Re: Fundamental Analysis of BTC, is BTC overvalued?

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By your definition the dollar is worth nothing. Absolutely nothing. Too bad it's not true.

The argument is dubious.

*sigh*

No, a dollar is worth exactly the amount of work you put in to earn it, it is also worth the amount of goods you can trade it for. The underlying value of the dollar, and any currency, is the amount of work you will spend to earn it. Currently, the work for a BTC is the electricity input. You don't do anything to mine BTC, your GPU does.

So, a bitcoin that I mine is worth the cost of the electricity used to find it (production cost). But, a dollar isn't worth the cost of the paper it is printed on (production cost), it is worth the amount of effort that I put into getting it from someone else (exchange cost).

Why is a bitcoin valued at the cost of production, while the dollar is valued at the exchange cost?

A dollar IS valued at the cost of production. How do you produce a dollar? You work for it. How do you produce a BTC? You work for it (mine it). The difference is that with a dollar, you personally spend your time and effort, and with a BTC, you spend electricity. They both SHOULD be valued on production, but BTC clearly is not.

My work creates dollars? Well shit, does that mean the Secret Service is going to come after me? Because I'm pretty sure they think that dollars are printed by the Bureau of Printing and Engraving.

Or, if you expand the notion of "dollar" to include checkbook money (accounts in a database) then a little research will easily demonstrate to you that electronic dollars are created out of thin air by bankers.

Ok, if you want to get into monetary policy, then sure, the Fed is responsible for the amount of circulation. They increase or decrease the amount based on a number of factors, but ultimately the GDP, i.e. the collective work of the US. So yeah, your work creates dollars.