I’m contemplating it as a thought experiment. I think the price of btc would stay the same while the price of gold (and other commodities) would decrease
Discussion
Ooh. I don’t think so. I think the price in that thought experiment would plummet with everything else.
Bitcoin still operates in this world, and that magnitude of price decrease would shake everything up. Certainly including bitcoin.
Let’s push this further toward the theoretical extreme.
Suppose energy became one million times cheaper (and thus people could turn on a million times more miners—a million times the current hashrate for the same electricity cost).
The difficulty would simply adjust to make it a million times harder to find a block. So why would the price plummet if the supply stays the same?
Because the price of everything else would dump, and bitcoin just measures “everything else”
Would take a LOOOOONG time for a Jevon’s paradox of that magnitude to rebalance
> In economics, the Jevons paradox occurs when technological progress increases the efficiency with which a resource is used (reducing the amount necessary for any one use), but the falling cost of use induces increases in demand enough that resource use is increased, rather than reduced.
Jevon's paradox is interesting, I had never heard of that before. But if I understand correctly, it only applies to consumable resources right?
The reason I'm saying the price of btc would stay the same is because the supply would stay the same (i.e. it cannot be consumed, nor can it be produced faster due to the difficulty adjustment)
Yes the *purchasing power* of btc would massively increase (due to the falling price of every other non-difficultly-adjusted commodity) but the price would stay the same (ok well it might actually increase in nominal terms because people have more disposable income due to their real expenses being reduced)
At some point, cheap energy pushes the price of gold to zero doesn’t it? They already know how to manufactured I’ve heard.
In the theoretical extreme where humans could go and mine asteroids after exhausting the terrestrial supply, yes
“While creating gold in a lab is scientifically possible, it could be more practical. The energy cost to run a particle accelerator is enormous, and the amount of gold produced is minuscule. At current energy prices, producing just one ounce of gold costs billions of dollars. As such, extracting gold from natural sources is much more efficient.”
Haha yeah I wonder if anyone has done the math on that, like how low would the cost of energy actually have to be to make transmutation economically viable? Are we talking like a Dyson sphere?