Beatcoini dies

Just a year ago, enthusiastic bitcoi supporters predicted that the cranes would reach a $1 million prize. But that was then. At the price of the bitumen that has dropped almost 80 percent from its peak, and now it is traded below the base level of $6,000, everyone is asking where cryptoids are going.

The answer is a fast, painful decline to zero. I've already explained what it would take to make the bitumen worthless. And the bitumen is approaching this point. As I have argued, once Bitcoin's price falls under its production cost, the incentive to continue producing cryptomonedma will fade, thus putting bitumen into a spiral of decay. A typical asset, there is a series of flows of monetary means, and its value is driven by investors' expectations for those monetary flows. Bitcoin has no monetary flows. In this regard, it is more like gold in what its value is motivated to some extent by potential desire and use, but mainly by the cost of its production.

While there are many estimates of the latter, most suggest that it is worth approximately 5,000 dollars per coin. Moreover, even though traditional goods such as gold require significant investments, with limited technical knowledge and capital, anyone can produce bitumen. Therefore, the cost of bitumen should be close to the full cost of its production (which means that you are modestly compensated for your time and expense).

So we'd expect the bitumen price to swing around that point. Moreover, there is an additional complexity: Unlike gold, which, perhaps because of a historical accident, is universally accepted as a valuable commodity, Bitcoin is a digital commodity, without universal acceptance as a valuable thing.

While the first Bitcoin buyers and producers were true believers in changing the paradigma they thought would promise, and were willing to make investments necessary for future benefits, the buyers and the latest producers have been promoted by greedy investors.

Their greed was further driven by future trade, which was introduced when bitumen prices were rising, and when the sun seemed to be rising to the horizon. With bitumen prices much higher than production costs, they saw a golden chance: producing bitumen, and selling it for a higher price in the future market, with guaranteed profits.

No wonder traditional investors found out, and many began to invest in this field. As more investors entered this market to take advantage of the occasion, bitumen prices fell close to the cost of their production (ensure a small profit), leading to a long period (in the Bitcoin world) of stable prices.

There is a reaction mechanism in the production of all goods, and it also applies to bitcoin: as the cost of bitumen increases, new producers enter the market, increasing the effort needed to produce a bitumen, as its reward will be shared among a larger group of producers.

Similarly, when the cost of bitumen falls on its producers. However, the number of producers cannot fall below a certain level, because without the perpetrators providing the IT power to maintain the system, articture and bitcoin will not remain stable.

Production at a higher cost than the cost at which to sell on the future market destroys the value. So every reasonable investor -- even the one who strongly believes the price of bitcoin will be restored -- has no incentive to produce, if the cost of this one is higher than its price in the future market.

And unlike gold, which can preserve its value, even if it stops its mine extraction activity, Bitcoin can be of no value if there is no system that provides its existence. If he's missing, Bitcoin is just a bunch of coded numbers.

So it seems that bitcoin is entering a death spiral: if the price continues to decline and the cost of production doesn't fall, Bitcoin will go quickly zero. Proponents of the cryptomonement will argue that the Bitcoin price has dropped by higher percentages before. In addition, the latest decline is different in three important areas.

First, the size of the last fall leaves the size of the previous fall in shadow. Second, losers in the recent decline are new investors, who will probably withdraw until there is more clarity about Bitcoin use cases. Thirdly, future markets have changed the game, enabling producers to assess the money-losing report from the beginning. Some argue that the claim that bitcoin is becoming really worthless is extreme. Of course, in view of the facade, tulips still trade $10 a bouquet, and Beani dolls are worth only $5.

And it seems that the economy of cryptomone will continue to exist for a long time, just where many of our transactions will be processed on the grid, and where they will use cryptomoned for daily transactions. In fact, while the world will likely be indebted forever to Satoosti Nakamotos, who gave us a practical krytomone, bitumen may cease to exist.

An improved currency can evolve, or governments can officially launch crypto-dollar emissions. History is full of examples of innovative companies that are bankrupt, and of companies like “and I”, which do the best investments.

And at least, I can still donate my wife a bouquet of tulips, and make her happy. And I can still give Beani dolls to my grandchildren and grandchildren. But what can I do with a number of numbers that don't prove to me that they do a owner of something?