Re:Why Bitcoin will fail
by imtringued on Sunday December 24, 2017 @03:18PM
(#16001144)
>Bitcoin's value is connected to the costs to continuously mine it and consequently keep the blockchain intact and secure.
That's wrong. Bitcoin isn't worth $X because miners are expending $X resources to obtain it.
Miners are expending $X because people are buying bitcoin for $X.
Imagine a lottery where the reward is an ounce of gold which is worth $1200. A ticket costs $10. There is a guaranteed winner at the end of the lottery. When the lottery ends a random ticket will be selected and the owner gets the gold. Buying more tickets increases your chance of winning. Therefore participants will try to buy slightly less than $1200 worth of tickets. If the price of gold rises to $2400 people will buy twice as many tickets.
The block reward for mining is decreasing on a regular basis. Resources spent on mining will decrease because of lack of profitablity. If bitcoins value is dependent on mining then why isn't it decreasing with every year?
That's wrong. Bitcoin isn't worth $X because miners are expending $X resources to obtain it. Miners are expending $X because people are buying bitcoin for $X.
Imagine a lottery where the reward is an ounce of gold which is worth $1200. A ticket costs $10. There is a guaranteed winner at the end of the lottery. When the lottery ends a random ticket will be selected and the owner gets the gold. Buying more tickets increases your chance of winning. Therefore participants will try to buy slightly less than $1200 worth of tickets. If the price of gold rises to $2400 people will buy twice as many tickets.
The block reward for mining is decreasing on a regular basis. Resources spent on mining will decrease because of lack of profitablity. If bitcoins value is dependent on mining then why isn't it decreasing with every year?