One thing that concerns me is how people are calculating how much it costs to generate a Bitcoin. For instance, NewLibertyStandard has determined the value by  "the yearly average of the bitcoins generated per day divided by the yearly average of the amount of dollars spent per day on Internet and electricity or (bitcoins generated)/(cost of bitcoins)."

Well, you see there is a few problems with this:

1. When you determine the bandwidth required to generate a Bitcoin, it is very little. The monthly cost of paying for internet service inflates the value especially when not all of the bandwidth is dedicated to making coins. One should determine the average cost of an American kilobyte plus how many kilobytes it takes to generate a Bitcoin.

2. You can't judge the electricity used to generate a Bitcoin based on how much power the whole computer using since it's doing other things besides making coins. The computer is only using a bit of the CPU power and basic system components to generate Bitcoins. Additional hardware such as optical drives and powerful graphics cards will skew this if their power is counted as well. There should be a definite number of how much CPU/Mobo/Memory (ALONE) power is used to generate a Bitcoin. A separate minimalistic machine should be used for calculating exchange rates.

I don't know if NewLibertyStandard is considering these factors but it's just a heads up. I might start my own exchange and base it on the minimum resources required to generate a bitcoin, for the sake of accuracy.

Just my 2 cents. Your thoughts? Am I wrong?