Assuming that proof of work of mining graphics cards, has any meaningful relation to labor, undermines its “intrinsic value” to the degree that it attracts capital investment, reversing the relation of value and investment, i.e., it removes any meaning of “intrinsic” from labor value, it shifts all “intrinsic value” to the use of capital (that’s why it is called capitalism) and we are back to exchange value. That is why Bitcoin’s value is only its exchange value, in the first place and does not increase with more hashing power, as such power becomes cheaper and cheaper. The labor theory of value can do nothing about it, much less describe reality.

A market of your proposed currency, with actual labor/work defining value, even if it had peoples’ demand behind it, wouldn’t be allowed to run, as it opposes the commoditization of labor that is capitalism’s central feature, overexploited by neoliberalism. But it would be a very interesting experiment, on our cultural expectations out of “value”.

But, you are not going to debate it…. That’s all right 🙂

good, I’m trying to clarify the points I probably was too synthetic and/or obscure about.

1.

If you don’t put into the work:coin ratio formula the transaction fees rewards for the miners, at the some point in time, when you reach the maximum divisibility representation of BTC, you get a fixed work:coin ratio, but it’s infinite. No matter how much work you pump into mining, you always get zero coins as a reward. You would have a network in which the miners, from some point in time on, are suddenly no more rewarded. The whole system would collapse quickly, I think, regardless BTC satisfies the property for something to be money or not.

But it’s not Bitcoin, you would have described something else.

Transaction fees rewards, which do exist and will become more and more important, are a brilliant way to resolve the absurdity, as Satoshi Nakamoto apparently was well aware of.

2.

If you consider the work:coin ratio as the amount of work spent on mining, divided by the amount of energy that such work can buy with the mined BTC + fees rewards, things become interesting.

I consider here energy for convenience, since it’s the most basic need for life and an objectively measurable physical quantity. As long as mining remains sustainable, i.e. you can buy more energy with mining than that you would do by converting the mining work into energy in other ways,, the system remains sustainable, competitive against other energy conversion systems, potentially environment impact friendly, and represents an impulse to deflation.

I’m not saying here that the “dreaded deflation” is desirable, I’m just considering that BTC properties push deflation and are a strong deterrent against hyper-consumerism.

I’m also suggesting that the property of something to be money becomes secondary when compared to the efficiency of a system which is competitive in converting energy, has some abilities to auto-fix and is programmed to self-destroy if the energy conversion is no more competitive. Such results are interesting (if not amazing) even if the “price” to pay is that wild speculators are attracted.

If it’s not money, it might be something even better: a system which pushes, technologically and financially, toward an efficient conversion of energy through fair competition.

3.

“Rational cryptocurrencies” based on an infinite supply of coins do exist. The work:coin ratio tends to remain constant, because the coin supply follows rules which take into account the work of a node. For example, after the first billion of EOS is put into circulation, new coins will be the reward for those nodes which validate transactions. The more the work you put into the system, the more coins you receive as a reward. This is a cryptocurrency which tends to assure a rational coin:work ratio at the expense of some potential issue to control inflation.

However, I would like to note that, during the early stage we are living in, such coins have followed the very same pattern, raising the interest of speculators, exactly as it happened with Bitcoin. The value of such cryptocurrencies expressed in EUR or USD has followed an extraordinarily similar development, including paramount volatility, so (at least during this phase) the assumption that a rational currency would not generate hype and attract wild speculators seems very questionable.

Keep up the good work!
Paolo

In terms of “Schrödinger’s cat” You do not need to know anything, the investment will lead to more hashing power, and that is measurable, in fact it is already measured in the bitcoin software.