> This seems intuitively wrong.
But it's still correct - there is no link there.
> If power goes up in value, it becomes more expensive to produce new Bitcoins as well as process transactions.
No it doesn't, because the number of bitcoins produced is a constant regardless of price, and they can only be sold at market price. If people stop mining because it costs too much, the supply to the market is entirely unaffected.
The cost of power has absolutely no bearing on the transaction fees or the transaction processing capabilities of the network either. Only congestion affects transaction costs, and the transaction capacity of the network is not connected to the number of miners online or the hash rate, it is roughly constant and dependent on protocol factors.
--edit--
- Replying to the child post here as I am rate limited :(
> If power costs go up 10x, the cost of operating the rigs that verify transactions goes up. Miners who find processing transactions unprofitable will remove themselves from the system
If those miners remove themselves, it has no bearing on the rate at which transactions can be processed or the price of a transaction.
They are all trying to validate the same transactions in parallel. The network does not get more capable as you add mining capacity.
> until transaction fees rise to a level that pays the bill.
What mechanism would cause the fees to rise?
(--edit-- last edit - I think what you're missing is that as the number of miners decreases, each miner gets a bigger share of block rewards and fees)