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Do Miners Push Up Production Cost of Bitcoin?
513 sats \ 5 comments \ @spiderman 14h bitcoin
So, I asked (this question)[#1015805] a while back, and could get an answer. Since then I thought and read a bit about it. And this is a hypothesis (which may be incorrect, or may be obvious to some).
As the block subsidies are independent of the number of miners (hence, the rate of new bitcoin production), more miners mean globally more energy spent mining each block, hence it raises the production cost of Bitcoin?
Do miners sell their Bitcoin to the exchanges or use the coins to buy stuff? Does higher production cost (measured in energy) mean the miners will command a higher fiat price, ceteris paribus? I am curious how does the economics of it works, and how the supply side influences Bitcoin pricing.
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79 sats \ 1 reply \ @nullcount 11h
Mining with expensive electricity and inefficient machines does NOT make the sats you mine worth more in fiat terms.
More energy spent on mining means more energy is being harnessed in the first place. Bitcoin is a game that tricks humans into accelerating their path to energy prosperity.
Even after the subsidy is all gone, bitcoin still needs miners to give their energy for the system to function. So can you really count the energy spent today as "production costs"?
Miners had a larger effect on supply in the early years, but today, over 90% of the sats are already in circulation and miners have more options to finance their operation than just selling BTC.
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11 sats \ 0 replies \ @spiderman OP 10h
I did not mean the inefficiency of my personal mining setup makes my sats fetch more.
This is what I mean.
If a new miner joins a pool, he consumes his share of energy, which is not-zero even with the most efficient hardware and cooling agents imaginable.
But total sats mined globally (per day) remains fixed.
Assuming the operations of the old miners remain the same, kWH per BTC (global energy consumption dedicated to mining divided by coins mined) is higher than it was before the new miner joined.
And this is what I mean by each bitcoin costs more in terms of energy. Is my reasoning correct?
And if so, does it also impact how much do those miners (each seeing smaller yield) sell their coins for, again, ceteris paribus?
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11 sats \ 1 reply \ @hasherstacker 10h
Hard times create strong men. Strong men create good times. Good times create weak men. Weak men create hard times.
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0 sats \ 0 replies \ @Bell_curve 9h
find and replace "men" with "miners"
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0 sats \ 0 replies \ @Bell_curve 9h
This should be in the bitcoin mining territory
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