I was thinking about how to view this new digital currency called Bitcoin. Is it just a pyramid scheme that will crash some day, or does a Bitcoin actually hold any value?
Could Bitcoins be a store of energy maybe? In part, yes, I think you could say that. To make a Bitcoin you need to do some fancy maths with a computer. And as time goes by, it gets harder and harder mathematically to make a single Bitcoin. Or, it takes ever increasing amounts of energy to make a Bitcoin. You could think of the energy used to make a Bitcoin being transformed into a monetary form.
For sure there’s a lot of speculation in the price of a Bitcoin at the moment, but may be someone clever can work out a fair value price, based on the total amount of energy it took to make all the Bitcoins that currently exist and divide by the number of Bitcoins. Maybe I’ll have a go. I have a feeling it will involve calculus, since the energy required to make a Bitcoin changes all the time.