North Ireland abortion law illegal: U. For stocks, the valuation metric may be the price-to-earnings or book win98 bitcoin exchange multiple.
For oil or gold, there’s the cost of producing each barrel or ounce. The rupee is assessed on real effective exchange rate. But it’s hard to say if there’s a bubble brewing in bitcoins because it has no such valuation measure. No one knows yet, if Bitcoin’s pseudonymous inventor Satoshi Nakamoto was a computer engineer, academic or Silicon Valley geek. But one subject that Nakamoto certainly understood was economics. He knew that when unlimited demand chases finite supply, the result is sky-rocketing prices.
He also ensured that the algorithm got more complex over time and that the bitcoin yield shrank in geometric proportion with each new block. This has effectively set a hard limit of 21 million on total bitcoin supply, of which an estimated 16. Mining new blocks now entails gigawatts of electricity and computing power. To make things interesting, there’s uncertainty about the existing bitcoin supply as well.