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by imtringued
3100 days ago
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>Bitcoin's value is connected to the costs to continuously mine it and consequently keep the blockchain intact and secure. That's wrong. Bitcoin isn't worth $X because miners are expending $X resources to obtain it.
Miners are expending $X because people are buying bitcoin for $X. Imagine a lottery where the reward is an ounce of gold which is worth $1200. A ticket costs $10. There is a guaranteed winner at the end of the lottery. When the lottery ends a random ticket will be selected and the owner gets the gold. Buying more tickets increases your chance of winning. Therefore participants will try to buy slightly less than $1200 worth of tickets. If the price of gold rises to $2400 people will buy twice as many tickets. The block reward for mining is decreasing on a regular basis. Resources spent on mining will decrease because of lack of profitablity. If bitcoins value is dependent on mining then why isn't it decreasing with every year? |
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