Bitcoin Is Getting Smoked To Start The New Year Down 16%

[NACBA]

Bitcoin is under $300 for the first time since November of 2013. It's down ~16% to start 2015.

After peaking at $1,147.25 in December of 2013, it's been one long, slow descent for Bitcoin.

It's not good for Bitcoin, which had tremendous hype when its price was exploding. But, it's not necessarily the worst thing in the world, either.

Fred Wilson, a startup investor who is bullish on bitcoin, said the following in a blog post about what he thinks happens in 2015:

Read more: http://www.businessinsider.com/bitco...#ixzz3Ns00Q0vi

[Zippyjuan]

The "cool factor" wearing off?

[PaulConventionWV]

FYI, bitcoin was under $300 in October, so this is not the first time.

[Schifference]

I thought the intrinsic value in BTC was the cost to mine them. The expenses of equipment and electricity. I thought as more get mined the cost to mine them goes up. With that said if it keeps dropping people won't be able to affor to mine them. But I guess there would be no need to mine them because the low price could be indicative of a slowing demand.

[jmdrake]

Gold, silver, oil, bitcoin, all down. Connection? Predictions?

[Schifference]

Gold, silver, oil, bitcoin, all down. Connection? Predictions?

After the government squeezes every last dollar they can and regulate the masses into oblivion, those that have gold & or silver in storage will be the winners.

[PaulConventionWV]

Gold, silver, oil, bitcoin, all down. Connection? Predictions?

Dollar up.

[muh_roads]

In October it hit 275 then shot back up to 475. Play the swings for more BTC until the ecosystem works itself out.

I thought the intrinsic value in BTC was the cost to mine them. The expenses of equipment and electricity. I thought as more get mined the cost to mine them goes up. With that said if it keeps dropping people won't be able to affor to mine them. But I guess there would be no need to mine them because the low price could be indicative of a slowing demand.

Mining keeps the system running. It doesn't just produce new BTC, mining processes the ledger transactions for the network. When the spot price drops, the hashrate usually drops with it. I'm not sure if the hashrate will see much of a decrease this time tho.

Go here if you want to watch the next estimated diff change in real-time and see other stats.
http://www.bitcoincharts.com/

The "intrinsic" value that backs Bitcoin and protects its supply is the math that makes cryptography and encryption work.

[NoOneButPaul]

Dollar up.

Winner winner!

Still think bitcoin is a load of crap however and what's happening is the people who were trying to make a quick buck are now leaving.

No one can explain why bitcoin is 100x more valuable than litecoin or any other crypto coin other than it was first and that's a terrible argument for it being a store of value.

Still stacking gold and silver and still feeling great about the decision despite the last 3 years of $#@!...

[NoOneButPaul]

In October it hit 275 then shot back up to 475. Play the swings for more BTC until the ecosystem works itself out.



Mining keeps the system running. It doesn't just produce new BTC, mining processes the ledger transactions for the network. When the spot price drops, the hashrate usually drops with it. I'm not sure if the hashrate will see much of a decrease this time tho.

Go here if you want to watch the next estimated diff change in real-time and see other stats.
http://www.bitcoincharts.com/

The "intrinsic" value that backs Bitcoin and protects its supply is the math that makes cryptography and encryption work.

And why is that so much more valuable than the other 100+ crypto currencies now out there?

[Danke]

Dollar up.

Gold has done better against every currency in 2014 except the dollar.

[dannno]

And why is that so much more valuable than the other 100+ crypto currencies now out there?

Because more people use and accept bitcoin, it has greater infrastructure.

[staerker]

And why is that so much more valuable than the other 100+ crypto currencies now out there?

Because the demand for it is greater. Because it is more widely used. That is what the market has decided so far.

[muh_roads]

And why is that so much more valuable than the other 100+ crypto currencies now out there?

To add to what dannno said, the strength of a crypto is also measured by its global hashrate. The market has chosen Bitcoin. Many alts out there have been abandoned and have broken blockchains. You can't withdraw many $#@!coins from exchanges even if u wanted to.

Still think bitcoin is a load of crap however and what's happening is the people who were trying to make a quick buck are now leaving.

Being able to send any amount of money you want for pennies to anyone in the world with no middleman or central authority is not "a load of crap". Bitcoin can get around Government sanctions and even the great firewall of China.

If you took the time to understand and research Bitcoin more, you'd appreciate what people are trying to do in this industry. You don't have to like Bitcoin, but you could at least appreciate peoples desire for freedom to transact with what they want. Crypto will force the legal tender law debate one day. And that is also a win for metals.

[idiom]

The geopolitical global currency war currently going on doesn't factor in right?

[PaulConventionWV]

Winner winner!

Still think bitcoin is a load of crap however and what's happening is the people who were trying to make a quick buck are now leaving.

No one can explain why bitcoin is 100x more valuable than litecoin or any other crypto coin other than it was first and that's a terrible argument for it being a store of value.

Still stacking gold and silver and still feeling great about the decision despite the last 3 years of $#@!...

You're full of it. There doesn't have to be a reason for bitcoin to be so valuable. "It's first" is reason enough because the market develops consensus over time instead of just automatically spreading into similar inventions based on merit. The market isn't always based on merit.

[PaulConventionWV]

And why is that so much more valuable than the other 100+ crypto currencies now out there?

Because who cares about those other ones? A consensus has developed around bitcoin, and that's enough for the market to value it more than the rest.

[Schifference]

It seems that all currencies control wealth. Wealth that was once stored in peoples pockets is now all in banks or digital. A person use to walk around with a tangible piece of wealth now they have some number.

[Crashland]

Because more people use and accept bitcoin, it has greater infrastructure.

That is why Bitoin is more valuable now. It is not a good reason to assume it will be the same way later. What happens if a coin with a more sustainable architecture catches on and starts building an infrastructure that starts rivaling bitcoin's?

The one advantage that bitcoin does have for being first, which no other coin can really compete with at the moment, is that bitcoin has the most fair initial distribution, even considering how top-heavy it is. Compared to other coins, it isn't even close. This is why I feel that if any altcoin ever does replace bitcoin, the initial allocation will either start off as a bitcoin fork, or it will involve a two-way peg with bitcoin such the new chain does not need its own separate coin.

[squarepusher]

Bitcoin is very bloated with the miner subsidy and massive payments for electricity. Each transaction still costs $15
https://blockchain.info/charts/cost-per-transaction
That makes Western Union seem cheap, and that doesn't even mention ...

hady exchanges with high fees/restrictive identification verification if you ever want to convert BTC to currency.

[muh_roads]

The one advantage that bitcoin does have for being first, which no other coin can really compete with at the moment, is that bitcoin has the most fair initial distribution, even considering how top-heavy it is. Compared to other coins, it isn't even close. This is why I feel that if any altcoin ever does replace bitcoin, the initial allocation will either start off as a bitcoin fork, or it will involve a two-way peg with bitcoin such the new chain does not need its own separate coin.

The two-way peg implementation exists only for the purpose of protecting Sidechain's as they operate behind BTC's enormous mining hashrate. A Sidechain can not change the integrity of Bitcoin's Blockchain. That always continues to function on its own as if nothing was attached to it.

I'm just not worried about another alt taking over right now. If we see it coming, I think we'll start to know. We'll already have the BTC to switch to anew.

[torchbearer]

I thought the intrinsic value in BTC was the cost to mine them. The expenses of equipment and electricity. I thought as more get mined the cost to mine them goes up. With that said if it keeps dropping people won't be able to affor to mine them. But I guess there would be no need to mine them because the low price could be indicative of a slowing demand.

so the market dictates a bitcoin limit by price at market verses mining cost.

[muh_roads]

Bitcoin is very bloated with the miner subsidy and massive payments for electricity. Each transaction still costs $15
https://blockchain.info/charts/cost-per-transaction
That makes Western Union seem cheap, and that doesn't even mention ...

That is a weak and very disingenuous argument you are trying to make by not talking about who the burden of transaction cost is shifted to.

The minimum fee to send BTC is still 0.0001 as the sender. And the receiver sees no fee. The miner's costs aren't being forwarded to the merchant either. Western Union is forwarding its costs to its consumers. BIG DIFFERENCE.

When I swipe my credit card I don't think about how much it costs all the middlemen to process the transaction. And it will always exist that way so long as mining exists.

Eventually ASIC miners will be built into "always on" household appliances like refrigerators & freezers. It might not be much but it will help offset the electrical cost for people.

[squarepusher]

That is a weak and very disingenuous argument you are trying to make by not talking about who the burden of transaction cost is shifted to.

The minimum fee to send BTC is still 0.0001 as the sender. And the receiver sees no fee. The miner's costs aren't being forwarded to the merchant either. Western Union is forwarding its costs to its consumers. BIG DIFFERENCE.

When I swipe my credit card I don't think about how much it costs all the middlemen to process the transaction. And it will always exist that way so long as mining exists.

Eventually ASIC miners will be built into "always on" household appliances like refrigerators & freezers. It might not be much but it will help offset the electrical cost for people.

This is assuming miner rewards, in a few years there won't be any miner rewards anymore, and what will that mean? Either not many people will mine bitcoins anymore, or the transaction fee per coin will have to significantly go up.

not talking about who the burden of transaction cost is shifted to.

Right now its shifted to people buying Bitcoin, as it being hyped as going to $10,000 and beyond, and anyone who buys Bitcoin will own their own private island in a few years. That's what is subsidizing it now, new people buying in/hype/ponzi/greater fool.

Right now, 3600 bitcoins are mined per day, even at current deflated price of $280, that means the Bitcoin network needs a $1 million dollar subsidy to miners (for electricty and rent and ACIC mining equipment) to keep its price stable.



Also none of this even covers the issue of actually converting BTC for money which in itself is a huge troublesome process.

[amonasro]

Bitcoin is very bloated with the miner subsidy and massive payments for electricity. Each transaction still costs $15
https://blockchain.info/charts/cost-per-transaction
That makes Western Union seem cheap, and that doesn't even mention ...

hady exchanges with high fees/restrictive identification verification if you ever want to convert BTC to currency.

This particular metric is like combining the operating costs of VISA and (including electricity to run their many worldwide offices) and dividing it by how many transactions they process, plus the merchant fee.

[Crashland]

This particular metric is like combining the operating costs of VISA and (including electricity to run their many worldwide offices) and dividing it by how many transactions they process, plus the merchant fee.

Yes it is, but if I am doing my math correctly, with VISA's $12.7 billion in annual revenue (operating cost plus merchant fee, which is mostly in the form of collecting interest), and 2,000 transactions per second which equals 63 billion transactions processed per year, that would be $0.20 per transaction...

[squarepusher]

Yes it is, but if I am doing my math correctly, with VISA's $12.7 billion in annual revenue (operating cost plus merchant fee, which is mostly in the form of collecting interest), and 2,000 transactions per second which equals 63 billion transactions processed per year, that would be $0.20 per transaction...

meanwhile Bitcoin can only handle 2.7 transactions per second max...
Also Visa offers plenty of buyer protection (in case of fraud), and also acceptance everywhere in the world. With Bitcoin you can buy a few places, takes 1 hour confirmation time and no consumer protection. Why are people buying Bitcoin other than the promise of being rich?

[Crashland]

meanwhile Bitcoin can only handle 2.7 transactions per second max...

I thought it was 7 txns per second. In either case though, that is a major concern. I would point out the "cost per transaction" as you calculate it, has been decreasing. There has been quite a lot of attention devoted to scalability, and numerous altcoins have already attempted to deal with this in various ways. But can bitcoin do it?

[kpitcher]

Bitcoin is very bloated with the miner subsidy and massive payments for electricity. Each transaction still costs $15
https://blockchain.info/charts/cost-per-transaction
That makes Western Union seem cheap, and that doesn't even mention ...

hady exchanges with high fees/restrictive identification verification if you ever want to convert BTC to currency.

If you include the cost of the built in inflation - the block rewards - as part of the cost then sure, I guess you could say each transaction costs some. Those rewards do halve on a regular basis, in 2 years there is less reward for a miner.

Realistically, for me to send you $10 USD equivalent right now it would cost me a few cents.

[Crashland]

If you include the cost of the built in inflation - the block rewards - as part of the cost then sure, I guess you could say each transaction costs some. Those rewards do halve on a regular basis, in 2 years there is less reward for a miner.

Realistically, for me to send you $10 USD equivalent right now it would cost me a few cents.

It only costs you a few cents, but since you are not attaching a transaction fee of $15 to the miners, the miners will be selling that $15 on the open market to cover their expenses. So you sending $10 to someone for a few cents results in a $15 sell order on the open market.

I'm a proponent of bitcoin, btw, but I do see this as being a significant problem