The price of the Bitcoin has stayed strong despite a high-profile security leak and flash crash at the then-leading Bitcoin exchange Mt. Gox. But there’s some indication that demand may not be keeping up with the minting of Bitcoins by enterprising programmers in basements, bedrooms and data centers. For months, Bitcoin enthusiasts were buying up graphics cards, which can be used in mining, on sites like eBay and Newegg. But the price of these components may be going down, an indication that demand for mining rigs is decreasing as the market gets flooded with Bitcoins.
One Bitcoin miner, posting on the Bitcoin Board forum, is bearish on the business of mining. “I looked at eBay — the COMPLETED LISTINGS — and it looks like the going rate at eBay is coming down. Selling for $140 with free shipping — and you can’t ship a 5830 for less than $8,” he said of one of the cards.
Hundreds of other miners will be unloading cards at fire sale prices in a month or two, he said:
You know what scares me the most about Bitcoin?
The fact that every 2016 blocks (about 11 days), 100,800 new BTC are minted. That means that, to maintain the CURRENT price of $13.50, we’d need $1,360,000 of NEW MONEY entering the system every 11 days. Considering that Bitcoin isn’t *that* convenient, popular, or necessary for day-to-day life yet — and the Mainstream Media seems to have declared war on it — I see the market correcting even further until it hits an equilibrium — which unfortunately we be lower.
What does that mean for my rigs? Well, I’ll be making less from them. Hopefully something will happen to increase BTC demand — because that’s the ONLY thing that’s going to raise BTC prices long-term. BTC can’t rise in price from a bunch of speculators buying & selling — if anything, the price would go down from attrition (as Mt. Gox & Tradehill — “the house” if you will — take their cuts)
Just my .02 BTC.
We all know what happens when supply exceeds demand. This also means the BTC market is getting increasingly liquid, as the percentage of BTC being hoarded is decreasing. But as the number of goods that can be bought with BTC continues to increase and the number of apps available for it make it more accessible to the mainstream, demand for the currency as an actual unit of exchange may go up–especially since the price has been pretty stable of late.
The macro trend is that word about Bitcoin continues to spread–the “What Is Bitcoin” video has been translated to the German–and it’s hard to see how that won’t lead to increased demand. It’s just a matter of pacing.