Earlier quoted context omitted.
You explained exactly what the intrinsic value of the currency is: the usefulness of the currency itself. BTCs have value over turds for use as a currency for many obvious reasons. The amount of electricity it takes to create that currency can perhaps be seen as a price floor, which is perhaps corollary to the intrinsic value, but is not the intrinsic value itself. So if something improbable or drastic happened tomor…
> The amount of electricity it takes to create that currency can perhaps be seen as a price floor, which is perhaps corollary to the intrinsic value, but is not the intrinsic value itself. Cost of production should be a price ceiling , not floor: if I can make it for $X, why would I buy it for $Y >> $X? Edited: To hopefully head off further misunderstandings, by "should" here I mean "it makes the most sense to expect…
The lower bound ought to be at least the cost to the miner that produced the new bitcoin (when they try and sell it or use it in the market).
The upper bound is essentially nonexistent. If I have $3000 to invest in bitcoin, what is the possibility of me getting a decent return on $3000 worth of mining hardware? Vs (based on the recent explosive growth) spend $3000 on BTC directly at $200 a piece and you have 15BTC. If it continues to generally rise in value against the dollar a portion of that can be turned back into USD later and spent on a more worthwhile rig, or just used in the BTC economy itself (to the extent that it exists).