Bitcoins have non-speculative value, don't they?

[edgycorner]

if the price falls too low then selling would slow down

I don't think it's that black and white, a drop in price could easily accelerate selling. Thus creating more supply than demand itself. This is why it has never been this easy to predict bitcoin's price.

As for bitcoin's cost of production, it has almost no effect on the price or circulation imo
19 million bitcoins are already minted, that's enough to keep the circulation moving.

There have been many instances where mining is not profitable, but people still do mine. They don't lose faith in the market. Whatever they are mining today, will be sold in the future at a better price.

At some point, it does become more convenient to buy bitcoins with fiat directly rather than through an electricity bill. This is where small miners sell their rigs and move on. But big miners will keep on grinding solely because of their faith in bitcoin.

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[franky1]

if the price falls too low then selling would slow down

I don't think it's that black and white, a drop in price could easily accelerate selling. Thus creating more supply than demand itself. This is why it has never been this easy to predict bitcoin's price.

As for bitcoin's cost of production, it has almost no effect on the price or circulation imo
19 million bitcoins are already minted, that's enough to keep the circulation moving.

There have been many instances where mining is not profitable, but people still do mine. They don't lose faith in the market. Whatever they are mining today, will be sold in the future at a better price.

At some point, it does become more convenient to buy bitcoins with fiat directly rather than through an electricity bill. This is where small miners sell their rigs and move on. But big miners will keep on grinding solely because of their faith in bitcoin.

the PRICE has some control from mining wher mining sets the window of expectation the price sits within. (im not talking about daily whimsy of PRICE being what mining affects. im talking about the min-max ultimates of MINING affects that where prices sit within where ever they are)
if you find the bottom underlying value.. and also the most expensive mining on the planet. you find the window..

call that a values window..
for demo purpose only.. lets take a 2021 demo window of $15k $70k(ultimate mining bottom and top(demo number))
people in japan(most highest energy cost. would and could mine at $70k. but then so could everyone else (everyone else has cheaper mining costs than japan)
meaning if the price went over $70k people wouldnt hype by buying it anymore, because everyone on the planet including inefficient miners could mine it for less.
and thats why the PRICE dried up of buy orders above $70k

it never reached $100k because it was never expected to if you find the window

if people can acquire it for less then the price. why would they buy it when they can acquire it for less.
and now you see why the PRICE topped out at $70k even while people said $100k..

same with the bottom if no one can acquire it below say $15k then no one will be able to get it for less but if the price was down that low lots of people would want to buy it because they are many people with higher mining costs so its cheaper to buy..
so when it reaches the bottom the cheapest acquirers wont sell for a loss. so the sells drop out.
and the strong buyers keep buying to make the prices stay/rise again
..
as for the speculation of the other stuff quoted

shorting is a thing.
if enough people think the price can shift down further.. they will be their own cause of it.. by shorting
they become the new sellers risking a loss to hope they can buy in cheaper..
idiots can be idiots and so they dont always win. but they can try and this can cause a very temporary and unexpected temporary drop below expectation..

as for the "mining is not always profitable but people still do mine"
you have to forget the idea that everyone mines at the same cost..
everyone is not mining at the same bottomline cost. where everyone loses.
forget a scenario where everyone mines at same cost where some mine for years at continual loss. thats just not how logic/business/savvi investors work..

however.. people that remain are the most efficient costs.. they are the last ones to give up..they are the ones still winning..
but the more expensive miners giving up first and when they do, they give a bigger reward slice of a block to the remainers. more coin for the same work load of efficient miners =more profit for the remainers. even when the price is down. the remainers win more.

the ones that dropped off because the price is lower then their higher cost. then see the market price then becomes their discount ground to get coin..(cheaper to buy than mine).. they then help by being buyers instead of sellers and they push the price up or keep it from pulling down

[tadamichi]

all the whimsy of lots of different idea's(plural) above that number is the speculative stuff., of values(plural)

I disagree, if there was no profit margins, there would also be no incentive to work or to create anything. Who doesn’t wanna get paid for their work? It is not speculative, for a metal your definition might work fine, but for other things not so much. The market matters too, you can’t fully explain it away. Because optimising the production costs of something, doesn’t make it worth less. Especially if the other market participants couldn’t catch up yet. And just producing expensively doesn’t determine high value.

People can be forced to sell at losses, if their product doesn’t satisfy the market. If i build an ugly, slow, ultra expensive car by hand, that isn’t better than an average new car, but costs 10 times more. No one will buy this, and it doesn’t matter how much it cost me produce, with running costs it will force me to keep lowering the price until the market is fine with it. The market is like an reality check, to see if it was really worth that much in that moment in time.

Production costs alone are not value, they’re just production costs. Also miners aren’t the only people selling Bitcoin on the market, with your theory you can’t explain what the other participants are doing. The natural bottom set by production costs can be broken if the good looses its demand. If it’s like gold or bitcoin this theory might work fine enough, because they’re highly in demand. Also with gold or bitcoin you have something relatively fungible, but for products that are completely different from each other, it gets harder and harder to determine the underlying value, it’s definitely not set by production costs in these cases.

And we didn’t even get into the point BlackHatCoiner made yet, which i think is important.

[BlackHatCoiner]

PRICE is the market..

Price is the market value.

if you avoid saying "market value" and say "market price" you gain one step forward in understanding.

There's no "market price", I've never heard of this term. Price is how it's valuated in the market, ergo market value.

then realise you cant see the VALUE on the market order book.. its beneath the price you see..

"VALUE" is vague. Explain yourself. There's market, personal, intrinsic value etc.

gold and bitcoin have a underlying value.. the lowest anyone can mine for. in both

But, it isn't fixed for bitcoin, that's the difference. If demand drops by a lot, so will the "underlying value" which makes it therefore non-underlying or just unessential measure.

[franky1]

to blackhatcoiner
i have already explained to you and other readers that YOUR confusing of the 3 words "value" "values" and "prices" is your misunderstanding of trying to deem them as  the same thing. they are not the same thing. now go separate them in your own mindset.

i find it funny that your even trolling to say you have never heard of the word "price" in your life.. but hey. you do make me laugh

one thing i will agree with you is that while you can only see the market, you think its al speculative. that is correct. but that does not mean that there is not a intrinsic value below your narrow mind view of only looking at the market.

have a cup of coffee and take some time to think beyond the randomness of speculation zone you have focused on


to tadamichi
one more time. this time with emphasis

the underlying bottom number is not the number that everyone has a cost at .. as they all have different ideals, price points and values((plural)sentiments(not to be confused with value)) of their desires and demands..

those with higher costs.. stop mining at their level.. but that just helps out the others with lower costs that remain..

all that variable stuff of different costs and price points is the speculation layer ABOVE.

here is a game for you
calculate the cheapest asic you can buy. the most efficient. calculate its energy cost to mine at the cheapest available electric in a region that can cope with mining. find the luckiest hashrate of a period to have the lowest mining cost on the planet!!

then take another number  for the highest energy cost of the most reasonable asic thats not as efficient but not stupidly inefficient that no one makes profit over(the cut off point of inefficiency.) and use that as another number

lets for demonstration sake to save you time call it a $15k to $70k window of 2021

now go find a random number generator and produce as many variable price points between all this as you like. give them all of your wonderful idea's of pricepoints each have, like an american residential hobby miners higher price point than a kazakhstan efficient price point. designate some of them random numbers as the buyers with different ideals sentiments, desires, demands for their price points..
have some fun trying to figure out all the variables of the market speculation of different people.
designate others where some are making profit and some are not currently so given up the idea of selling and found their "hoard and hope personal pricepoint they wont sell below
 
once you waste hours having fun with all that.. here is the thing you need to do.
forget all the thousands of dots you have scattered around. and look at the lowest number you can find..
 if you are then seeing another number below that.. the forget the first low you found and use only the actual low you have.

emphasize your mindset to that lowest value point you can find
and thats the number im talking about..

so for emphasis.
stop looking at a market chart.. you will not find the UNDERLYING value on a market chart. sorry just no, its not there.
the market chart is the sentiment layer of speculation above value.

.. everyone has their own personal pricepoints and sentiments of their values(demands desires, views on the values(features and benefits)) but the underlying value. is at the bottom of all that


when everything is good, everyone is positive everyones making profit and buyers are really demanding it, the PRICE is high and the price is a big gap away(higher) then the underlying value.. people call these the bubble events where the price is very very premium and highly speculative above value

when things are negative and people dont see the benefits and demand isnt there and some higher cost miners are making losses and give up. to instead maybe just wait.. or(insert variable)
the market price declines back closer to the underlying value.
but that underlying value is still not the days closing low or the hourly dip.
the underlying sits below all that. so dont try talking about market price stuff when trying to find the underlying value. its a separate number at the bottom away from the active price

if you are finding many variables of different peoples personal price points of wanting to buy or sell, any variable,, then you have not found the bottom.
the bottom is the bottom, the under number, the bottom, they beneath number, under beneath bottom under beneath bottom, where all are unwilling to sell below because they would rather hoard and hope. rather then sell

and no im not talking about some guy with middle range hoard and hope costs where you then try to show another guy whos number is below that to say that im wrong..
if your finding another number below any number your thinking of.. take the BOTTOM number. the ultimate bottom number of all speculative assumptions.
find the bottom number of al variables and you have the underlying number

...
maybe people need a visual demonstration

this chart below is NOT, i repeat and emphasise NOT made where the orange and grey lines are metrics of anything to do with market price data.

no market price data has influenced the orange and grey number at all
its purely the most cheapest mining cost on the planet(orange) and the most expensive mining cost on the planet(grey)

the chart below that.. then and only then puts the market price(blue) into the chart. for a visual aid

and you start to see..
the price does not go above the top and it doesnt hit the bottom.

the underlying bottom(orange) is below all the sentiment of individuals different buy/sell price points of the markets whimsy

whilst some people want to talk about the whimsy, variable, speculative stuff of the market price and all the variable sentiments of features utility desire and demand of emotional choices of randomness each person has compared to other people..
this topic title is about none of that.
its about the underlying "monetary value" in of itself

i get all your speaches about the randomness of different peoples ideals. and the variances. but get to the bottom of your examples. and you will find what is actually being asked by the topic creator

[yhiaali3]

In my opinion, the cost of bitcoin mining determines the minimum price of bitcoin and not the existing price, because we have seen the rise of bitcoin to the price of  70,000$ per bitcoin while the cost of mining is much lower, also the bitcoin fell to about  3000$ earlier while the cost of mining more than that, so If the cost of mining bitcoin costs about $20,000 for example, and the price of bitcoin is lower than this figure, the miners will not sell their bitcoin for less than the cost price, but rather they will store it waiting for the price to rise, this will lead to less supply and higher prices.
But if the opposite happens and the price of bitcoin is much more than the cost of mining, miners will sell all their bitcoins, thus increasing the supply and lowering prices.

[tadamichi]

i get all your speaches about the randomness of different peoples ideals. and the variances. but get to the bottom of your examples. and you will find what is actually being asked by the topic creator

You have a point about some resistance of bottom price levels, in theory it could break, but in practice its usable for now. If you wanna call it underlying value personally its fine to me, for me its production costs. It will be interesting to see how this effect plays out as less/ no new Bitcoin will be produced, and when one day things are possibly paid and accounted for in satoshis.

The mechanism being that if the price falls too low then gold mining would slow down in response and supply would decrease therefore increasing price.

But this specific part isnt happening in Bitcoin, because the supply is perfectly inelastic(its the same no matter how much mining is done) and we have difficulty adjustements(less miners, easier mining). Leading to much more volatility than gold.

I suppose a simpler way to ask my question would be this: If (according to the book I'm reading) the fact that there are real monetary costs associated with "producing" gold means that there is a kind of "parachute" that helps to prevent its price from falling too low, then why doesn't the electricity cost of mining blocks have exactly the same effect on bitcoin?

If the price falls too low, it would make mining easier again(if many miners had to stop), meaning old cheap machines could be profitable again/ and asics will get cheaper(if bankrupt miners are selling), bringing the bottom down. It all depends for how long this is happening, in practice the demand is strong, so bottoms are probably holding around the levels franky described for some time. Also its hard to realiably find bottoms for energy prices, because its possible to get electricity for 0 cents or even getting paid for using energy(ik crazy).

Its based on demand, because without demand the costs to produce new Blocks could come closer to 0 again, if this spiral goes on for long enough(if the mining difficulty reaches 1). We essentially saw this when Bitcoin started and people were just giving Bitcoins out for free, the difficulty increases with demand over time, making mining more and more costly and building some temporary resitances on the bottom price. After this theory Bitcoin didnt have an underlying value once, so how did it even start to increase? Without demand the underlying value could have never increased as there would be no new miners.

[franky1]

Its based on demand, because without demand the costs to produce new Blocks could come closer to 0 again, if this spiral goes on for long enough(if the mining difficulty reaches 1). We essentially saw this when Bitcoin started and people were just giving Bitcoins out for free, the difficulty increases with demand over time, making mining more and more costly and building some temporary resitances on the bottom price. After this theory Bitcoin didnt have an underlying value once, so how did it even start to increase? Without demand the underlying value could have never increased as there would be no new miners.

your still mentioning price and markets. even when using examples of an era when there were no markets..
.. please put the market price talks to the side, lock it in a box hide it under your bed and dont think about it for a while..
value is not the market stuff..

lets explain, (maybe 12th time lucky) you(many readers) might get the idea to not think about "price" (not a personal attack against one person, many are still price obsessed)

anyways
back in those days of "when bitcoin started".. there was no "market" so again forget about any market price metrics or buzzwords you want to insert when describing value and values.
get back to basics

even when there was 1 person mining in january 2009 and a week later 2 people the economic value was low. it was passive. they were using their computer anyway so the cost was so negligible they were not thinking about it, but the cost was there. but because it was negligible they didnt see it in a big neon sign

the features and benefits spoke for themselves or atleast intrigued people to want to try bitcoin to see if it really did what the white paper said it did..
this demand was on the nerdy features mainly. with a little bit of the economic stuff about deflationary. but not price based..

the demand aspect of values(plural) was not price based nor economic number(value). again there was no market in those days.. it was desire and seeing the sentiment of utility/function and the intrigue of trying it to see if it really did work,  that gave people the desire to need or want to grab some to use it
well thats one layer ABOVE of the economic value that has a cost..(mining cost)

where the cost+demand then introduced the opportunity to sell on the eventual markets that came later.

so again
the desire based on the utility, features, benefits, fascination.. then commanded the rise in the demand. is the values(sentiments of utility/features/benefits) (not the value) (not the price)

ok maybe easier explained if seen in the form of layers..
lets start building the layers (bottom up.. bottom  does change but is more stable slow movements where the higher you go up the layers the more variables and random and volatile things get)

5 price
4 speculation
3 demand
2 values(sentiments of desires, features benefits)
1 VALUE(cost)

heck you can even think of them as separate groups which might help people see the reactions of one end effect the other depending on the net effects of each group
EG 543      432      321
where 3 can effect 1(rise or drop of 1) but 5 does not directly affect 1
where 3 can affect 4 and 5. but not affect 1 to the same scale/amount

some may be asking where is "supply", the answer is in the 2 category of the features and benefits
some may not like the order of the layers. and well thats for another discussion. but atleast get passed the concept of "price=value" or "demand=value" first. then the conversations can get more interesting/productive
..
values(sentiment) change. like in 2010 its values(sentiment/features benefit) were nerdy reasons and such. these days its values are more about the features offering investment and deflationary and more of a greed of potential riches stuff.. and not so much about the nerdy stuff anymore

but these sentiments of desires of features/utility are values (but not the economic value)
its these values that help push the demand

which is why for multiple posts i have been trying to get people to realise the difference between price value and values

underlying value. is PART of the intrinsic wait for it  "values"(plural) as are the utility and function stuff.
but some people when speaking of an intrinsic value(singular). they are looking for a economic number of value(underlying cost). which bitcoin is backed by(preventing a 'down to zero by midnight) without needing to be pegged by something else.

other people looking for intrinsic values are looking for the features/utility unique to bitcoin which give bitcoin the demand and desire to have and use it.

..
i hope people can start to see the different layers and are no longer just seeing the "price" as being the "value" and "values"

as to a few people that do see price as "value"
maybe you have never seen words like "cheap" "expensive"
cheap is when the price is near value.. expensive is when price is premium, far above and far away from value.

the price is not value. and it helps you in the world to not see the price even when stupidly high being "value" because thats when you have the most chance of losing

so learn to find value at the bottom. not the top. it may save you some money when buying anything when you find the value and then look and see if the price is near value or if the price is expensive and at a premium far above value, it helps you make good economic/finances decisions.

by seeing value at the bottom. you see the layers. and you see all the things that build up from it to finally get to a price on the top layer. and you start to see all the buffers inbetween that need to break to affect the underlying value. where you begin to appreciate the buffers inbetween and can start to then analyse better how each of the buffers affect each other whereby it affects the PRICE quick and volatile and random.. where as it affects the underlying value slow and progressively.

yes the underlying value can do down. but once you understand all the layers to start to see the value is not hit by price instantly when there is a price crash. you may start to see the finer details inbetween play out. where
things like less hash competition gives more slice of reward to the remaining miners thus raising their profits allowing them to many mine more and have more costs because they can afford it even when the price is in a decline.
yep some very efficient miners mine more when they get more coin due to les competition. yep it happens more often then you think

anyways
good luck
i hope all readers of these posts can atleast look beyond the PRICE and start to see the layers beneath, which build up the value and values that build up the sentiments of desire, where (from bottom up) the variables get more widespread and the speculation as you go through all the layers builds up more speculation which affect a price depending on how much speculation and sentiment there is and how wide it is when everything is super positive in demand and happy. and when speculation is less when there are negatives and not as many happy demand and sentiment

[RealMalatesta]

In my opinion, the cost of bitcoin mining determines the minimum price of bitcoin and not the existing price, because we have seen the rise of bitcoin to the price of  70,000$ per bitcoin while the cost of mining is much lower, also the bitcoin fell to about  3000$ earlier while the cost of mining more than that, so If the cost of mining bitcoin costs about $20,000 for example, and the price of bitcoin is lower than this figure, the miners will not sell their bitcoin for less than the cost price, but rather they will store it waiting for the price to rise, this will lead to less supply and higher prices.
But if the opposite happens and the price of bitcoin is much more than the cost of mining, miners will sell all their bitcoins, thus increasing the supply and lowering prices.

That is not the case, it drops under the cost of mining one bitcoin, it has happened before and it will happen again. What we need to focus on right now is to get it done by no intrinsic value but just market value. Which means that whatever you and I think it should worth, is the price and that is the value of bitcoin. Sure it is not just you and me but it is the general public and the investors.

If we think it's overvalued then we sell and the price goes down, if we believe it's undervalued then it goes up and that is why we decide what the price should be and we decide what the value is. That's why there is nothing wrong with the current situation.

[franky1]

In my opinion, the cost of bitcoin mining determines the minimum price of bitcoin and not the existing price, because we have seen the rise of bitcoin to the price of  70,000$ per bitcoin while the cost of mining is much lower, also the bitcoin fell to about  3000$ earlier while the cost of mining more than that, so If the cost of mining bitcoin costs about $20,000 for example, and the price of bitcoin is lower than this figure, the miners will not sell their bitcoin for less than the cost price, but rather they will store it waiting for the price to rise, this will lead to less supply and higher prices.
But if the opposite happens and the price of bitcoin is much more than the cost of mining, miners will sell all their bitcoins, thus increasing the supply and lowering prices.

That is not the case, it drops under the cost of mining one bitcoin, it has happened before and it will happen again. What we need to focus on right now is to get it done by no intrinsic value but just market value. Which means that whatever you and I think it should worth, is the price and that is the value of bitcoin. Sure it is not just you and me but it is the general public and the investors.

If we think it's overvalued then we sell and the price goes down, if we believe it's undervalued then it goes up and that is why we decide what the price should be and we decide what the value is. That's why there is nothing wrong with the current situation.

a person in japan has a mining cost this week of $9Xk and sees the market price as $20k so sees it PERSONALLY in their unique sentiment as being super cheap. but this is part of their personal sentiment. their personal speculative price point desire

a person in kazakhstan has a mining cost this week of $1Xk and sees the market price as $20k so sees it PERSONALLY in their unique sentiment as being profitable and a premium where they personally prefer to mine to sell rather then buy.

but thats the personal whims of speculation. all the randomness of different people.
these pesonal unique different price points different people desire and hope and want. are all the speculation. there are variable and volatile. thats the market..

the underlying(under, bottom) is the point no one wants to sell below. thats the UNDERlying value below the market

.. the market price is not the value. because many people have many different idea's. there are many layers where some can mine and profit and some cant and prefer to buy. thats the speculation..

the underlying is when you get through all the different variables and find the most basic lowest wall of the bottom point where the variables are all above it. thats the bottom, the underlying