When in doubt, call someone stupid!

This guy went to the Anthony Weiner PR school.

I'm just getting tired of trying to repeat myself explaining the same **** over and over even with charts he still doesn't get the point.

Difficulty goes up = cost to produce bitcoins goes up
Cost to produce coins goes up = bitcoins price to go up

All this can be seen through public data and information that any idiot can figure out.

In conclusion, yes one day only people with a lot of rigs/cheap elect will only be profitable or worth mining. That is like anything else in this world, you need to get in the market sooner than later before it becomes over saturated like the web hosting industry has.

Oh and lets not forget the fact that technology advances to produce better products saving you money.

Ok and why is the difficulty currently increasing and price falling?

You cannot be ****ing serious, you seem to rely on short-term data than long-term.

But here I'll baby spoon you more information.

http://bitcoincharts.com/charts/mtgo...gSzm1g10zm2g25

i found this useful fwiw: http://www.economist.com/blogs/babba...rtual-currency

Great link, explains how BitCoin works in great detail!

This is a good one.

You are telling me that and yet base your whole business-plan on a static short-term difficulty, that will be out of date tomorrow?

I don't think this bubble-correction is short-term variance. If it would continue to grow in historical speed, according to the difficulty, it would have to be at 50usd/btc in 11 days. We will see if that happens.

Icy- another reason why you are wrong is that if the value of bitcoins is growing exponentially like it has been until recently, mining would obviously be very profitable, and more computational power would be added to the netwerk. If prices would be driven by difficulty, this would mean that the expected growth in the future would remain exponentially. But if that would be the case; why would the current value of a bitcoin just be 20/30 usd? If you know that the value of 1 BTC would be in the direction of 1000+ USB in a year only a ****** would be willing to sell for 20/30 USD right now.

Long explaination for a simple concept; future expected price growth is priced in, in the current exchange rate.

Gah just about to pull the trigger on 1 ghash rig for £800 (prices in UK suck).

I did PM someone who helpfully told me it's not the greatest invention, but the geek in me is calling out, making nothing from something sounds fun, and £800 isn't a huge amount of money for me at the moment I'm quite lucky, and I get a good shot at having all this hardware for free.

Icy,

Would you please put the estimated next difficulty and the current price on your graph? I think that would explain what a lot of the argument is about.

Bah Tom you're right I plugged more accurate numbers if I go for it now it's going to be basically breakeven if the price remains the same. Boooo

Edit: Still profitable for 4-6 week window exactly basically as long as price per BC doesn't drop hugely.

Wait, you think the value of bitcoin is based on the cost of production? That's ridiculous. It's likely that value and cost of production will fall into long term equilibrium, but this will be because of competition on the supply side and not because productions costs are setting the value.

The bold part is where you went wrong. There will be on average 7200 coins created per day no matter how difficult it is.

No one gives two ****s if its harder for miners, that doesn't mean they deserve more money.

You are mistaking correlation for causation. The reason the two are correlated right now is because there are a lot of new people who are interested in mining, and there are a lot of new people who are interested in buying a coin. These people are probably finding out about bitcoin through various media at about the same rate. In the future the price per coin and difficulty could seriously diverge. For example, when the price fell from $30 to $10, I doubt mining difficulty changed much at all. As TC pointed out miners will stay in the game even after a price collapse because they have already made an investment. This means difficulty could stay high if price falls.

We've seen 150% variance in the price of btc in a single day this past week. Anyone projecting prices 30 days from now is very likely to be wrong. BTC/$ is just too volatile right now to make any prediction.

It still makes sense to try various projections (worst case scenario, most likely, optimistic) to see where things might fall.

it's not his graph. Hell it's not even his post. He copy/pasted teh whole thing word for word from the bitcoin forums from chudpaba

Sigh. A lot of what has been been asked I already explained. At this point you just have to understand how and what makes Bitcoin work.

If I'm wrong, then Bitcoin is doomed to fail.

Reread what you highlighted in bold 100x until you actually understand what i said.

You said exactly what Tom stated.

Your wrong, and yet bitcoin is not doomed to fail.

This is where it gets messy. People that use those calculators get flammed at for not "thinking about the difficulty increase".

The irony of that is these people make a graph not "thinking about the cost per bit coin".

Another important variable they miss the the speed bitcoins rise in value, which changes. The same with difficulty, difficulty goes up x amount at x amount of speed, both of these variables change that have followed the trend of price in bitcoins up to date, as you can view from charts and some graphs i qouted from another user who understands the concept.

When price recently shot up, many new users and existing users build more rigs to contribute to the network. This increased the speed and rate of difficulty, which both went up.

The price of bitcoin shot up to $30 and at the same time shot down to $8 in a matter of days, everyone who didnt understand bitcoin and trends were worried, me and a limited amount of others werent because we knew the price would balance out based on past trends, which is has now and is at a current going rate of $20 per bit coin.

When people see the bitcoin valued at $8 they do caculations and obviously figure its a terrible idea to build rigs. When this happens the speed in which difficulty increases, slows down. This can possibly lead to difficulty actually going down, which has happened in the past, or difficulty remaining the same for longer periods of time.

Play the game right and there is still lots of profit to be made. One main thing is learning how to build a rig with just what you need for making the most out of mining and nothing more.

Past trends lol? How do you know it wasn't going to balance out at $2?

I don't think anyone knows where the price is going. The point is, if you are so convinced the price is going to rise, it's probably more +EV to just buy coins on the exchange and forgo the hardware costs which represent a huge comparative risk.

If you're so sure this is a win, can't you just get a credit card with $1k on it?