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Energy doesn't back bitcoin, it just stops the currency from inflating. Or it would, if mining could always produce new bitcoins, but IIRC its supposed to stop
by hwillis 9y ago
Energy doesn't back bitcoin, it just stops the currency from inflating. Or it would, if mining could always produce new bitcoins, but IIRC its supposed to stop after a while.
The difference being that a bitcoin does not entitle you to some unit of energy or work produced from it. The energy used to verify bitcoin transactions is just lost.
- jstanley 9y agoEnergy backs bitcoin in the sense that "cheating" (reversing transactions or double spending) costs inordinate amounts of energy.
- hwillis 9y ago"backing" a currency usually refers to exchanging fiat money for a good with intrinsic value. That does not describe the relationship between bitcoin and electricity at all. Energy ensures bitcoin's ownership, not its value (although it does impact its value indirectly).
- GBiT 9y agoThe more energy Bitcoin network uses, the more valuable Bitcoins are... If Bitcoins value falls down, energy usage will fall down too. Energy is used to create valuable document - The Block. And block is not necessary new Bitcoins, its transactions too.