Yesterday I had a go at my first reddit post, having recently discovered reddit. slashdot is by nerds for nerds, reddit appears to be for rednecks. There is definitely a market for something inbetween.
It’s ineviatble that the conversion value of the Bitcoin currency will drop towards the end of 2012 with Fiat currencies.
Why, BTCFGPA and Butterfly Labs are bringing to market specialised ASIC computers just to mine Bitcoins. You connect the boxes to your standard PC, they mine quicker and consume less electricity. My “guess” is at least a quarter on Butterly’s 832MH unit – 80W. (Compared to a standard PC rig and high end video card).
Lower power consumption to mine bitcoins = lower fiat money conversion value.
Bitcoin backed by
People including so called “Bitcoin experts” write that Bitcoin is not backed by anything. This is absolute tosh. Gold and silver are backed by oil in today’s world, and Bitcoin is backed by electricity. Gold and silver has to be mined, and miners and the processes involved are paid in Fiat money which is underwritten by oil in some way. But the beauty of Bitcoin is that it is directly backed by the market price of electricity – until the 21 million coins have been produced…
I propose by my bi-polar nerve endings that the price curve for Bitcoin will be a bathtub curve over time.
Bitcoin v Fiat
The value of Bitcoin isn’t in a day to day spot price v a Fiat currency. The value of Bitcoin lies with what it will do to society, because of what you can do with it.