If everyone were to get excited about Monopoly money as a store of value, it would be wrong to tell you that you fail to see the huge potential. The crowd decided that bitcoin is worth something, and thus it is worth something. That doesn't make you wrong for not being part of the crowd.
Today Elon Musk chooses BTC and it goes up. Tomorrow the US government could crack down on BTC and it could go down. Maybe a technical weakness arises. Maybe the dollar breaks and it goes to a million. That doesn't mean it has potential, nor that it's useful. It just means there's uptake.
> doesn't mean it has potential, nor that it's useful. It just means there's uptake.
This is a bit nihilistic. Bitcoin’s value has reallocated a huge amount of technical talent and resources in the global economy. It also has a growing carbon footprint. These give the public, and by extension its members, legitimate exposure to its downsides. Given that exposure, it’s valid to consider managing it.
So you determine the inherent value of something based on its price action?
To flesh this out: I'm not arguing that BTC has no value, nor that it has no externalities, so I really don't understand what motivates your reply. I don't feel that there's anything nihilistic about pointing out the logical flaw in saying, "oh the concept of Bitcoin has 12% more inherent value now than yesterday because the price went up by that much." I recognize that the article is about electricity, but I'm not sure how you get from my comment to electricity. If Bitcoin crashes tomorrow, does that mean that the inherent value (or conversely, the societal burden) of the concept went down?
Sure, and the cost to Hasbro of making monopoly money could scale with its price if there were a market for it. But the inherent value of a monopoly dollar would not be dependent upon that cost.
When you say "the broader cost of bitcoin" you're talking about electricity right? Aside from the important fact that "cost" isn't "value", there are a couple problems with that. First of all, many people are finding arbs in energy (eg, you live or work in a dorm, lab, or other building where don't pay an electric bill) and using free electricity to mine. That provides liquidity/fungibility by contributing to transactions, without incurring any cost to the miner. Second, people and entities with large early reserves of bitcoin have an incentive to mine even when the energy cost is greater than the mining return, because a better functioning bitcoin is more likely to attract further inflows that impact the price upward.
Today Elon Musk chooses BTC and it goes up. Tomorrow the US government could crack down on BTC and it could go down. Maybe a technical weakness arises. Maybe the dollar breaks and it goes to a million. That doesn't mean it has potential, nor that it's useful. It just means there's uptake.