Quote from: franky1 on October 31, 2018, 10:25:20 PM

but to actually be a store. thats based on acquisition and creation cost

Could you elaborate on the theory that production cost is important here? I'm sympathetic to the labor theory of value, but I don't see how it applies to money.

Stores of value are essentially faith-based. Take gold, for instance. The reason it can sustain its value is because the market believes it's a store of value, hence why central banks hedge with it. Central banks don't have gold reserves because of its use in dentistry. If reduced to its actual utility in industry, the market would be tiny by comparison.

In this context, the subjective theory of value seems appropriate. "Value" is what anyone else is willing to pay. If no one is willing to pay the production cost, the price will inevitably fall, and unprofitable miners will be forced out of business. It's the same for Bitcoin as it is for gold -- this is from a few years back:

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Two of the three mining companies currently suspended from the Johannesburg Stock Exchange are going through bankruptcy proceedings. On the Australian Stock Exchange, 31 miners are suspended, of which at least 10 have either been liquidated or have entered so-called voluntary administration, during which a company is assessed for possible liquidation. There are 26 miners currently suspended from the Toronto Stock Exchange's NEX market, a junior exchange with minimal listing requirements.

One of those is Nevada-based Gryphon Gold Corp. In July, the cost increases plaguing the sector caught up with Gryphon, forcing the gold producer, led by industry veteran William Goodhard, to file for bankruptcy.

"Companies are folding all around," said Will Friesen, financial controller at Vancouver-based Sierra Madre Developments Inc. He said Sierra Madre raised cash in March but will seek more by the end of the year. If it can't raise new funds, the firm could lose its claims on the property it is mining.

"And we are one of the lucky ones," Mr. Friesen said.

If price falls low enough for long enough, bankrupt Bitcoin miners will fold just like bankrupt gold miners. At least with Bitcoin, unprofitable miners can be squeezed out of the market, and then difficulty can reset to allow lower mining costs.