If I understand your philosophy re: Bitcoin, there is only 'the worst': Either Bitcoin will fail on its own defects, or some government(s) will destroy it, if it works as designed. Is that a fair summation of your position?
As it says in my signature,
I cannot imagine a plausible future where bitcoin will be successful. I see many ways in which it could fail, those are two of them. The more I read, the more skeptical I become.
Take the economy of mining, for example. Yesterday I found
this paper claiming that the bitcoin mining network now consumes about as much electricity as the whole country of Ireland , ~1 GW. I found that hard to believe, but it seems correct. For what? So that some drug dealers can be absolutely certan that their customer will not double-spend them? So that no one can retroactively change the amount that someone spent on Overstock? So that the police cannot seize the coins of ransomware criminals?
That absurd consumption of energy does not have any rational justification. It does not even make the network more secure against 51% attacks, because it is still the case that 4-5 mining entities have more than 51% of the hashing power, and that situation is more likely to get worse than better if the network grows more. Moreover, further price drops and/or the next halving may cause morethan 51% of the hashpower to be turned off -- and may be acquired or rented by a hostile entity, at scrap iron prices.
The absurd consumption of energy is merely a consequence of the block reward being fixed at 50 BTC irrespective of the price,
and of the price being 50 times what the current use as currency would imply. The overvaluation, in turn, is a consequence of the fixed supply, that created the mirage of a currency whose value will grow to astronomic levels; a mirage that led to a spiral of hoarding and absurd price increases. The overvaluation also resulted in the block reward being 100 times or more the typical fees contained in a block, so that miners have essentially no incentive to include transactions in it. Worse, the network consumes about 1 million dollars per day that must be provided by new investors, lured by the promise of fabulous speculative gains. And the absurd will only grow if the price increases again.
This system simply does not make any economic sense.
It is not sustained by sound market principles, but totally by hype, by the belief of gullible people that they will become billionaries if they just buy as much bitcoin as they can and hold hard to it.
From what I have read around, most people who claim to believe in bitcoin's future do so because of various reasons -- because they own bitcoins, because they are employees or investors of bitcoin-related enterprises, because they see it as a way to buy drugs and other illegal things, because of hallucinations about it ending poverty, corruption, banks, governments... but almost never because they rationally believe that it will be a viable currency and efficient payment system. Which is the only thing that it was designed to be, and it is becoming clear to everybody that it will not be.
You cannot see any posssibility of bitcoin succeeding. Yet here you are and bitcoin plods on month after month, year after year, unabated.
I have tried to explain to you before that your calculations for the 'correct use' price of bitcoin are completely meaningless. Bitcoin
has and for the forseeable
will have an exchange value which is largely derived from it's speculative value as a commodity and a store of value - not utility as a currency. You might not like it it but tough. If bitcoin eventually functions as a global ecommerce currency then you might find some validity in your suggestions at that stage. Until then your calculations about what you deem fair value for bitcoin will always be wildly wrong. The price is set by the market - and the market has seen it differently for
years.
You are again wrong when you say the network consumes 1 million dollars a day.
The network consumes nothing. Instead the network spits out the block reward (and transaction fees) every day to the miners who secure the network. The exponentially decreasing block reward dilutes existing bitcoin stock as the coins are distributed. Miners have income, costs and possible profit but these are unrelated to the bitcoin exchange price or the distribution schedule of new coin supply. Mining generates a diminishing portion of the supply of coins which may be sold on exchanges, but that is a small factor in the complex supply and demand relationship that creates the bitcoin exchange price.
Oh and bitcoin is precisely valued following sound market principles. The price is set on freely accessible exchanges all around the world. How much it is manipulated is a different matter
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