I don't follow this line of thought.Problem is that Bitcoin was always speculative. It's not a currency. It's simply an asset that people own. They might be able to exchange it for something (unlikely at the moment) so all they can do is buy and sell it just like any other unproductive asset like a limited edition picture.
The breakeven cost is I guess a few cents. That is the minimum of effort that would be necessary to secure the blockchain. Securing the blockchain is no big deal but what Satoshi decreed in the protocol was that a block could only be added every 10 mins. There is a reward in bitcoin (I think currently 12.5 bitcoin) for winning the puzzle race to add the next block to the chain. That is $125K to the winner. So naturally gone are the days when anyone with a home laptop could win the race. The difficulty of winning the puzzle race is automatically adjusted to target that 10 mins objective. With the rewards so high the puzzle has become a staggering trial and error "find the hashkey" task which can only be realistically tackled by mega computing power.Out of curiosity, does anyone know what the breakeven cost of Bitcoin is? At what price, does it stop being cost effective to mine as I would imagine the mining costs are huge.
The breakeven cost is I guess a few cents.
I'm not sure how you balance those two statements. I've heard figures bandied about - I don't have a link to same right now but breakeven is currently a considerable amount. Again this (energy use) is something that will evolve. The addition of level 2 solutions may mean that the mean electricity usage may drop considerably. Otherwise, miners are getting creative and partnering with energy producers who simply waste energy at the point of source (energy that can't go onto the energy network at that time) by co-locating. There are also other crypto's that are not as energy hungry...and perhaps in the future btc may lose ground to them (if mean energy usage doesn't fall back some).The breakeven cost is I guess a few cents. With the rewards so high the puzzle has become a staggering trial and error "find the hashkey" task which can only be realistically tackled by mega computing power.
And it may help Shortie. He has reduced his position and maybe the discussion on AAM has helped him making this decision.
it's not going to convert Shortie or FP or any of the others.
I might undervalue a house at €100k and you might overvalue it at €200k. But it's worth something. Its worth can be estimated by the rent saved over my life-time or some other financial calculation.
I suppose "breakeven" costs needs defining. I take it to mean what is the price of bitcoin that just justifies the mining costs. That depends on two things - the price of bitcoin; the difficulty of the puzzle. They interact with each other. As the price goes up the rewards attract more CPU power, currently far more CPU power than is necessary for the basic purpose of mining - to secure the blockchain. The result is that to achieve the 10 minutes objective the difficulty of the puzzle which secures the blockchain has to be made astronomically greater than is needed for purpose.I'm not sure how you balance those two statements.
Unfortunately you have a habit of misrepresenting my views.
An Elvis Presley Gibson guitar sold for $300k at auction. These guitars are mass produced and retail between€500-€3,000.
Obviously that is the case today. I thought Sunny was trying to get at what price does it become unviable for the miners. The answer is practically never, there just would be less miners with much easier puzzles but they would be capable of securing the blockchain merely on transaction fees. That is how Satoshi planned it.The point I was making is that break even cost is far higher than the few centsyouc alluded to.
I am not representing your views at all.
I am just pointing out that what we say is unlikely to change your views.
A first edition of Ulysses owned by James Joyce may be worth €1m while you can buy a copy for €5 in Easons.
These have associative value. They are often unique.
"Associative value", really?These have associative value.
Brendan
"Bitcoin is worthless. It will return to zero", says something, but also lacks any persuasive argument at this point.
The stated thrust of the article was to demonstrate that bitcoin was rapidly gaining viability as a currency. I'm sorry but a situation where the vendors get rid of the bitcoin as quickly as they might a hot potato and that the main "natural" purchasers were the criminal classes does little to prove the case.I think imaging their reasons is immaterial.
They could accept sea shells for the apartments and that means they've used sea shells as a currency.
That suggests to me that you are not open.
This is simple enough.
I have a bag of hot air in my hand. I saw it's worth $20,000 , I must then show it's worth that.
It is not enough to tell you to disprove it.
Bitcoin is worth nothing. You might be prepared to pay $10,000 for it. But that does not mean that it's worth it.
If people use Bitcoin as a transactional medium, using it as "money"; then that is what it is.maybe it's me but I am finding it rather difficult to get my points across. I presume when sea shells were the chosen currency it was the best available. All conventional currencies have the feature that they are for many the best available for the purpose. I posit that when it comes to bitcoin that (a) a very tiny proportion of transactions are for purchasing goods and services (b) of these transactions very few would be the "natural" choice of currency. The exception might be the criminal classes.
So we can NEVER look to change that? Very open minded.Duke of Marmalade said:Let me explain what I mean by "natural". For a US citizen the natural currency is the dollar, for a UK citizen it is the pound etc.
Thank you - so you're calling me a criminal now. Classy.Duke of Marmalade said:The only natural users of bitcoin would appear to be miners or criminals.
I presumed that the only folk whose main source of income was in bitcoin and who were therefore natural users thereof were miners and criminals. But if your main source of income is bitcoin and you belong to neither class, sincere apologies. Do you mind telling AAM what your main source of income is? I'm truly intrigued.Thank you - so you're calling me a criminal now. Classy.
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