[Cryptography] BitCoin bug reported

[Ben Laurie]

On 15 February 2014 02:02, Patrick Chkoreff <patrick at rayservers.net> wrote:
> Phillip Hallam-Baker wrote, On 02/14/2014 11:33 AM:
>>
>> <stuff>
>>
> You wrote that "the upper limit on the value of a bitcoin is set by the
> cost of electricity to mine it."  That's just not true.  The value of a
> bitcoin can far exceed the cost of the electricity needed to mine it.

Wat? If I'm buying a bitcoin, why would I ever pay more than it would
cost me to mine one?

> You wrote that "the value increases as the difficulty of mining
> increases."  That's just not true.  The value of a bitcoin can fall as
> the difficulty of mining increases.
>
> The cost to produce something and the value of the thing produced are
> two entirely separate quantities, and not necessarily correlated.

This is almost content-free, but what content it has seems wrong. The
upper value of a bitcoin is bounded by the cost to produce it. The
cost of producing a bitcoin is the current difficulty * the cost to
run the latest rig * the number of peope-running-latest-rig
equivalents who are currently mining. Two of these quantities can get
(almost) arbitrarily small. So, the value of a bitcoin can get
arbitrarily small - but not because it is an entirely separate
quantity.