.53 USD
      ... less power costs: 0.93 USD

Power cost per time frame: 109.57 USD
Revenue per time frame: 133.86 USD
      ... less power costs: 24.29 USD


Net profit first time frame: 24.29 USD

Profit Margin = 18%



Let's compare to other endevours....


Historical US corporate profit margin is 5.5% to 7.5%.
Historical US Equities yield is 9% to 11%


CURRENT

In the context of determining whether 'old' coins are flooding the market (to drive the price down), it's worth tracking the CoinDD (days destroyed) metric available here: http://abe.john-edwin-tobey.org/chain/Bitcoin.

The metric has not grown in any large jump since before this most recent price decline, and as such I suggest this decline is not a result of coins that have been sitting anywhere for any length of time.

You are making the wild assumption that I am against bitcoin.  I am not against it at all.  I actually like the idea a ton, and I am looking forward to becoming an active member of the bitcoin community.  That said, I realize that the current price of bitcoins can not be supported with the size of the bitcoin economy.  A 10% discount on alpaca socks isn't going to drive many people into the market, especially when they have to deal with their own local currencies for most day to day transactions.  And retailers only have the incentive of attracting a special breed of geek and the major disincentive of a very unstable, unsafe, risky currency that can't buy most of the things that they need for a successful business.

My point, obviously not clearly stated, was this; the surge in the price of bitcoin is mostly artificial and is starting to slide down again because the economy that supports it is not nearly large enough.  Now if some wholesalers got on board with bitcoin, then bitcoin would start to warrant something like $8USD/BTC.

I think now is just the time to buy

Price is HIGH at the moment because of speculators and other people with no interest in Bitcoin as a currency. They just want to make a quick buck then disappear... Hopefully they will all disappear soon, and we can get down to business of moving Bitcoin into the mainstream as a competitor to the US dollar.

critmass, tell me where you can can play poker online with us dollars or a us credit card. YAY land of the free!



just recently someone moved 2 million btc or about 20 million dollars, can you do that with dollar bills? without informing the government?


Perhaps there is some value to BTC beyond the scope of your life.

Just saying you cant look at the limited things you want to look at and say 'well it doesnt work for me, so it must be worthless", you have to expand your thinking and say "well what could it do for other people besides myself and why would it be better than dollars"