Posted on 08/17/2024 10:25:33 AM PDT by ganeemead
Requiring work to add value: isn’t that Marxist Labor Theory of Value?
It’s how “miners” pretend something is being produced.
With my limited knowledge of Bitcoin and cryptocurrency,, as I understand it,,the Bitcoin mining involves using computer technology to solve different mathematical problems. ,,
And when you have solved the mathematical problems to the satisfaction of the powers that be, your reward is that you have earned Bitcoin. , you are paid in Bitcoin for doing this work.
Anyone with greater knowledge please educate all of us in more detail.
But all of this depends on people recognizing Bitcoin to be a medium of exchange or store of value. If you are earning money in the form of Bitcoin which you can then spend to buy goods and services, I suppose that all makes sense in the world of crypto.
Otherwise it’s just fiat money and they can make as much or as little as they want.
Indeed. It is a way to fake scarcity.
“burns up giant quantities of electricity in what I’d view as an unconscionable manner.“
They pay for the electricity. So fruitcake, why does it shock your conscience?
Make’m do real mining. Probably less polluting.
Because they limit the supply of it to everyone else, thereby doubly jacking up the price?
The scarcity is not fake—there is a finite lnumber of coins which can be mined.
all crypto requires mining. Essentually, you are creating the unique security key which encrypts the block chain associated a given bitcoin. This is an important feature of a crypto currency.
“And when you have solved the mathematical problems to the satisfaction of the powers that be, your reward is that you have earned Bitcoin. , you are paid in Bitcoin for doing this work.”
The “powers that be” actually are the market of buyers and sellers of Bitcoin, and yes the “miners” that run the cryptocurrency server operations for the cryptocurrency transations get paid in Bitcoin when they succcessfully navigate the Bitcoin buying and selling operations (just as banks, brokers and invstment operations get paid in fess for negotiating and handling ivestment buying and selling transactions), but the real money - gain or losses in Bitcoin accrue to the buyers and sellers, not the miners, although the “mining” operations are themselves a lucrative business, as are “wall street” operations.
Well, it is a “virtual (non-tangible), logically-engineered scarcity.”
You mean like: "If a train leaves Chicago at 2 PM heading for New York traveling at 75 MPH, and 23 minutes later another train leaves New York heading for Chicago....."
The white paper on Bitcoin explains ineasy to understand terms why mining is central to ensuring over a hundred years of issuance that culminates in 28m coins. If mining stopped, there would be a quantity never produced. At best there may only be 17m of the 28m total, and not the frequently quoted guess of 21m. It might be as low as 15m. Much of it was lost on old computers and phones no longer in existance.
Yes, mining is the only possible way forward for Bitcoin issuance. In the early days the cost to mine was a factor in valuation.
Today, BTC value will be a combination of mining costs, and what people who own it will exchange it. The world is seeing BTC adoption by ETFs and funds.
BTC will always be worth more than the dollar yesterday, today and in the future. No matter have devaluated the fiat, BTC will not increase in number while money is mass produced.
Brics uses BTC. Individuals use it and hold it. Even Gold is constantly increasing in ounces available.
“But all of this depends on people recognizing Bitcoin to be a medium of exchange or store of value.”
It has been an incredible “store of value”.
The first recorded transaction was 10000 bitcoin for a $41 pizza in 2010. Today those 10000 bitcoins are worth around $600,000,000!
https://www.forbes.com/advisor/investing/cryptocurrency/bitcoin-price-history/
But that is the main reason why bitcoin will never be a real life currency. Because of it’s finite numbers, people would rather hoard it than spend it to buy stuff. Today, hardly anyone uses bitcoins to buy stuff. And as things stand it’ll most likely continue to appreciate.
In order for bitcoin to be a viable currency, its numbers should be allowed to increase by around 3% a year.
It’s the level of money supply growth that a growing economy needs according to Milton Friedman.
https://www.investopedia.com/terms/k/k-percent-rule.asp
What they disagree about is capital.
Current year leftists believe in the Magic Cargo theory of value (no they don't call it that).
There can only ever be 21,000,000 Bitcoin, and 19,000,000 have already been mined, leaving 2,000,000 (10%) to be mined in the future.
That's not "limiting supply."
I was talking about the electricity. If you haven’t noticed, they’ve been clamping down on efficient sources of it while jacking up its uses.
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