What determines the price of 1 Bitcoin?

It is the value of the energy used to mine it.

The network itself is paying humanity for the energy needed to be both functional and secure. This value continues to grow in real terms while it drops in relative/nominal terms.

Bitcoin is paying humanity with units of itself, both declaring the value of the network overall and the value of the units within it, in exchange for the value of the energy and time fed into it for functionality and security.

It then revalues itself every 4 years against that energy when it reduces the subsidy by half. The mining network hashrate does not reduce by half to maintain the previous valuation per coin, instead it has doubled against the time and energy input by the mining network every 10 minutes.

Every time the halving occurs, the value of all Bitcoin's is declared worth twice as much time and energy as before. When the hashrate continues to climb after this declaration then we know it is accepted by the market.

This market acceptance has occurred every time and will likely continue to occur due to the fact that nothing else exists that offers direct value in exchange for energy without a middle man creating something to sell first.

Bitcoin turns all sources of electricity into sources of money. The cheaper the electricity is to create, the more money there is to be made. This changes humanities relationship with energy generation, and gives us a way to create abundant energy the likes of which the world has never seen.

Great summarization. Would this possibly lead to Bitcoin becoming a “Paperclip Optimizer”?

https://en.m.wikipedia.org/wiki/Instrumental_convergence

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Discussion

Interesting thought, though it's not likely due to the fact that it requires humans to actually create the energy to give to it.

Bitcoin isn't physical, so it can't destroy our 3 dimensional reality with never ending desire for energy.

The only reason we want energy is to live better lives, but we're also getting better at using energy more efficiently. Things are getting cheaper and quality of life is getting better, all over the planet. It's doubtful that a future humanity that has an abundance of energy, and resources acquired with that energy, will go so far as to destroy itself for more Bitcoin.

Destroying one’s self rarely takes the form one would expect.

2 Low-hanging fruit arguments:

As we increase the amount energy generated, we consume and convert that energy into new forms either intentionally (product) or unintentionally (waste).

Problems with product would look like the excess photons generated by all of the lights, cars, buildings, cities, etc slowly blotting out the night sky, choking the resource of wonder for the universe at large which historically led to most scientific and mathematical discoveries.

Problems with waste would look like all of the excess heat from all power generation or even just power consumption. Every watt turns to heat eventually. So unlimited, cheap energy just means unlimited, cheap heat. That has unknown consequences on a large scale.