Scarcity, Value, and CPUs

[c789]

It's an economic principle that almost always holds true: the more scarce something is, the more it is valued. Yes, there are other factors that go into making up the value of something (probably the greatest of the others is demand), but I don't want to get off topic. This is about scarcity, and from all of the hardware on which coins can be mined, which is the most scarce?

I would say that coins that can be mined only on CPUs are greatly undervalued since CPU mining is scarce. We all have CPUs, but most of us either don't use them to mine CPU-only based coins, or our CPUs are not very powerful. Any combination of those reasons still adds up to the same conclusion: CPU mining is scarce. This is a huge driver for value.

I remember almost 2 years ago when I started mining BTC, first on CPUs. Then GPU mining came en force, and people moved to those. The difficulty jumped. Then ASICs came out, and the difficulty jumped exponentially, and it still is doing so. The power of the ASICs keeps growing, and this makes them less scarce. I think one of the reasons why BTC value is staying where it is is because so many people have ASICs. In other words, it's not as scare as it used to be. I know BTC is released at a near-constant rate -- I'm a big fan of BTC, don't get me wrong -- and the difficulty helps to keep this in check, but I don't want to get off topic. This is about the scarcity and potential value of CPU-only coins, which are fairly well-protected against exponential difficult jumps.

You might be thinking, "but CPUs have low hash rates." True, but only relative to GPUs and ASICs. The fact remains: for coins that can be mined only with CPUs, they are inherently scarce, and this makes for great potential value.

Because of this, I firmly believe CPU-only coins will become much more valuable. Your thoughts?

[knightcoin]

the problem with asic is that it's not reusable technology, if your coin breaks you need to throwaway the hardware  ...

[YarkoL]

Scarcity does not always imply potential demand.

For instance underwater cat-juggling videos are pretty hard to find.

[c789]

Scarcity does not always imply potential demand.

For instance underwater cat-juggling videos are pretty hard to find.

...that's why I said "Yes, there are other factors that go into making up the value of something (probably the greatest of the others is demand), but I don't want to get off topic."

Anyway, I'd kinda like to see such a video

[hellscabane]

Scarcity isn't what made Bitcoin as great as it is right now. It was the security of the network that did.

The problem with CPU mining, and frankly GPU mining to an extent, is the threat of bot networks either affecting the value of the coins, or possibly even threatening the network itself. Those threats inherently impact value negatively to a great extent.

[digitalindustry]

Scarcity does not always imply potential demand.

For instance underwater cat-juggling videos are pretty hard to find.

hey, call me, i can hook you up....

** for a price.

[YarkoL]

Scarcity does not always imply potential demand.

For instance underwater cat-juggling videos are pretty hard to find.

Anyway, I'd kinda like to see such a video

Come to think it... so would I. So perhaps that wasn't the best possible example.

But I don't think it was totally off-topic either. Your premise that scarcity of CPU coins implies demand
is IMO fallacious.

Everybody with a computer would be mining CPU coins unless there were something else that
limited their supply. And the limiting factor is, as hellscabane already pointed out, their inherent
lack of security.

[Brangdon]

I know BTC is released at a near-constant rate -- I'm a big fan of BTC, don't get me wrong -- and the difficulty helps to keep this in check, but I don't want to get off topic.

But that near-constant rate renders your topic moot. It means the hardware used for mining doesn't affect scarcity. It only affects distribution.