Would free energy cause a market collapse? Consider a world where energy is free and plentiful. Bitcoin, and other cryptocurrencies, are given value since they are 'proof' of work. This work comes at the cost of:


a. time
b. energy


By removing the cost of electricity, hardware expenditure becomes the ceiling for hashrates. Surely this makes cryptocurrencies less valuable. Wouldn't the market become hypersaturated as supply went up? On large enough scale, hardware turnover rates might provide some limiting factor to supply- but for the most part mining operations should be able to keep up with the increasing difficulty of the hash.

I can see otherways the blockchain would be useful, but I'm starting to wonder whether cryptocurrencies would continue to work.
Although this question might be "too broad" or "off-topic", I'll give you an answer and it's no.


  By removing the cost of electricity, hardware expenditure becomes the ceiling for hashrates. Surely this makes cryptocurrencies less valuable. Wouldn't the market become hypersaturated as supply went up?


I don't follow. By removing the cost of electricity you only remove ONE of the prohibitors. There are still other prohibitors such as equipment/bandwidth/storage costs, know-how, and time. There should be no increase in supply. The bitcoin difficulty will still remain, so blocks will still be solved in a ~10 minute target window. Even if they had free energy and built a mining chip that doubled the current hash rate it would just retarget after 2,016 blocks.