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Well, they both would become easier to produce. But the scarcity of one wouldn't change 😉

But bitcoin wouldn't actually become easier to produce because of the difficulty adjustment, right? Because if the cost of energy falls by a factor of one thousand, this means that (excluding the initial capex of mining rigs for simplicity) people can now afford to run a thousand times as many miners for the same electricity cost. The super weird thing is that for anything other commodity besides btc, this would tank the price. But for btc, the network simply adjusts the difficultly to make each hash harder to find in exact proportion to how much energy you throw at it.

I understand what you're saying and you're correct, but if it's essentially free to run an ASIC, more people could run them. It would be cheaper and therefore easier for the masses to run ASICs. Now maybe you'd earn 10 sats a day 😂 but the cost to do that would be essentially nothing.

I’m contemplating it as a thought experiment. I think the price of btc would stay the same while the price of gold (and other commodities) would decrease

Ooh. I don’t think so. I think the price in that thought experiment would plummet with everything else.

Bitcoin still operates in this world, and that magnitude of price decrease would shake everything up. Certainly including bitcoin.

I’m not sure about that. Seems to me that the absolute price of energy is not relevant, i.e. the only way you can make money (amortized over long timescales) is having access to cheaper energy than the average miner

I don't mind any longer because it's not cost effective to do. If mining is free, I'd do it.

Let’s push this further toward the theoretical extreme. Suppose energy became one million times cheaper (and thus people could turn on a million times more miners—a million times the current hashrate for the same electricity cost). The difficulty would simply adjust to make it a million times harder to find a block. So why would the price plummet if the supply stays the same?

Ok if mining is free (like *actually* zero cost in the sense that energy is not longer scarce) we've circled back around to proof of stake haha

You said 1000x cheaper, right? That's essentially free. It's not free, but it's going to cost me 0.4 cents a month instead of $400 a month to run my miners.

But then you can also expect to make 1000x times less profit, because you have 1000x times more competition

Because the price of everything else would dump, and bitcoin just measures “everything else” Would take a LOOOOONG time for a Jevon’s paradox of that magnitude to rebalance

Hmmm depends on the speed of the price falling that much.

That's fine. Some BTC is better than zero BTC.

> In economics, the Jevons paradox occurs when technological progress increases the efficiency with which a resource is used (reducing the amount necessary for any one use), but the falling cost of use induces increases in demand enough that resource use is increased, rather than reduced. Jevon's paradox is interesting, I had never heard of that before. But if I understand correctly, it only applies to consumable resources right? The reason I'm saying the price of btc would stay the same is because the supply would stay the same (i.e. it cannot be consumed, nor can it be produced faster due to the difficulty adjustment) Yes the *purchasing power* of btc would massively increase (due to the falling price of every other non-difficultly-adjusted commodity) but the price would stay the same (ok well it might actually increase in nominal terms because people have more disposable income due to their real expenses being reduced)

Yeah if it happened literally overnight the rate of btc being produced would increase temporarily until the difficulty adjustment kicked in. This is just a thought experiment though.

For sure! I'm just thinking through this as a thought experiment

At some point, cheap energy pushes the price of gold to zero doesn’t it? They already know how to manufactured I’ve heard.

In the theoretical extreme where humans could go and mine asteroids after exhausting the terrestrial supply, yes

“While creating gold in a lab is scientifically possible, it could be more practical. The energy cost to run a particle accelerator is enormous, and the amount of gold produced is minuscule. At current energy prices, producing just one ounce of gold costs billions of dollars. As such, extracting gold from natural sources is much more efficient.”

Haha yeah I wonder if anyone has done the math on that, like how low would the cost of energy actually have to be to make transmutation economically viable? Are we talking like a Dyson sphere?

The difficulty adjustment has an upper & lower max change limit for every 2016block period if I'm not mistaken. This adds a nice wrench into the thought experiment that I think is fun to ponder.

Oh I didn't know that, interesting

-75% <--> +300% Max change for 2016 block period.