Post
Topic
Board Speculation
Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
aminorex
on 13/04/2014, 10:32:25 UTC
the last time I checked,the amortized mining cost of 1 bit coin was 700 dollars using the latest cheapest equipment.   the overwhelming bulk of all coin mining is being done with the latest cheapest equipment, as can be easily inferred from the hash rate graph.

these coins will not be sold for less than $700 I can assure you

That's not really how it works at all. That's basically the sunk cost fallacy and the fallacious labor theory of value merged into one conclusion.

Production costs do not directly cause price. Market price does naturally converge on cost plus a standard economic rate of return given stable demand due to changes in the supply function. But that is not a direct causal relationship to price.

A miner would only rationally hold out for >$700 if he didn't anticipate needing liquidity prior to the expectation of that price arising. The marginal utility of dollars necessarily increases relative to Bitcoin if the miner has a pressing need for dollars.

That was one of the most ludicrous strings of verbiage I have seen since the Sokal/Socialtext affair.  Simple arithmetic refutes you outright.  If I seek anything other than bankruptcy I simply can not sell coins mined today with the most cost-effective hashing hardware in the known universe for less than 700.  If I am not holding my only rational choice is to sell the hardware to someone who will.