The more expensive the mining, the more stable the coin price? The counterintuitive conclusion of a paper Accidentally stumbled upon a paper published in the International Economic Review, and Professor Kohei Iwasaki from Kyoto University came to a conclusion using a pure theoretical model: --The high cost of mining is precisely the key to maintaining the value of cryptocurrency. It has to be said that in recent years, there has been an increasing amount of academic research on cryptocurrencies, and papers on the relationship between mining and cryptocurrency prices can be seen. Iwasaki created a model that yielded a core insight: -The computing power of the entire network is publicly observable, and computing power represents the real money and silver invested by miners. The logical chain is simple: -Miners are not philanthropists. If coins are worthless, who would burn money to mine? -So the sustained high computing power itself is a credible signal that 'this coin has value' -This signal is more effective than any verbal "I think it's like Bitcoin" because it cost real money The paper uses the method of "balanced refinement" to prove that: In all equilibria where the coin price will return to zero, miners have an incentive to influence market expectations by increasing their computing power - because the benefits of this signal will exceed the additional costs. So these 'zeroing equilibria' are untenable and should be excluded. The only stable equilibrium is when the coin price remains at a positive stable level. But why are so many coins still dead? Theory is beautiful, reality is tough. If mining can really guarantee coin prices, why do 99% of coins in the market go to zero? The paper considers multiple cryptocurrencies in the extended model. The results show that refinement ensures that the sum of the values of all cryptocurrencies is equal to the value of a single cryptocurrency. These results indicate that refining cannot exclude an equilibrium where the value of any one cryptocurrency is zero at every point in time. Therefore, the theory in this paper cannot ensure that all cryptocurrency foam will continue. This conclusion is closer to reality: the "total amount of foam" that the market can support is limited. Just as the liquidity of financial markets is not infinite, the total market value of cryptocurrencies is also constrained. Under this constraint, multiple currencies will compete for this limited "foam space". The stronger the stronger, the weaker are eliminated. This explains why Bitcoin can survive, while projects like "Bitcoin 2.0" and "Dogecoin Killer" have all gone to zero. Not because they didn't mine, but because they lost in the competition. Furthermore, this model also implies a harsh reality: the cryptocurrency market is essentially a winner takes all market. In theory, the market can support the coexistence of multiple currencies as long as their combined value does not exceed a certain upper limit. However, in practice, factors such as network effects, liquidity aggregation, and brand awareness can make this' multi currency equilibrium 'very fragile. So, will Bitcoin return to zero? The answer given in this paper is: theoretically not, as long as mining continues and people continue to vote for this network with real money. But this is not a deterministic prediction, but a conditional statement. If one day the mining cost returns to zero (such as the breakthrough of quantum computers), if one day a better coordination mechanism emerges, if one day a global regulatory joint execution... then this theory is no longer applicable. However, on the other hand, the greatest value of this paper is not predicting the future, but providing a new perspective: mining is not just a technical mechanism, but also an economic commitment and coordination device. Its' waste 'is not a bug, but a necessary cost to maintain the credibility of the entire system. Just as the inefficiency of democratic systems is the cost of ensuring checks and balances of power, the high energy consumption of mining may be the cost of ensuring decentralized trust. As for whether this generation is worth it or not, it depends on different opinions. At least the next time someone says' Bitcoin should be banned for wasting energy ', you can throw this paper to them and say,' Perhaps it's this kind of 'waste' that keeps the coins in your wallet valuable. ' Original paper: https://media. (licdn.com)/dms/document/media/v2/D561FAQGub0vv5MT-HA/feedshare-document-sanitized-pdf/B56Zmj0seHHkA8-/0/1759390125886? e=1760007600&v=beta&t=ufOjCPb_DU4oDt-cN_alR2KKbQSQIJOiqVD5lVZyBRI