Replying to Avatar TheBitcoinBattery

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.
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AncapAnon - Activate OP_GFY now! 1y ago 💬 1

No, no, no! This is the cost-of-production theory of value, pure economic fallacy and the predecessor to marxism. The value of 1 Bitcoin is not determined by the value of the electricity used to mine it. The price of 1 bitcoin is a function of the subjective valuations of buyers and sellers of bitcoin. Miners expend energy to bid for bitcoins in the expectation of profit, but may run at a loss if the energy costs are higher than the value of the bitcoin they mine.

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TheBitcoinBattery 1y ago 💬 1

Hey! Thanks for the counterargument, without being able to defend our position how are we to really determine the correct position to hold? Appreciate you.

You are correct, the value is subjective.

Although the value of everything is subjective. There's subjective value in products that are created, which represents the subjective value of the time and energy used to create them that is saved by buyers who don't make the products themselves.

Bitcoin itself is trading coins for energy, the amount of energy given has subjective value that is exchanged for the coins given in return.

The energy given to Bitcoin is mostly energy that has no other buyer, and without Bitcoin has no value as waste energy. The fascinating thing is because the energy has no other buyer it has no value other than what Bitcoin offers for it. Two things with otherwise no value, give value to each other.