not to mention that there is a (unknown and likely linear) relationship between intrinsic value of BTC and cost and presence of hashing power.
First of all, there's no such thing as "intrinsic value". It is outrageous that you hold this medieval dogma and at the same time pretend to lecture others on the social science of economics.
Let's cite Carl Menger first:
"[v]alue is… nothing inherent in goods, no property of them, but merely the importance that we first attribute to the satisfaction of our needs... and in consequence carry over to economic goods as the… causes of the satisfaction of our needs." (Principles of Economics)
I really prefer Silvio Gesell's critique, and I find this part specially comical:
https://www.community-exchange.org/docs/Gesell/en/neo/part3/3.htm"The presence of value can be demonstrated on the weighing-machine: "fully-valued". Whether there are any other processes for detecting value has not yet been established. Litmus paper seems to be insensitive to value, the magnetic needle is not deflected by it; it withstands the highest known temperatures. Indeed our whole knowledge of value is still somewhat meagre, we only know that it exists. This is unfortunate, considering the "fundamental importance" of value in science and in life. New possibilities are, however, opened up by Dr. Helfferich's discovery that with some "substances containing value" (Wertstoffe) the value is not always proportionate to the Substance. The substance containing the value is greater or smaller than the value of the substance. He has discovered that the value of silver money is twice the value of the silver used in its manufacture. Silver money thus contains value in double concentration, and we have therefore an extract of value. This important discovery gives a quite new insight into the nature of value. It shows that value can be extracted, concentrated and, as it were, separated from its substance.
We may therefore hope that science will at some future date be able to produce chemically pure value. But here again we have a contradiction. In a roundabout way we have reached the theory of a paper-money standard. But this theory is based solely on price and leaves the theory of value severely alone."
Hehe, it seems to me that some people in the cryptocurrency space are precisely trying to produce "cryptographically pure value"...
Anyway, as
Peter R explains the relationship between
the price of BTC and mining investment is very simple: while the costs of mining are lower than the mining reward (which is a function of the price of BTC), more investment in mining equipment is to be expected.
This is not "pulp fiction economics" but simple supply and demand.
From wikipedia:
"If demand increases (demand curve shifts to the right) and supply remains unchanged, a shortage occurs, leading to a higher equilibrium price."
So when miner's cost are lower than the reward price, they get a profit. Profits encourage competition, we know that (also
from wikipedia): "Economic profit does not occur in perfect competition in long run equilibrium". So the explanation of the relationship between BTC price and hashing power is really simple: when prices rise the market produces more hashing power trying to reach an equilibrium.
It has nothing to do with "a law of bitcoin value", with the "intrinsic value" myth or with the phantom that is value.
Just another funny joke from Gesell criticizing Marx, hehehe:
"Marx, whose economic system is founded upon a theory of value, uses almost the same words: "Value is a phantom" - which does not, however, prevent him from attempting to conjure up this phantom in three bulky volumes."
