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by yobbo 1473 days ago
Classic confusion about marginal costs.

The price of bitcoin is supported by inflow of "fresh money" from newcomers. If this inflow stopped, for how long would mining continue?
1 comments
cookingrobot 1473 days ago
The price of Bitcoin is not supported by the amount of fresh money coming in. It’s based on the lowest price a current Bitcoin holder is willing to sell for.

If all Bitcoin holders decide tomorrow that it’s worth $200k per coin, then that’s the price, even if there are very few buyers at that price.

It’s like the price of a stock: it’s not dependent on trading volume.

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yobbo 1470 days ago
To be accurate, the equilibrium price is the highest price a buyer is willing to pay, and that someone is willing to sell for.

If the highest price is zero, there is no market, and mining would cease.

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