Quote from: ronald98 on June 07, 2016, 10:36:19 AM

Quote from: Spaceman_Spiff on June 07, 2016, 10:22:57 AM

Quote from: marcus_of_augustus on June 07, 2016, 09:46:35 AM

Quote from: Spaceman_Spiff on June 07, 2016, 06:26:56 AM

Quote from: marcus_of_augustus on June 07, 2016, 03:26:15 AM

http://satoshi.nakamotoinstitute.org/posts/bitcointalk/65/

Quote

The price of any commodity tends to gravitate toward the production cost. If the price is below cost, then production slows down. If the price is above cost, profit can be made by generating and selling more. At the same time, the increased production would increase the difficulty, pushing the cost of generating towards the price.

In later years, when new coin generation is a small percentage of the existing supply, market price will dictate the cost of production more than the other way around.

At the moment, generation effort is rapidly increasing, suggesting people are estimating the present value to be higher than the current cost of production.

... does that spell it out clearly enough for you?

Doesn't the fact that supply is fixed suggest that production cost follows the price?

... therein lies the magic, difficulty ratchets up cost and price ratchets up difficulty ... it's a virtuous circle from which the counterfeiters cannot escape.

Yes, but nothing ratches up price, so it is the driving factor, no?

People panic buying when they panic about missing out ratches up the price. The more people hear about the price ratching up, the more people start panic buying. That's the biggest driving factor.

What if it's price manipulation. As in putting a massive wall up to make bot algorithms kick in.