Item — HN Reader

"While there is no logical reason to suppose that bitcoin should have the same value as gold, if it did, each bitcoin should be worth approximately $285,000, 45 times the current market price. As such, one might wonder: is bitcoin still vastly undervalued even after a 6,000,000% rally?"

Only if btc's total worth equates gold's. Which is a possibility, for better or for worse

1 comments

Yes but we don't have to industrialise the asteroid belt to dump equivalent quantities of crypto-currency into the market ...

Bitcoin is currently using 0.12% of the world's electricity production -- enough to power 2 million homes.

That figure sounds outrageous. I had to check for myself.

According to an IEEE article[0], bitcoin's power usage is at around 1 Gigawatt. In 2012, Wikipedia[1] tells me that the global electricity usage was around 20,000 Terawatt hours, which makes an average power of around 2,000 Gigawatts. We can assume this has increased somewhat since then - the growth rates suggest annual consumption would be a few thousand Terawatt hours greater by now.

So the 2012 figures give us around 0.05% of electricity consumption being used by bitcoin. While this runs a little shy of your figure, and current values may be somewhat lower still, I'm really surprised at just how power intensive the whole endeavour is.

[0] https://spectrum.ieee.org/energy/policy/the-ridiculous-amoun...

[1] https://en.wikipedia.org/wiki/Electric_energy_consumption

which helps mines roughly 7,740,000 USD worth of new bitcoins per day, I'm not sure how sustainable this is.

I ask myself: is there a limit for a drawdown without return in bitcoins? - as in, if the value goes under a certain threshold, it's not profitable any more to "mine it up" again and the blockchain falls dry... or could they just lower the difficulty of mining in order to prevent that?

The Bitcoin network cannot know or should it care about a fiat exchange rate. Which currency should it look at? Dollar? Euro? Why? If the block frequency of ten minutes is not met, the difficulty is automatically adjusted after 2016 blocks (ca. 2 weeks) up or down.

I think miners have to know and care about a fiat exchange rate, at least until electricity can be paid for in BTC. So that's where I thought a threshold for miners running their equipment without losing money might come from - and thus a never-come-back dropdown limit. I really don't know, just curious. But probably automatic adjustment takes care of this, as you said.

“Crypto-currency” isn’t the same as Bitcoin in particular. You can’t dump more bitcoin into the market; it’s fixed-supply.

Depends on how much value you place on the trademark. We already split the miners once.