Post
Topic
Board Economics
Re: Bitcoin Price Drop
by
lemonginger
on 03/08/2011, 20:38:01 UTC
Yes, and in the meantime those who switch to ASICs can undercut everyone mining with GPUs and still make a huge profit. That creates a downward pressure on the price of bitcoins.

#1) Many more bitcoins will be in the hands of non-ASIC miners.

#2) No other resources dynamically adjust their difficulty to a fixed rate. If you get a magic gold finding machine, the gold doesn't automatically become harder to find after you use it a few times.

#3) All of the price is dependent on miners nonsense only holds true if other bitcoins were being destroyed after use so the only way you could get bitcoins was to buy from a current miner and if the difficulty of mining bitcoins didn't change with technology. It is impossible to have a major disruption in bitcoin supply. Disruptive technology may quickly drive previously profitable mining operations out of business, but it won't do jack to the BTC price which is determined by buyers and sellers. Some of those sellers are miners, many aren't.