^^^This guy gets it.
I'm interested in you thoughts on this flow diagram showing economic incentives:
I think the market demands more block space as the amount of mining increases because it is directly proportional to the level of security of the network.
More mining = more security = more demand for Bitcoin as a store of value
Also in your “opportunity cost” remark, it should include the fee rewards, which recently exceeded the block reward, and will likely do so again in the future.
The block reward is the sum of fees (shown as "sats per byte" in the diagram), plus subsidy.
So I'm thinking more about your reply.
You are saying that if lots of energy is being used in mining that makes people more confident in Bitcoin, and therefore adoption increases?
Yes. People are interested in storing their value in secure ways. That is one of Bitcoin’s main value propositions. What makes Bitcoin more secure than everything else is the cost to attack it is insurmountable, due to it’s high hash rate. As the hashrate increases, it’s vulnerability to attack decreases.
In addition to the security gained by high hashrate, the huge and growing investment in mining from entrepreneurs also shows the confidence and commitment to Bitcoin that people have. It is an indication of it’s network effect, it’s staying power. Another good reason to save in bitcoin.
