Topic: Reverse engineering Bitcoin (Read 113 times)

Price and safety are two entirely different concept and when it comes to "manipulating" them the situation is very different.
When it comes to security of bitcoin, no level of manipulation is acceptable and it has never happened despite numerous attempts such as the scaling "wars" between 2014 and 2017.
But when it comes to price, it can be and has been manipulated. The numerous unreasonable jumps and the unreasonable drops are clear indications of that. In case of price manipulation a degree of manipulation has always existed that has not been dominating the market and we get accept it. Otherwise if the manipulation was dominating the market, that could affect the security too.

I think the recent events affecting our world specially in EU are a clear indication that it is actually very easy for the cost of energy to skyrocket.

This is a naive interpretation of how money should work, in my opinion, that comes from the traditional form of money namely fiat currencies that have no supply limit and keep being printed while the governments try to justify their value by claiming they are backed by something whether it is gold or something else like oil (Petrodollar).

Bitcoin broke free of these traditions and naive interpretations of money. It has limited supply and its value comes from its utility hence determined by the level of adoption it has.
As a matter of fact the cost of production is also affected by the price not the other way around.

I'm not suggesting your arguments are completely wrong, but I say things like energy cost, computing efficiency, etc. are some of the factors contributing to bitcoin value.

Most probably he did have a good thought on it, but it may have been some luck involved too. For example I think that he didn't foresee what ASICs will do to Bitcoin (and its price).
After all, he was sincere:

Most of these have been discussed before or similarly, you might want to look up the stock to flow ratio ideas on bitcoin for example (if you haven't already).


I think bitcoin can adapt to growth that's a bit exponential too in this case (and has had to). Early asic miners had very large chips and now they're probably the smallest they can be (size effecting efficiency directly due to things like wire sizes).

In terms of price it'll match that miner efficiency will be proportional to price, but price will also be proportional to hash rate (if price increases, hash rate normally follows)


This wouldn't have been thought of strait at the inception but it is probably something that's come out since asics are a thing.

It was probably left for a few years by the original developer sjust to see how things like mining evolved, if asics weren't created it'd likely still be a very strong network imo (there'd still be GPUs mining it).

Hey guys,

I’ve tried to reverse engineer Bitcoin and by that summaries it in one general valid formular.
Let me know what you think about it.

It’s a quantitative formular, so don’t take things too literal.
Arrow up means simply “goes up” and arrow down simply means “goes down”.
https://share.icloud.com/photos/07aWKjppg3dKZEBCCzLd4jZDg

https://share.icloud.com/photos/00dNQvq9TipFSXxJAercjSTbg

Result:
I think Satoshi Nakamoto took two things into consideration when creating Bitcoin, so no one could easily manipulate the safety / price of it:
1.) The linear growth of efficiency of computers [Flops/Watt]
2.) The not-easily changing offer and demand of primary energy prices and by that a relatively stable energy costs [€/Ws].

So all in all is the equivalent value of Bitcoin, just as the equivalent value of US-dollars once used to be gold, is: Efficiency of computers and energy costs.

Other interesting math-facts of Bitcoin:
A.) A logarithmic growth of Bitcoin in an logarithmic chart
B.) The halving of Bitcoins inflation every 4 years and by that causing a delayed price increase, as price = demand/(offer*inflation)
C.) The adjusting hashing difficulty, controlled by existing hash rate, controlled by global average energy costs.

This took me two days to think about it. I hope its right.
Cheers, Elias Pfeffer