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Or it could be, gasp, perhaps bitcoin was overvalued? No, anything but that.

HenryBemis 9y ago
IMO BTC's value could sensibly fluctuate around $10k. The hype/trend and the media frenzy caused the spike of $20k. Let it rest for a while and I believe it will have more races up-and-down the 10k-22k range so people can enjoy their gambling ;)
- empath75 9y ago
  It could also sensibly fluctuate around $1000 or $100.
storafrid 9y ago
How would you define "overvalued"? Is it the current average price compared to a very low price three months from now? What if it recovers a few weeks after that — would that change the fact that it was once "overvalued"? Valuation is not based on nothing, in vacuum. The challenge is to understand the underlying factors. The post you replied to actually tried to shed some light.
- jhoechtl 9y ago
  The price of energy required to mine 1 BTC. What else? That's its inherent value.
  - glenneroo 9y ago
    This will end very soon since 80% of coins have been mined already. So the energy consumption will only be miners processing transactions.
    - teh_klev 9y ago
      In my book, 2140 isn't "very soon" (based on the current Bitcoin mining algos).
      - notsrg 9y ago
        The last 1% of unmined Bitcoin will last over 100 years. A majority of mining profits at that point will be from tx fees.
        teh_klev 9y ago
        Sure, but "only" !== "majority".
  - sethgecko 9y ago
    The price of energy required to mine a bitcoin follows the bitcoin price not the other way around.
  - paulgb 9y ago
    This is just the discredited labor theory of value, applied to machines instead of humans.
    - oneeyedpigeon 9y ago
      In other words, I could spend an hour exerting effort and have nothing of value to show for it at the end?
      - jrimbault 9y ago
        That's obvious... You can work for a year and still get nothing... Because your work has no value in and of itself. In general things are only as valuable as the "market" is willing to pay for them.
        oneeyedpigeon 9y ago
        > That's obvious Sure, I was agreeing / checking my understanding was correct :)
  - steeleduncan 9y ago
    No, the energy required is a function of the price, not the other way around. The bitcoin network adjusts the block difficulty (effectively the energy required to mine 1 BTC) every 2016 blocks such that the rate of creating blocks is fixed at one block (currently 12.5 BTC) every ten minutes. If the dollar value of energy required to mine 1 BTC is significantly less than the current dollar value of a bitcoin then it is likely more hash power will be added to the network by the bitcoin farms, further increasing the network's hash rate, and as a consequence the block difficulty and therefore the price of the energy required to mine 1 BTC.
- Goladus 9y ago
  How would you define "overvalued"? The difference between the price of bitcoin versus the price of bitcoin as it would be if it was only used as a medium of exchange rather than a speculative asset.
sethgecko 9y ago
Please do tell what the correct value is for a bitcoin and how you arrived at that number.
- stillbourne 9y ago
  The value is 0 because entropy is a stupid commodity.
skerit 9y ago
I thought most people, even the hard-core believers, were waiting for a correction. The previous times Bitcoin grew so exponentially it was always followed with a hard crash, though this time it's taking a bit longer.
- empath75 9y ago
  Not really. It took a long time to bottom out post-gox
flowctrl 9y ago
Yes theres that, but BTC being overvalued doesn't explain the entire market dip that we are seeing now. However, it is consistent with Bitcoin's historical pattern: https://twitter.com/cryptozerp/status/953324474077769728 https://twitter.com/cryptozerp/status/953324474077769728

IMO BTC's value could sensibly fluctuate around $10k. The hype/trend and the media frenzy caused the spike of $20k. Let it rest for a while and I believe it will have more races up-and-down the 10k-22k range so people can enjoy their gambling ;)

empath75 9y ago
It could also sensibly fluctuate around $1000 or $100.

storafrid 9y ago

How would you define "overvalued"? Is it the current average price compared to a very low price three months from now? What if it recovers a few weeks after that — would that change the fact that it was once "overvalued"? Valuation is not based on nothing, in vacuum. The challenge is to understand the underlying factors. The post you replied to actually tried to shed some light.

jhoechtl 9y ago
The price of energy required to mine 1 BTC. What else? That's its inherent value.
- glenneroo 9y ago
  This will end very soon since 80% of coins have been mined already. So the energy consumption will only be miners processing transactions.
  - teh_klev 9y ago
    In my book, 2140 isn't "very soon" (based on the current Bitcoin mining algos).
    - notsrg 9y ago
      The last 1% of unmined Bitcoin will last over 100 years. A majority of mining profits at that point will be from tx fees.
      - teh_klev 9y ago
        Sure, but "only" !== "majority".
- sethgecko 9y ago
  The price of energy required to mine a bitcoin follows the bitcoin price not the other way around.
- paulgb 9y ago
  This is just the discredited labor theory of value, applied to machines instead of humans.
  - oneeyedpigeon 9y ago
    In other words, I could spend an hour exerting effort and have nothing of value to show for it at the end?
    - jrimbault 9y ago
      That's obvious... You can work for a year and still get nothing... Because your work has no value in and of itself. In general things are only as valuable as the "market" is willing to pay for them.
      - oneeyedpigeon 9y ago
        > That's obvious Sure, I was agreeing / checking my understanding was correct :)
- steeleduncan 9y ago
  No, the energy required is a function of the price, not the other way around. The bitcoin network adjusts the block difficulty (effectively the energy required to mine 1 BTC) every 2016 blocks such that the rate of creating blocks is fixed at one block (currently 12.5 BTC) every ten minutes. If the dollar value of energy required to mine 1 BTC is significantly less than the current dollar value of a bitcoin then it is likely more hash power will be added to the network by the bitcoin farms, further increasing the network's hash rate, and as a consequence the block difficulty and therefore the price of the energy required to mine 1 BTC.
Goladus 9y ago
How would you define "overvalued"? The difference between the price of bitcoin versus the price of bitcoin as it would be if it was only used as a medium of exchange rather than a speculative asset.

sethgecko 9y ago

Please do tell what the correct value is for a bitcoin and how you arrived at that number.

stillbourne 9y ago
The value is 0 because entropy is a stupid commodity.

skerit 9y ago

I thought most people, even the hard-core believers, were waiting for a correction. The previous times Bitcoin grew so exponentially it was always followed with a hard crash, though this time it's taking a bit longer.

empath75 9y ago
Not really. It took a long time to bottom out post-gox

flowctrl 9y ago

Yes theres that, but BTC being overvalued doesn't explain the entire market dip that we are seeing now. However, it is consistent with Bitcoin's historical pattern: https://twitter.com/cryptozerp/status/953324474077769728 https://twitter.com/cryptozerp/status/953324474077769728