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"does this process not bootstrap the bitcoins into having some initial value?" No, because nowhere in that explanation is there any mention of demand for the m
by betterunix 13y ago
"does this process not bootstrap the bitcoins into having some initial value?"
No, because nowhere in that explanation is there any mention of demand for the mined bitcoins. If nobody were willing to accept a Bitcoin payment, the cost of Bitcoin mining would be irrelevant because the value of Bitcoin would be zero.
- aaren 13y agoAh, now I think I get it. It is demand pull, not supply push - the miners are only willing to spend money on mining because they think they can get that money back by selling. Buying mining hardware is speculating on the future price of bitcoin.