Comment: FYI

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FYI

Looking at the comments of bitcoin users today, I notice quiet a few are talking about a natural price floor at the cost of production (i.e. the hardware and electricity needed to "mine" bitcoins). There's a problem with this logic though: cost of production is only a floor if there's demand!

For example, the cost of production of a sailboat made of cream cheese is probably quit high, but it still has a price of $0 because no one wants a sailboat made of cream cheese. Likewise, no one wants bitcoins as such, they have no end-use demand. They have only speculative demand, and so the cost of production is quiet irrelevant. The natural price floor for a bitcoin is $0.00.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."