I just realized my equation is slightly off. It should be:

P_S*S = P_D*D

Supply and Demand modify the price, and the two separate prices(supply and demand side) then either equal or give you unequal values that can determine the difference between supply and demand. The difference is the maximum that a side would have to alter its price to meet the other side's price.

In addition, the graph given has reversed supply and demand lines. Supply should decrease it's price with additional quantity. Demand should increase it's price with additional quantity. I don't know of any product or service where additional supply increases price while increased demand decreases price.

P = Price, S = Supply, D = Demand

P + S = P + D
3.00 + S = 3.00 + 70
S = 3.00 - 3.00 + 70
S = 70

P + S = P + D
3.00 + 70 = 3.00 + D
3.00 - 3.00 + 70 = D
70 = D

P + S = P + D
P + 70 = P + 70
P - P = 70 - 70
0 = 0

Ok, he's wrong.

Price can't be determined alone, which is why it cancels out. Since price is determined by both the buyer(demand) and the seller(supply), it will be 0 when both buyer and seller agree on a price, like in the graph. Otherwise it will be the difference between the buyer and seller's asking prices. That's where supply and demand come in. A lower supply influences the seller to ask for a higher price, a higher price influences the buyer to have lower demand. The three components work together.

Edited: May 30, 2011, 05:44:37 pm

And here I thought it was because when you divide the starting number of coins generated by the number of blocks before the coins halve and then multiply by the current recommended transaction fee you get the answer to life, the universe, and everything:

(210,000 / 50) * 0.01 = 42

I would think that any mining "board" should be built with a FPGA. ASICs can't be changed at a later date, so if bitcoins ever switch from SHA-256 to a different crypto all the boards would be useless. With a FPGA, you have a better chance of being able to program the new implementation.

If someone tries to create another block chain then it will compete against bitcoin and gain market share only if the merits of that future block chain exceed the merits of bitcoin. There will be plenty of people who will try a new block chain hoping to get in at the beginning. There is a risk in that, just like there was/is a risk for those involved with bitcoin. But people will likely exchange between the block chains and pricing relative to the chains will develop.

As for restarting the bitcoin chain, I see no reason to do so. The success of bitcoin depends on it's continued evolution. A reset would set everyone at square one and the value that people have determined for bitcoins would disappear. My trust in bitcoins and any future block chain would also be shaken since there is no determining whether the same thing would occur in the future.

Considering that bitcoin's value is based on trust, I can't see bitcoins succeeding if the block chain is restarted.