Post
Topic
Board Economics
Re: Bitcoin Price Drop
by
defxor
on 03/08/2011, 20:45:54 UTC
#1) Many more bitcoins will be in the hands of non-ASIC miners.

Completely irrelevant. The market price is what someone - anyone - sells at. We already know not all mined coins are being sold.

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#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.

The above is only relevant when everyone is using the same technology. This is the second time that won't hold true.

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#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.

See #1 and #2.