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Author: Admin | 2025-04-28
Not rise forever. Research also suggests that the marginal cost of production of a bitcoin is a floor for its value (Hayes 2018).Let's apply some economic thinking to the Bitcoin mining problem. As more bitcoins are being mined, the remaining number will shrink. At the same time, Bitcoin mining will get harder as the transaction ledgers grow in size and the mining algorithm requires more and more proof of work to receive the next bitcoin. In other words, marginal costs of Bitcoin mining are rising. The only way for Bitcoin mining to remain profitable is therefore through rising marginal revenue; that is, a rising price of Bitcoin. Unless the Bitcoin price rises to astronomical levels, the economic logic implies that at some point, marginal costs will exceed marginal revenue. When Bitcoin mining is no longer profitable, it will cease. And with nobody processing transactions, the entire system collapses. The only way for Bitcoin to survive is to become infinitely precious, but if confidence in this ever-growing price bubble weakens, collapse is the only logical outcome.Bitcoin mining cannot defy the laws of economics. One such principle is self-evident: there is no free lunch; someone has to pay for it, even if you don't pay for it yourself. In the case of Bitcoin, someone has to pay for processing these cryptocurrency transactions. Either Bitcoin prices keep on rising faster than the cost of proof-of-work computations or the system implodes. Owners of Bitcoin should be well aware that the entire Bitcoin system is built on quicksand. The decentralized system of Bitcoin makes it impossible to introduce a transaction fee system because of the unlimited potential for free-riding. The way I see it: the inventors of Bitcoin (whoever they may be) should have taken a course in economics first.Should regulators wait until market forces
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