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0 pointshwillis8y ago0 comments

Energy doesn't back bitcoin, it just stops the currency from inflating. Or it would, if mining could always produce new bitcoins, but IIRC its supposed to stop after a while.

The difference being that a bitcoin does not entitle you to some unit of energy or work produced from it. The energy used to verify bitcoin transactions is just lost.

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jstanley8y ago

Energy backs bitcoin in the sense that "cheating" (reversing transactions or double spending) costs inordinate amounts of energy.

hwillisOP8y ago

"backing" a currency usually refers to exchanging fiat money for a good with intrinsic value. That does not describe the relationship between bitcoin and electricity at all.

Energy ensures bitcoin's ownership, not its value (although it does impact its value indirectly).

GBiT8y ago

The more energy Bitcoin network uses, the more valuable Bitcoins are... If Bitcoins value falls down, energy usage will fall down too. Energy is used to create valuable document - The Block. And block is not necessary new Bitcoins, its transactions too.

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