Quote from: Impaler on June 02, 2013, 09:33:33 PM

The only growth your seeing in the BTC economy is the growth in demand to speculate. Actual goods and services transacted in BTC are flat or barely rising, and even that is mostly commerce that would otherwise have occurred in USD even without BTC existing.

My suspicion is that miners are hoarding most coins right now because they can cover their energy costs selling just a few. We will see difficulty increase until it becomes self limiting and once all miners are forced to liquidate to pay for electric costs the price will crash as their is no way that people will put a half million dollars a day into buying newly minted BTC, the amount necessary to sustain the current price.

I think a bigger reason for continuing reduction in exchange rate is the fact that miners are currently transferring btc (wealth) to chip makers in a futile attempt to maintain hash rates and those manufacturers are converting those btc into fiat because it's not like the avg Chinese factory worker wants to get paid in btc. This trend will continue for a while since true asic chip cost is very cheap vs current high exchange rate. But irregardless of that short term issue all fiat is currently in a race to the bottom anyways so btc future will be fine. Also nothing wrong with a deflationary currency. During the entire human existence gold/silver was deflationary vs the entire human population growth rate with maybe a few short term exceptions (bubonic plague, new world ore discoveries) and yet it's still managed to be used as a store of wealth to this day.