Supply, Demand, and Bitcoin | Hacker News Reader

Supply, Demand, and Bitcoin

blog.inbitbox.com

37 pointsKinnard15 comments

" The more they’re worth, the more you think you’ll be able to sell it off for in the future. The more you want" Seems to be precisely the some larger fool theory that denotes a bubble, regardless of supply, demand, or donuts.

That aside, one can readily check if people mining bitcoins were actually selling them in that time period. Given the frenzy, I doubt it. But it's probably worth checking

Kind of obvious, but worth explicating: If this model for Bitcoin price is accurate, then there are going to be a lot of very interesting market-timing-related implications.

Nice article. I am a miner, and I made this observation, the dollar value that I mine any given day has been almost constant since a year (except the brief $200 spurt, which the author explains by accounting for the difficulty upgrade delay). When the value goes up the number of BTC mined goes down (because more people are mining). Its quite a beautiful correlation actually.

Beauty indeed. Architecture this elegant is more appropriate for an organism than a currency.

http://www.reddit.com/r/Bitcoin/comments/1eq3v1/bitcoin_is_n...

This article makes bitcoin sound like a ponzi scheme

How so?

That's because it has some characteristics of one.

Why isn't everyone just quitting their day jobs and becoming Bitcoin miners? It's like the modern day Gold Rush!

The West is reckless.

Because difficulty increases to the point where the folks with the cheapest electricity are breaking even. And the cheapest electricity in the world is free (dorm rooms, cubicles, etc).

The only money to be made in Bitcoin mining is in making fairly strategic investments during the leading edge of advancements in efficiency, or changes in miners' understanding of the economics.

It's getting more complicated than that. Expect financial deepening to occur when it comes to mining. http://jpkoning.blogspot.com/2013/02/financial-deepening-and... I would also keep in mind that lots of people are thinking about harnessing the bitcoin network for a plethora of applications. http://qz.com/84056/the-bitcoin-network-is-now-more-powerful...

One notable point is that one mining company, Asicminer, has a bitcoin-denominated stock that dramatically increased in value over the last several months.

It IPOed at 0.1 btc per share, now trading at about 2.5 btc.

Along with the increase in the value of btc relative to the US dollar, Asicminer now has a market cap (on paper) of about $125 million, from an IPO that raised about $200k.

They're based in China, Shenzhen I believe, and have been making the most of their self-designed asics. They currently represent about 18% of the entire bitcoin network, as measured by hashrate.

http://www.asicminercharts.com/live/

Yes, quite the success story.

Only possible because of the ineptitude of other market participants utterly failing in deploying ASICs.

Because there is one huge problem - the power usage of the CPUs / GPUs / ASICs. If you buy a "mining rig", probably an ASIC costing $1200 - $6000 (you can spend as much as you want scaling up and across) up front and it consumes something like 800 watts of power 24/7, you have the up-front cost of hardware plus the power bill (800W continuous is 584kWh per 30 days which depending on your area might be like $62 per month per 800W rig).

You may never recover those costs, especially if newer more powerful ASIC rigs are release each year since more overall network computing power diminishes your existing rig's efficiency.

Also - hardware breaks down under maxed out continuous usage, so there's that too.

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