Mindrust is likely correct that a lot of bitcoins are being hoarded and that a vast majority were mined below $50.. but so fucking what? His logic is nearly totally screwed in regards to bitcoin's potentially not having value based on those kinds of facts.. They are dumb no coiner claims...
And, also the claims that bitcoin has no utility because a vast majority of coins are not moving and are hoarded is also a stupid ass no coiner argument.
I suggest that the basic fallacy here is evaluating Bitcoin’s value based on the cost of mining. This was raised somewhere earlier in the same general context (sorry, WO n00b here will not dig back through all these fast-moving pages to find it).
As I have been saying on this forum since I was a Newbie (search post history), Bitcoin’s value is
not based on the cost of producing a coin. That is backwards: Miners are incentivized to mine, based on a market value that rises from other factors. Observe that if the market value of Bitcoin were to drop below the cost that can be recovered from mining, then hashpower would surely decrease: Miners could not prop up Bitcoin’s value by spending more on electricity!
Of course, there is a subtle feedback loop between
one of the factors in Bitcoin’s value and the hashrate: The higher the hashrate
(assuming that the total is split between non-colluding independent parties), the more secure Bitcoin is. The more secure Bitcoin is, the better it is for the
usefulness that gives it its real value. But that is not the primary factor; and it is more a matter of effects than causes.
My
Bitcoin Social Phenomenon thread presents my thesis on the true nature of Bitcoin’s value. I mean its long-term real value in terms of fundamentals, not its speculative daytrading value. In short:
Bitcoin is the money that lets you independently control your own funds, store them securely, and transmit them anywhere in the world fast and easily. Both its security and its value are increased by a design that not only assumes it is deployed in a hostile environment between mutually distrusting parties, but actually exploits distrust and competition to encourage both mining and nodes. Bitcoin doesn’t care if its users love each other, or hate each other—it just keeps going, providing a global transaction network that nobody can control.As such, Bitcoin facilitates other economic activity which would be otherwise inconvenient or impossible—Bitcoin’s real value rises thus.Bitcoin was the first money in all of history to have these characteristics; indeed, it
invented its own characteristics. Thereupon, it has organically grown a user base, an established reputation, a decentralized social movement that cannot be duplicated. There is only one Bitcoin, and there can only
be one Bitcoin. The upside is that Bitcoin’s uniqueness makes it all the more valuable—the downside is that if Bitcoin were to fail, we could not just make another Bitcoin.
I don’t think that even Satoshi really understood the value of what he created. Nobody could have. I surely didn’t (which is
why I am not rich).
Bitcoin is
historically significant. Epochal. I do not use those terms lightly: I have too much respect for history, and I detest hype.
Any more questions about what gives Bitcoin its value?
Poll
