Was what you said earlier about it your full answer? I am interested in your thoughts about this.

Now that is a question worth asking!

Well, I find that argument quite unconvincing.  As you pointed out in the case of day trading, one cannot assume that every player will just try to maximize the amount of coins that he gets from the next block.  Large corporate players may have more complex, longer-term goals, and motivations other than greedy coin-slurping.

It may differ from the main chain, e.g. in block frequency, block reward schedule, mandatory minimum fees, etc.

In another thread, I discussed a scenario where miners conspire to force a change in the reward schedule, postponing the next halving for 2 years (without changing the limit on total coins).  Some argued that long-term holders would vehemently oppose that change because it would mean higher inflation in those two years, and they would rather do a hard fork of their own.  But then, going back to that kid's fork: if he changed the schedule to bring the next halving forward a yar, then those holders would surely love his Series B coins, no?  Since those holders would automatically have as many Series B coins as they have in Series A, why not value and use them too?

To make the "time travel" advantage more plausible, suppose that a hacker manages to steal the 94'000 BTC from the USMS wallets.  Six hours later, after meeting in some undisclosed location at the invitation of some undisclosed entity, the CEOs of Coinbase, Kraken, SMBIT, COIN and a few more US bitcoin companies, as well as the president of the Bitcoin Foundation, issue a joint announcement: "for the future of Bitcoin", they are starting a hard fork that branches off just before the heist, and will henceforth work with that fork only; so all clients had better upgrade asap.  Moreover, with the help of that undisclosed entity, they are setting up a dedicated mining installation and temporarily reduce the difficulty so as to ensure an adequate block rate, but urge all miners to switch too.  They will try to re-issue any canceled transactions, or indemnify legitimate losses. Naturally many bitcoiners, exchanges, and miners all over the world will revolt and will keep mining and using only the old chain, while others will use both. 

Can you say that this scenario is impossible, and that one of the forks will immediately lose all its value?

No, I am describing a hard fork.

It does not interfere with the original chain directly, simply creates another clone, premined and "pre-transacted" to hae the same addresses, private keys, UTXOS, and everything as the original chain.  All it can do is steal value from the original bitcoins, if for some reason people prefer to spend their dollars on "series B" bitcoins rather than original ones.

Well, yes and no.  An immaterial currency can be issued at will; it is the ultimate "fiat money".

(Before you scream "21 million": that bitcoin limit is "guaranteed" only by  fuzzy arguments about a complicated economic game, not "by math", and could be changed if the right players agreed to it.  Moreover, any kid can duplicate the amount of bitcoins in existence by creating a hard fork of the blockchain and starting to mine it on his laptotp.  Anyone who has bitcoins will gain an equal amount of those "series B" bitcoins, accessible through the same private keys, and could trade them independently of his old bitcoins by duplicating his wallet and downloading the kids's client software. Whether those "series B" bitcoins will get a significant market value is a market(ing) question, not a technical one.  And, of course, there are the altcoins.)


Yes, with current technology there is in theory a minimum amount of useful energy that needs to be disspated (turned into waste heat) in order to perorm any logical operation.  That energy can be expressed as mass by Einstein's equation m  = E/c^2.   For example, a 10 watt lamp in one second burns 10 joules, which is equivalent to (10 kg m^2/s^2)/(300'000'000 m/s)^2 = 0.00000000000000011 kg, or 0.1 picogram of matter, if I didn't miss some zeros.  (Quantum computing may get around this limit somehow, but it is not known whether it will ever be usable for problems like this.)

The theoretical minimum energy cost of computations is quite small, much less than the cost that can be achieved with current technology.  But even if we use the actual cost, the mass equivalent of the cost of creating 1 bitcoin will be fairly small. Anyone knows how many joules are tipically consumed today to create 1 valid block (25 BTC)?  

However, the cost of creating something in the first place is only an upper bound to its "intrinsic value".  There are examples of huge civil engineering works that cost billions to build, were never used, and cost millions to demolish -- that is, had negative value.  (The dams built by Saddam Hussein to drain the marshes in Southern Iraq may be one example.  The Iridium communications infrastructure may be another.)  The computing the nonces of orphaned blocks costs as much as computing  those of surviving blocks, but those nonces are worthless (except perhaps to cryptographers, who may have a use for them).

Another upper bound for the "intrinsic value" of something could be the cost of duplicating it.  The cost of duplicating a bar of gold is the same as creating the first one.  For a banknote, printing an extra copy is much cheaper than printing the first one because all the plates and equipment are reused.  For information, the cost of duplication (theoretical and in practice) is extremely small.  

It can be argued that duplicating information in the bitcoin system does not produce extra bitcoins.  But that is not a physical constraint, it is a property of the whole bitcoin system -- not just the protocols and the algorithms, but also of the internet, and, mainly, how people use and react to those things.  So, the allegedly valuable properties of the bitcoin system -- single spending, authentication, limited supply, irreversibility, global reach, etc. -- do not define the "intrinsic value" of a bitcoin; they contribute only to its market value.

Moreover, no one really knows how hard it is to compute a valid block.  The trial-and-error method used by miners is just the most efficient method that we know; but there is no proof or other evidence that there is no better way.  There may well exist an agorithm that finds the right nonce for a block header in a few microseconds.  Or, worse, finds a block that has the same hash of another block but a different contents, including a specific transaction that is not in the first block.  Or finds the private key for any given address.  So, the theoretical "mass cost" of computing a valid block may be orders of magnitude lower than the trial-and-error cost.

First you tell me the weight of a bitcoin.  

[...]

No it is precise. There is no fundamental valuation, it is speculation about what others will do in the future. It goes for all money, the reason is that money can not directly be used for anything.

[...]

Your first paragraph: Neither he nor I have said that the market price is identical to everybody's sincere valuation. The point is that everybody has a different valuation, either above or below the last price.

The other paragraphs: Yeah, all kinds of reasons for what people do.

everybody who who owns bitcoin thinks that they are worth more than 245$; but, on the other hand, everybody in the world who has some money to spare thinks that 1 BTC is not worth 255$.

$245 is about where I thought I'd draw the line yesterday between "minor retracement, upwards move has some staying power" and "we're probably going back to square one, i.e. $220" ... Holding above $250 is pretty damn good actually, more than I expected.

He is basically right this time. Since bitcoins are neither produced not destroyed (by consumption), the only basis for demand is people who think it is worth more, and the only source of supply is people who think it is worth less. Historic value could for some be of importance, but should not, again since they are not consumable there is no reference. Only expected future value should matter. Just like cold and heat, where cold is just absence of heat, and darkness and light, where darkness is just absense of light, bitcoin supply is the same as absence of demand. So in case of bitcoin (and other pure money types), there is really only one parameter: The demand.

The speculation is about projecting the demand for bitcoins in the future. Those never exposed to the idea are one source of future demand.

Well, the price being 252$, it means that everybody who who owns bitcoin thinks that they are worth more than 245$; but, on the other hand, everybody in the world who has some money to spare thinks that 1 BTC is not worth 255$.

I was thinking about this.  Has the Coinbase exchange lessened the desire for a decentralized exchange?