BTCMeansFreedom4All on Nostr: Think of the value of Bitcoin over time as the total value of the energy input in the ...
Think of the value of Bitcoin over time as the total value of the energy input in the mining network, divided by the subsidy + fees.
In general, if Bitcoin is $X that's because about $X * (times) the mining subsidy is being spent on all mining facilities combined, including staff/equipment/rent/energy costs, every 10 min globally.
This grows about 15% a year (the average growth seen from 2018 to 2024).
If we take the current mining cost of $90k per coin, then the value paid to the network by miners per Bitcoin block today is $281,250, by 2028 that will grow by 1.15^3 = 1.52.
1.52 * $312k = $427.5k per block.
Since the subsidy reduces to 1.5625 in 2028, that means $474k / 1.5625 = $273.6k per Bitcoin as far as production cost goes.
We can't forget to add in dollar debasement though, since they debase on average 6.8% a year, 1.068^3 = 1.22.
1.22 * $273.6k = $333.8k.
Jan 2028 Bitcoin will likely be worth around $333.8k or higher.
The current price is not $90k as it's a bit overvalued though, which makes sense as we're beginning a bull year which will end in a FOMO peak and FUD crash.
So just take the same number of $333.8k and multiply by 1.11, assuming the price is similarly over valued as it is today, and we find the estimated average mining cost in Jan 2028 will likely be $370.5k per Bitcoin.
In general, if Bitcoin is $X that's because about $X * (times) the mining subsidy is being spent on all mining facilities combined, including staff/equipment/rent/energy costs, every 10 min globally.
This grows about 15% a year (the average growth seen from 2018 to 2024).
If we take the current mining cost of $90k per coin, then the value paid to the network by miners per Bitcoin block today is $281,250, by 2028 that will grow by 1.15^3 = 1.52.
1.52 * $312k = $427.5k per block.
Since the subsidy reduces to 1.5625 in 2028, that means $474k / 1.5625 = $273.6k per Bitcoin as far as production cost goes.
We can't forget to add in dollar debasement though, since they debase on average 6.8% a year, 1.068^3 = 1.22.
1.22 * $273.6k = $333.8k.
Jan 2028 Bitcoin will likely be worth around $333.8k or higher.
The current price is not $90k as it's a bit overvalued though, which makes sense as we're beginning a bull year which will end in a FOMO peak and FUD crash.
So just take the same number of $333.8k and multiply by 1.11, assuming the price is similarly over valued as it is today, and we find the estimated average mining cost in Jan 2028 will likely be $370.5k per Bitcoin.