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It's a perfectly sensible statement. Bitcoin provides value in the form of moving money from A to B, which is a service people are happy to pay some amount for,
by archontes 4y ago
It's a perfectly sensible statement. Bitcoin provides value in the form of moving money from A to B, which is a service people are happy to pay some amount for, and (arguably) being a store of value. Bitcoin's value, derived from its utility, is quantifiable, most easily by comparison to other items that provide the same utility.
Bitcoin has a cost, as well. The undercover economist might tell you that it fails to charge for an externality, namely its climate impact.
It's entirely possible that, were that exernality priced in, the cost to operate bitcoin might exceed the value it provides relative to other providers, which would give it net negative value.
- ProjectArcturis 4y agoIn which case it would stop transacting and the value would be zero.
- archontes 4y agoCorrect. In the case that it stops transacting, the value of bitcoin as a system would be zero. In the case where the costs are larger than the value produced, but are not paid by the bitcoin system (external, you might say), then it would still have net negative value, but continue to operate.
- astrange 4y agoThe value wouldn't be zero, the transaction rate would head to zero. The value would be stuck at whatever it last traded at, so it'd become very volatile.