Post
Topic
Board Economics
Re: Fundamental Analysis of BTC, is BTC overvalued?
by
picollo7
on 26/05/2011, 17:51:21 UTC
the thing is why are dudes flipping their shit about $9 a month in electricity?



Like I said, my calcs were based on the most efficient computers and at a rate of $.1 per kwh.  So if they have more expensive electricity, and less efficient pcs, then that rate can easily go up by a factor of 10.  Also, bear in mind, that's only for 1 BTC a day, so for people with farms and stuff, that will go up by however many BTC they're generating.

I made the efficiency assumption because the most efficient miners will reap the most profits, so there is a huge incentive for market entrants to be efficient, esp as difficulty increases.

The whole point is that in perfect competition, price equals marginal cost for the most efficient producer.  The BTC mining market is converging toward a perfectly competitive market due to its size and low barrier to entry.  So with all that in mind, the inefficiencies will be competed away.  This is all in the long term, in the short term, who knows?