good question from odolvlobo
Why is the mining cost the "fair" value? Also, I have some bitcoins from when it cost $5 to mine a bitcoin. Does that mean that those bitcoins are worth $5?
because i too have coins from that period too
there is a thing called REALISED price.. (and realised value)
the price of the time of acquiring coin
i have realised price of $6 and also some in 2014,18,22(basically after each correction)
this value measure the OP made, is a bit off.. by not using real world situation to decide ROI, or a base electric cost of the real world.. .. im not sure why he chose $0.08 as its not representing the lowest(value) cost
but is supposed to be about the realised value of todays acquired coins. not estimating todays value of all coins of circulation based on past acquisition to set a value today for past coin
also
BTW, the cost of mining and the price are correlated because the price acts as a ceiling on the cost of mining. In general, miners will not mine when the cost of mining exceeds the cost of buying.
VALUE is not the cost of all miners. value is a BASE/cheapest cost of the most efficient miner. whereby its the cheapest(aka value)
where everyone on the planet cannot mine cheaper than that point thus no one would want to sell coins acquired for more, to sell for less. thus becomes a great support
there are many other potential miners that if they mined today they would make a loss. EG those living in japan and hawaii which would be a premium measure
those people are not miners today. they are buyers. after all why would you mine for $118k a coin when you can market buy for 21% of premium
todays numbers are $18k value(cheap).. $118k premium
dont expect markets to want to go below value or speculate above premium
its why 2021 didnt top $75k because that was the premium then (value: $10k premium$75k)
2022 was $15k value 95k premium but the market only speculated $15.5-$50k
in 2012 it was $3-$40 (value-premium) at the start and then $7-$90 (value-premium)
by winter .. it was a halving year ofcourse
the market of the time of the realised value only trades within that range but never exceeds it
I have some bitcoins from when it cost $5 to mine a bitcoin.
your $5 and my $6 of 2012 were not at "value" (base cost) because our electric were not the cheapest for that year to be the most economic/efficient to be value
the value of 2012 was start of year $3 value end of year $7 value
the premium of 2012 was start of year $40 premium end of year $90 premium
the market moved inside that value-premium window
moving on
so there is this other thing called "store of value" which is subjective to individual coins like realised value is
EG lets say you mined in january 2012.. ($3 value)
your $5 coin had a 60% store of value. where only $3 of your $5 was secured by value where no one would want to sell below value because no one could mine below $3
and so you had a 40% risk of loss in january
by summer your $5 was 100% store of value. by winter it was 140% store of value meaning you were making profit (and today in 2023. just like me, them coins from so far back are worth alot more now.aka mega profits)
but to those buying coins today.. with mining at $18k-$118k dependant on location.. anything $18k is good value to them..
today
market
v
||||||||||||||||||||| 18 118
value premium
they see bitcoin at $24k is in a GOOD value area. not AT value, but within range of good value. but no where near average or risky premium.
so people are super happy to buy your coin at $24k because its not at todays premium.
note:
i am sceptical of using daily changes/measures of value. because miners accounting is not done daily. they measure their costs over a 6-24 month scale(industrial mining farms). so personally im sticking with a $15k base for now and saying its too soon to concrete state value will remain at/above $18k. but knowing the value window is moving forward on the daily where value is rising in the short term is a good sign.. but $15k is a concrete number that has been tested many times last year
the only suggestion i could make to the OP is to use a fairer 2 year ROI. and using a proper base electric cost per KWH
.. he could also use different countries electric rates. and then display multiple lines cost per region. but thats then getting more regionally speculative