[Cryptography] BitCoin bug reported

[Jay Sulzberger]

On Sun, 16 Feb 2014, Ben Laurie <ben at links.org> wrote:

> 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?

Division of labor.

Today the cost of producing a bitcoin by mining is, of course,
lower than that bitcoin's "market price".

>
>> 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.

In 2010 two pizzas were bought with 10000 bitcoins.  Today one
bitcoin is worth about $500.

https://bitcointalk.org/index.php?topic=137.0
https://bitcointalk.org/index.php?topic=109.msg5141191#msg5141191
http://www.forbes.com/sites/ericmack/2013/12/23/the-bitcoin-pizza-purchase-thats-worth-7-million-today/

oo--JS.