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Bitcoin's value is connected to the costs to continuously mine it and consequently keep the blockchain intact and secure. These costs include electricity, mini

Bitcoin's value is connected to the costs to continuously mine it and consequently keep the blockchain intact and secure. These costs include electricity, mining equipment, personnel, and warehousing. As with normal equity valuation, these costs would be transparent, allowing for valuation to take place. Since Bitcoin is decentralized and its "employees", or miners, are disparate; costs are not known. This information asymmetry is one cause of Bitcoin's unbounded price discovery.

noncoml 9y ago
What value do they create? Sure they burn electricity and energy but they don’t create any value other than the bitcoin value itself.
- proofofanalysis 9y ago
  The incorruptibility of the ledger is the value.
  - noncoml 9y ago
    > The incorruptibility of the ledger is the value. It cannot feed me, it cannot protect me from the elements, I cannot grow food on it and is not a tool to help me create something desirable by the others. Hence it has no value.
    - proofofanalysis 9y ago
      Bitcoin, being a form of wealth, can give you all the things you just described. That it has no value during an apocalyptic scenario, does not mean it does not have value in the non-apocalyptic times.
      - noncoml 9y ago
        You cannot call it wealth to describe its value. You are just saying that the value of it is in itself. Which is what I am supporting as well. In order for me to exchange it for goods, as you described, there must be someone who has the goods and is willing to exchange them for bitcoin. There is no real reason for someone to do so. It is not an apocalyptic scenario. That’s what 90% if the population fight for, day in day out. Food, protection from the elements, security.
        proofofanalysis 9y ago
        You are throwing away the possibility that there is an intrinsic value in Bitcoin, more related to socio-economic-political concerns, than survival. There is not only one domain in life.
        noncoml 9y ago
        Ok, cool. We are getting somewhere now. What does Bitcoin offer in that perspective?
        proofofanalysis 9y ago
        An incorruptible ledger resistant to the control of any individual, corporation, or state. Bitcoin may fail in its implementation of this goal. The future is still to be determined. Bitcoin's underlying technology creates the possibility of decentralized governance, starting with currency, which is the connecting link between actors in societies based on economy. Why such a future might be beneficial to mankind is that banking and finance being controlled by a few has led to errors with systemic consequences. See the 2008 financial crisis and hyperinflation in Venezuela and Zimbabwe. See the seizure of funds by governments from individuals in Greek and Cyprus, scenarios where many of the affected did not write their own doom (others wrote it for them).
        Lncn 9y ago
        I think you're conflating the value of a block chain with the value of bitcoin. Why is bitcoin more valuable in this regard than any other altcoin?
imtringued 9y ago
>Bitcoin's value is connected to the costs to continuously mine it and consequently keep the blockchain intact and secure. That's wrong. Bitcoin isn't worth $X because miners are expending $X resources to obtain it. Miners are expending $X because people are buying bitcoin for $X. Imagine a lottery where the reward is an ounce of gold which is worth $1200. A ticket costs $10. There is a guaranteed winner at the end of the lottery. When the lottery ends a random ticket will be selected and the owner gets the gold. Buying more tickets increases your chance of winning. Therefore participants will try to buy slightly less than $1200 worth of tickets. If the price of gold rises to $2400 people will buy twice as many tickets. The block reward for mining is decreasing on a regular basis. Resources spent on mining will decrease because of lack of profitablity. If bitcoins value is dependent on mining then why isn't it decreasing with every year?

noncoml 9y ago

What value do they create? Sure they burn electricity and energy but they don’t create any value other than the bitcoin value itself.

proofofanalysis 9y ago
The incorruptibility of the ledger is the value.
- noncoml 9y ago
  > The incorruptibility of the ledger is the value. It cannot feed me, it cannot protect me from the elements, I cannot grow food on it and is not a tool to help me create something desirable by the others. Hence it has no value.
  - proofofanalysis 9y ago
    Bitcoin, being a form of wealth, can give you all the things you just described. That it has no value during an apocalyptic scenario, does not mean it does not have value in the non-apocalyptic times.
    - noncoml 9y ago
      You cannot call it wealth to describe its value. You are just saying that the value of it is in itself. Which is what I am supporting as well. In order for me to exchange it for goods, as you described, there must be someone who has the goods and is willing to exchange them for bitcoin. There is no real reason for someone to do so. It is not an apocalyptic scenario. That’s what 90% if the population fight for, day in day out. Food, protection from the elements, security.
      - proofofanalysis 9y ago
        You are throwing away the possibility that there is an intrinsic value in Bitcoin, more related to socio-economic-political concerns, than survival. There is not only one domain in life.
        noncoml 9y ago
        Ok, cool. We are getting somewhere now. What does Bitcoin offer in that perspective?
        proofofanalysis 9y ago
        An incorruptible ledger resistant to the control of any individual, corporation, or state. Bitcoin may fail in its implementation of this goal. The future is still to be determined. Bitcoin's underlying technology creates the possibility of decentralized governance, starting with currency, which is the connecting link between actors in societies based on economy. Why such a future might be beneficial to mankind is that banking and finance being controlled by a few has led to errors with systemic consequences. See the 2008 financial crisis and hyperinflation in Venezuela and Zimbabwe. See the seizure of funds by governments from individuals in Greek and Cyprus, scenarios where many of the affected did not write their own doom (others wrote it for them).
        Lncn 9y ago
        I think you're conflating the value of a block chain with the value of bitcoin. Why is bitcoin more valuable in this regard than any other altcoin?

imtringued 9y ago

>Bitcoin's value is connected to the costs to continuously mine it and consequently keep the blockchain intact and secure. That's wrong. Bitcoin isn't worth $X because miners are expending $X resources to obtain it. Miners are expending $X because people are buying bitcoin for $X. Imagine a lottery where the reward is an ounce of gold which is worth $1200. A ticket costs $10. There is a guaranteed winner at the end of the lottery. When the lottery ends a random ticket will be selected and the owner gets the gold. Buying more tickets increases your chance of winning. Therefore participants will try to buy slightly less than $1200 worth of tickets. If the price of gold rises to $2400 people will buy twice as many tickets. The block reward for mining is decreasing on a regular basis. Resources spent on mining will decrease because of lack of profitablity. If bitcoins value is dependent on mining then why isn't it decreasing with every year?