Good point.  It's also a question of short-term speculation vs long-term growth/viability.  Even if you bought at/near the recent high, near-term dips below your buy-in price don't matter if you have confidence in AM management in the long run.

Demand drives pricing.  That's it.  If people are buying, and demand is high, you always charge a premium price. Always.  When demand changes, you shift your price *reactively*.  The AM guys are the only ones who know the true demand.  If they feel demand is still high, there is no business motivation to change pricing.  If they feel it is lagging, and if they have a lot more inventory to move, I guarantee that the prices will start to correct downward to compensate.

Your basic analysis is correct, but your conclusions assume AM has no gameplan for this scenario.  Any company selling products in a competitive space needs to assume this will happen.  Products sell for premiums when there is minimal competition.  Prices drop to increase sales volume when competition increases and demand lowers.  Margins shrink.  Meanwhile, any responsible company will already have a successor product in the pipeline to bring on the market when the conditions are correct (profit has dropped too far, old inventory has cleared, competitive environment is favorable, etc).  The fact that they sold ~40% of their sticks at top premium price is amazing.  I'm sure they will offer price reduction soon enough to move the rest of the inventory.

At this point, we're looking toward the first conclusion of a product cycle within the ASIC space as competition comes online.  What AM does here is pivotal to investor confidence.  If they have been planning well, we won't see a huge change in business performance.  If they haven't planned for this, we'll see the gap you are predicting.  Place your bets.

Yes, you can check the mined ASICMiner blocks and their fees here - http://blockchain.info/blocks/ASICMiner

You are correct.  BTC is designed to be supported solely by fees once all coins have been mined.  The idea is that as the block reward is halved, the number of transactions will have likely increased and will offset (to a degree) the reduced mining reward.  The key here is to estimate the transaction total per block and avg fee size per transaction.  For 15 BTC in fees per block, at today's numbers (randomly selected: 394 trx @ 0.2812 btc fees), we're looking at ~.0007 btc fee per trx, or 21000 transactions per block.  That's an increased transaction volume of roughly 47x to yield 15 BTC in fees.

Now, if the relative value of BTC/fiat goes up, then the fee will likely have an inversely correlated drop - BTC doubles, fee halves.  If we assume a doubling of BTC/fiat value by the next block halve, and a halving of the average fee to .00035 btc, we would need 42000 transactions per block to yield 15 BTC in fee rewards. We're getting close to a required transaction volume increase of 100x with this scenario.   I think major retailers would need to start accepting BTC to yield these numbers in either example.  The acceptance bar here is to make sure BTC is simple enough to acquire, secure, and spend that my parents could start buying things with it at Costco.

Please feel free to critique my numbers and approach, but this is my back-of-the-napkin approximation.

For some of you withdrawing USD from Bitfloor, you might be experiencing a long delay.  I submitted by documents for verification the same day trading was halted.  I then submitted by ACH withdrawal request, which promptly entered the pending state.  From there, it took about a day or so to leave the pending state and show up as an actual deduction.

However, I began to get nervous when my bank didn't show a corresponding pending deposit.  I emailed support this morning and got this response a few minutes later:


While not a guarantee, it certainly gives me more confidence in that Roman is at least expending effort to respond to customer concerns.  I've read good things about him on this forum, so for now I'm going to be patient.

Others had suggested a consolidated fold-over of Bitfloor accounts into one of the other exchanges, which I would have been very happy with, but who knows how difficult merging the two databases would have been.  I would also have been happy to be repaid in BTC at some fixed exchange rate (and quickly move the BTC to another market) but that opens a whole new set of problems, especially given the current price volatility.  As it stands, I might get my funds ultimately transferred to a new market within 10 business days if I'm lucky.  Who knows where the price of BTC will be then. 

It would be helpful if the mining algorithm could be modified to minimize the impact of processor type.  Supposedly litecoin was designed in address this.  It might not be feasible for bitcoin to change that much at this point, but it's possible that Satoshi considered this early on and isn't concerned with the implications.  Only if we see the network hash rate really spike, and make the difficulty jump with it, will we know the impact on the network as a whole.  Smaller miners, like myself, might just bail if the block mining expectancy jumps by years.

I thought the same thing, so I went through the BFL purchase process just to see what they offer for payment options.  Guess what... Bitcoin, Paypal, and wire transfer only!  For a company making even thousands, the overhead of supporting credit cards is nominal.  So why not?  Prevent chargebacks is the best thing I could think of.  I laughed and closed my browser.

We'll find out soon enough though, since they say they are shipping in a "week".

I'm just a regular guy from the internet who has become fascinated with bitcoin's technology, recent rise, (and correction).

I installed GUIminer about a week ago and was lucky enough to discover a block on my own with just a lone 5770 card.  My room is a good bit warmer now too.  After that I was hooked on any info I could grab about bitcoin.  I'm interested in the mining aspect of BTC and other crypto currencies, and am wondering how the ASIC mining community (if ASICs are even legit) will affect the broader economy.

And no, I didn't sell during the mania.  I think recovery from this panic is crucial to bitcoin's longevity.  New exchanges will compete and balance Mt.Gox's dominance, and hopefully stabilize the currency overall.

cheers