The IPM Pool proposal has
more information on BTM production cost according to network difficulty.
In the absence of a market to establish the price, NewLibertyStandard's estimate based on production cost is a good guess and a helpful service (thanks). The price of any commodity tends to gravitate toward the production cost. If the price is below cost, then production slows down. If the price is above cost, profit can be made by generating and selling more. At the same time, the increased production would increase the difficulty, pushing the cost of generating towards the price.
Isn't this way setting a price for Bitmark?
The difficulty determines the
production cost of a Bitmark each day.
Supply and Demand determines the
price tag.
If demand for the Bitmark is greater than the supply, then the price tag on markets goes up. More people try to provide the supply which pushes the difficulty (and therefore production cost) up.
If supply for the Bitmark is greater than the demand, then the price tag on markets does down. Less people try to provide the supply which pushes the difficulty (and therefore production cost) down.
Demand is driven by the usefulness and adoption of Bitmark.
From a
price tag perspective the IPM pool:
* allows people to see the production cost transparently and see it changing each day.
* allows some investors to purchase a fair share of each days Bitmarks at a price close to that of production.
* provides a measure of confidence in Bitmark, that people are willing to pay slightly more than the base production cost to ensure the longevity of Bitmark.
* reduces downwards changes in difficulty, cushioning the blow to markets and producers (miners).
* reduces the ability for multipools and private farms to exploit the value of the coin, as when they drive up production cost the variable hashrate of the IPM pool keeps production higher than pools alone can, reducing it back down softly, which makes it harder for these bad actors to repeat the exploit.
* encourages honest miners who mine to hold and support as they can, which reduces some downwards pressure on markets.
* reduces the ability for anybody to hoard, ensuring distribution is fairer and limiting ability to corner the market, manipulate it or price fix, or acquire an unfair amount.
* encourages user adoption by cushioning the effects of difficulty adjustments to keep confirmations at an average speed even when under attack.
* reinforces security by making a 51% attack almost infeasible, as any attacker would have to out power the miners
and the variable hashing power of investors seeking to protect their investment.
The IPM Pool combined with both our block chain configuration and the way the project is focussed, attempts to balance the interests of miners, investors, development team, so that we can offer the user a stable and balanced experience.
