Quote from: deisik on January 17, 2017, 08:33:45 PM

Quote from: Hammerschmidt on January 17, 2017, 07:02:22 PM

Other than that, no digital currency (Bitcoin or whatever) is backed up by the mining difficulty. It is equal to saying that Bitcoin (for example) is backed up by miners' cost of mining. This is as alluring an approach as it is misleading. Value of anything is backed up by its usefulness alone (otherwise known as utility), and if Bitcoin loses its utility (whatever it might be, speculative or transactional), mining costs will quickly become irrelevant (and ironically, mining difficulty will decrease soon thereafter)

I think this deserves additional thought. If you could purchase a mining rig for $10 that could crank out 1 BTC/day, would it not be safe to say the value of bitcoin would be lower than today? I think this is the case.

Let's now approximate what it would cost to buy such a set of ASIC systems today. Maybe $75,000? $100,000? More?

And if that's the case, would I be foolish to sell the BTC it produces for less than $100,000/that number of bitcoins? That would be below my break even point once you factor in electricity costs.

I think there's no escaping the fact that miners control the supply, and therefore have a very big say in what we pay for BTC.