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$840
Wait, you projected it was going to go to $1,000 this year? And you didn't invest in it and buy up every ASIC you could get your hands on why?
So the question is, lets assume the currency fails (even Jojo has said that it isn't a problem). It's back down to, lets say $1, because all the founders cashed out, causing a massive pricing crash. Sure, some people are hurt about it cause they lost a buncha money. And let's say that it didn't matter if it was corrupt or not, just that the original price was manipulated and it's back to base value again.
At that price you can't really generate enough coins off of the electricity to make a profit though. It was already questionable when they were $3-5 a coin and there were more coins being released and less competition. And seriously - the whole driver of this run up was people looking to make quick profit. It doesn't really have all that much to do with "currency of the people". Those people would only toss in a few bucks as we saw, unless they wanted to buy some drugs or gamble.
For the sake of the experiment, lets assume the price stabilizes at a point where it is still (marginally) profitable to mine (or they are all mined before the crash, unlikely, but not really material to the experiment either way). I'm basically wondering if the crash would drive out the people looking to make a quick profit (either they did, and are set, or they lost money and won't touch it again), but create enough of a network and good enough software that it was still viable to use to transfer money from person to person without byzantine rules or processes.
The difficulty is adjusted to match the network hash rate to the desired block rate (average of 10 minutes each). The difficulty will level out when the network hash rate stops growing.
I really don't see how that's possible. If there's marginal profit there's going to be competition trying to take their share of the profit. But besides that, the number of coins issued is going to continually reduce. 1.3 million added each of the next 3 years, 650K in the 4 after that, then 325K in the 4 after that. If the price doesn't shoot up, people automatically see their revenue cut in half overnight at certain points. There is no way to continue to maintain the same amount of profit off of the same amount of work in this system - it HAS to deflate or it's toast.
No, I'll continue discussing bitcoin as I see fit. The only one being ridiculous here is you - calling for people to make specific predictions and demanding action on their part if they don't come true. At least I'm actually willing to toss one out there. We know you can't successfully predict this or you'd have a lot of money in bitcoins rather than talking here about how great the concept that you were drawn to by greed is, and yet won't even put your own money into. So if I get this right it's DrJ 1 - Jojo 0. And worst case I'll be batting .000 just like yourself.
No, the difficulty will increase until it actually becomes unprofitable and not worth the effort to mine new coins and the only hope to make profit is future deflation. Then people will stop mining and the difficulty will decrease. The remaining miners will start making more coins, but will start dumping the coins they are making at ever decreasing prices expecting that it's going to just continue to fall. This has happened once before already, but it wasn't too terrible to catch the knife at $2-3 a coin. To me the only feedback mechanism to stop this is if the creators are willing to dump the money they made at the high end back into it to catch the knife like they did before. And would that even be enough when the implosion ends up being very visible in the mainstream. It's even possible it sets the whole digital currency movement back a decade, because what functions as currency depends highly on public trust. It was the breach of trust we experienced in 2008 that gave this idea wings, but it's going to be harder to make a case to trust this more when people have lost piles of money.
DrJ you post so much FUD it is unbelievable. The miners do not control the price of bitcoin. The difficulty is not adjusted based on the price of bitcoin, but it is adjusted based on the rate at which new coins are discovered.
The only one being greedy here is you, I've stated numerous times that I don't own any and yet you are the one calling me greedy and then in the same sentence demanding I buy bitcoins - you are hilariously inconsistent in your insults. I've stated numerous times the currency aspect is only the tip of the iceberg yet that is the only part of it you seem to attach yourself to, gee I wonder why? You should spend less time trying to prove I am wrong and more time understanding what the hell you are posting.
I think the point DrJ is making in this case is that while the difficulty is adjusted based on the network hash rate, as long as there is incentive to mine that hash rate will be extremely fast. As the incentive to mine decreases (i.e. the price decreases), the hash rate will decrease along with it, assuming some people will stop mining as the price decreases - less miners = less hashes. So in that sense, since the price can affect the number of people mining, which definitely has a direct correlation to the difficulty, the price has an (albeit slightly indirect) correlation to the difficulty. Now, if the price plunges, but people continue to mine because, well, sunk costs and their investment, etc, then that seems worse for Bitcoin because the price is low AND the difficulty would stay high.
It's based on the number of miners. Last time the price crashed people stopped mining and sold off their GPU cards and only nutcases like yourself continued piling in. You're getting increasingly erratic here.
http://www.wired.com/magazine/2011/11/mf_bitcoin/all/
Everything you said is spot on. Due to its deflationary nature there's no incentive to actually spend Bitcoins, even if - especially if - they become popular. Bitcoins can't succeed outside of illegal transactions since law-abiding people would prefer to hold them rather than spend them.
I'm alright with Wordpress as I created a site for a tech geeky business I've been trying to start, so it shouldn't be too difficult. I've been meaning to do some blogging on that front as well, but it's not easy to blog on boring tech geeky stuff. This entirely unrelated issue could actually give me some "geek cred" and exposure that would be helpful on all fronts.
Dammit - I told you guys a week ago that there was big money to made in Dogecoin. Mining profitability was at "140", now we missed the boat. :(
All bark and no bite is the very definition of someone who repeatedly and desperately defends something that he hasn't even bought in to.
A fool and his money are soon parted.
Why it already works? Better question, why do you want a digital currency "to work" what is your definition of "to work"?
That'd be great if you could actually use bitcoins to buy anything, like food. Now they're just going to get ripped off too.
Do what you feel passionately about doing, but I recommend making a few posts over at http://www.reddit.com/r/bitcoin if you really want objective opinions instead of a dozen people patting you on the back here. There are plenty of doomsayers that check in on that forum as well so if you really had anything of substance you will certainly know right away.
Working currencies aren't nearly this volatile; there is little reason to transact using it.
Looks like a bunch of bitcoin trolls have overrun the place. This is why my site is important, the people marketing for this have tons of places to troll and try and shout down dissention. There needs to be a place where people can get the real story.
