Reality check: Electricity costs related to Bitcoin production do not determine the price of Bitcoin.
I found a research paper which makes the following claims:
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Cryptocurrency relative value formation occurs at the margin
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Relative cost of production is the main determinant for prices
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Electricity consumption is the main cost of production
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Altcoin production is only an intermediary means to Bitcoin production
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Bitcoin price can be described by its cost of production
That's obviously bullshit, right? In my mind, the price of bitcoin comes from supply and demand. The cost of production reflects rational choices made by miners to keep their machines running based upon the demand for bitcoin relative to the miner's supply.
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from Bitcoin - The Currency of the Internet https://ift.tt/2IffQqJ
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