You can create a formula based on hash rate, but it won't be rational to anyone looking at it outside of the crypto community.
I have always said that bitcoin is not like a stock, where an analyst can look at the company's earnings, dividend, growth rate, the CEO's salary, and all sorts of other variables in order to come up with a price that the stock should be selling for. And even when analysts do come up with a price, there's usually much disagreement about it and it may be completely wrong.
Bitcoin doesn't have intrinsic value based on electricity consumption, hash rates, or anything else. It's value is derived purely by supply and demand--any attempt to say what bitcoin should be selling for is just delusional IMO, and no offense to OP here. I bet if you do use OP's method, the price you get will not be what the market says it should be 99.999% of the time, and if that's true the method would be worthless. Again, no offense.
Topic: please delete - page 2. (Read 540 times)
not to mention that in the end the only deciding factor is the demand for bitcoin. it can continue to have the same hashrate and as long as the demand continues rising the price will too. and vice versa, meaning if demand decreased, even if the hashrate remains the same, price will fall.
Demand is the only thing that drives the price of bitcoin, i have seen many correlation between the price and the hash rate but the fact is that people tend to spend more money in mining tools only if the price of bitcoin is going up and hence we see that the hash rate is higher whenever there is a rally in bitcoin. In short hash rate is directly proportional to the price of bitcoin or the expected price. 
The current market price is around $8.4k but the hash rate is 90zhs.
90zhs / $0.01 = $9k so I think it's about 7% under-valued.
90zhs / $0.01 = $9k so I think it's about 7% under-valued.
Fixing the ratio at $100 per EH/s is completely arbitrary. You have no basis for that ratio.
Furthermore, the hash rate has risen much more quickly than the price because of technological advances, so the proper price varies wildly depending on when you fix it.
If you fixed the ratio a year ago when the hash rate was about 50 EH/s and the price was $7.5k, you would say that the current price should be $15k.
If you fixed the ratio two years year ago when the hash rate was about 10 EH/s and the price was about $8k, you would say that the current price should be $80k.
If you fixed the ratio 5 years year ago when the hash rate was about 0.3 EH/s and the price was about $400, you would say that the current price should be $120k.
I believe bitcoin price always depend on the market status. The law of supply and demand will always be the factor of the price. The decision of every coin holder whether to hold or to sell will affect the market price.
Why are you making your own price?
Create your own world if you want that to happen.
What difference does it have with those who can control the market if you are doing that?
There is no more freedom in it.
All should rely on how people will use it, if they like it, demands and supply. You could always speculate but never be a dictator of everything.
Create your own world if you want that to happen.
What difference does it have with those who can control the market if you are doing that?
There is no more freedom in it.
All should rely on how people will use it, if they like it, demands and supply. You could always speculate but never be a dictator of everything.
Setting bitcoins price on hash is not gonna work.
Bitcoin is just like anything in our daily or online market everything is dictated by the law of supply and demand this is the one who contributes big time om bitcoins price growth from time to time.
Bitcoin is just like anything in our daily or online market everything is dictated by the law of supply and demand this is the one who contributes big time om bitcoins price growth from time to time.
so you think bitcoin price movements can be very expensive depending on the level of difficulty of mining and increasing the hash makes sense, bitcoin can also increase when there is good news that can trigger traders to buy bitcoin like the current condition of bitcoin prices at the exchange who have started to increase prices.
It is a very good proposal and would give a more stable price, the problem is that currently the price is fixed based on speculation, there is a fight between bulls and bears in investments and thus the price is changing and of course other external factors as opinions of politicians, businessmen, new applications, scalability, etc.
Toady we have nice move price Bitcoin! How do you feel it?
What should the price of BTC actually be? Is there some tangible metric that we can identify as the basis of Bitcoin's value? It seems to me that the only tangible value of bitcoin is it's security- the fact that it can't easily be counterfeited. That's what makes it a reliable ledger of accountability. The security of bitcoin is directly tied to the hash rate of the Bitcoin network so that's what should determine the price, very precisely.
We can set the price to any hash rate but, in order to maximize the adoption of this pricing scheme, we need to set a price that is close to the current market price. According to blockchain.com, the last recorded hash rate was 90M TH/s and before that it was 125M TH/s. We can generalize it to 100M TH/s. The price has also moved around $10k so I'll use that.
(100M TH/s)/($10k) = 10k TH/s - and this becomes our standard unit. Now the price is directly tied to the hash rate.
What's the price of BTC? Simple- (current hash rate divided by 10k TH/s) * $1.
...
at 1M TH/s, 1 BTC = $100
at 10M TH/s, 1 BTC = $1k
at 100M TH/s, 1 BTC = $10k
at 1B TH/s, 1 BTC = $100k
...
Not only is this a fair and stable pricing scheme, it encourages mining, which increases the hash rate, which increases the price. And that's what we want because it will maximize security.
We can set the price to any hash rate but, in order to maximize the adoption of this pricing scheme, we need to set a price that is close to the current market price. According to blockchain.com, the last recorded hash rate was 90M TH/s and before that it was 125M TH/s. We can generalize it to 100M TH/s. The price has also moved around $10k so I'll use that.
(100M TH/s)/($10k) = 10k TH/s - and this becomes our standard unit. Now the price is directly tied to the hash rate.
What's the price of BTC? Simple- (current hash rate divided by 10k TH/s) * $1.
...
at 1M TH/s, 1 BTC = $100
at 10M TH/s, 1 BTC = $1k
at 100M TH/s, 1 BTC = $10k
at 1B TH/s, 1 BTC = $100k
...
Not only is this a fair and stable pricing scheme, it encourages mining, which increases the hash rate, which increases the price. And that's what we want because it will maximize security.
In terms of price determination of bitcoin and cryptocurrencies in general, the hash rate has little or no influence on the market value of Bitcoin and cryptocurrencies. Just like any other product in the financial market, the rate of demand for Bitcoin is the main determinant of the market price of it. Once there is a decline in the rate at which demand the use of Bitcoin or its supply exceeds more than the demand, there will be a drop in the market value of Bitcoin. With this, the hash rate has nothing to the market price of Bitcoin.
Even with it accountability and security features, the price of Bitcoin cannot be easily determined like that.
This is just one thing no one can propose and it becomes possible.
This quality of it makes exploitation impossible; something very different from fiat.
This is just one thing no one can propose and it becomes possible.
This quality of it makes exploitation impossible; something very different from fiat.
It seems good times are ahead. Recently Chinese president said to his countrymen to seize the opportunities afforded by blockchain. On 2017, china central bank banned mainland based exchanges to stop their operation, recent comment of Chinese president actually adds positive vibes. Price climbs 12% overnight. BTC will bloom as it is the key player in crypto industry
And the halving. But its bad when they mention blockchain but not Bitcoin. Originally the Chinese politicians were angry at ICOs but ended kicking exchanges, they still have to get it.
If they bring yet another centralized State backed token, they still fail to grasp the fundamental reason why Bitcoin is still the best. Sure anyone can use "blockchain" for little side projects, but it is Bitcoin that is revolutionizing the world, not blockchain.
It seems good times are ahead. Recently Chinese president said to his countrymen to seize the opportunities afforded by blockchain. On 2017, china central bank banned mainland based exchanges to stop their operation, recent comment of Chinese president actually adds positive vibes. Price climbs 12% overnight. BTC will bloom as it is the key player in crypto industry
What should the price of BTC actually be? Is there some tangible metric that we can identify as the basis of Bitcoin's value? It seems to me that the only tangible value of bitcoin is it's security- the fact that it can't easily be counterfeited. That's what makes it a reliable ledger of accountability. The security of bitcoin is directly tied to the hash rate of the Bitcoin network so that's what should determine the price, very precisely.
We can set the price to any hash rate but, in order to maximize the adoption of this pricing scheme, we need to set a price that is close to the current market price. According to blockchain.com, the last recorded hash rate was 90M TH/s and before that it was 125M TH/s. We can generalize it to 100M TH/s. The price has also moved around $10k so I'll use that.
(100M TH/s)/($10k) = 10k TH/s - and this becomes our standard unit. Now the price is directly tied to the hash rate.
What's the price of BTC? Simple- (current hash rate divided by 10k TH/s) * $1.
...
at 1M TH/s, 1 BTC = $100
at 10M TH/s, 1 BTC = $1k
at 100M TH/s, 1 BTC = $10k
at 1B TH/s, 1 BTC = $100k
...
Not only is this a fair and stable pricing scheme, it encourages mining, which increases the hash rate, which increases the price. And that's what we want because it will maximize security.
We can set the price to any hash rate but, in order to maximize the adoption of this pricing scheme, we need to set a price that is close to the current market price. According to blockchain.com, the last recorded hash rate was 90M TH/s and before that it was 125M TH/s. We can generalize it to 100M TH/s. The price has also moved around $10k so I'll use that.
(100M TH/s)/($10k) = 10k TH/s - and this becomes our standard unit. Now the price is directly tied to the hash rate.
What's the price of BTC? Simple- (current hash rate divided by 10k TH/s) * $1.
...
at 1M TH/s, 1 BTC = $100
at 10M TH/s, 1 BTC = $1k
at 100M TH/s, 1 BTC = $10k
at 1B TH/s, 1 BTC = $100k
...
Not only is this a fair and stable pricing scheme, it encourages mining, which increases the hash rate, which increases the price. And that's what we want because it will maximize security.
No its not related. Bitcoin cannot control things outside Bitcoin, certainly not USD, you cannot code anything like that, and you cannot enforce it either it would be another pegging system. Pegging is bad, it depends on people. Bitcoin is about being trust-less, not trust someone will keep his/her promise...
The best price bitcoin ever has, is whatever the market decides. The beauty is in the freedom it fluctuates within, with nothing outside attempting to force any artificial price only to have the thing blow up later.
The only good intervention, is no intervention. You have to change your mindset, fluctuation is good, learn to live with it, stop trying to oppose it, embrace it and love the freedom it entails. It means it will never blow up, like "stablecoins" and fiats do.
Oh but you have never lived a crash of your fiat in your lifetime, the people in charge never let it blow up... Doesn't mean it can't. This is the fundamental problem, trust in those people, trust they would never do what things like Maduro and Mugabe and several many other idiots in history did, back to the ancient Romans and Greeks...
Bitcoin: In Code We Trust.
Are you worried about something? That mining will decline? Cast your doubts aside, mining WILL decline, its designed like that. Find another source of income now that you know it.
Also you are wrong thinking your money becomes less secure with less mining, the less mining is a result of it becoming too expensive, which is what makes the thing secure to attacks in the first place, that it is too expensive to pull out a 51% attack, and that is not changing. It is the very reason, in fact, that mining will decline, because its too expensive to keep it in such large scale anymore.
Its not on/off either, mining will slowly diminish at the same time the asics are so efficient the hashrate is the highest ever, even with reducing mining, and large operations closing, and the equipment to do it so expensive. And by the time most commercial miners are gone, those that remain are plenty (efficient) enough to keep things secure.
So you are indeed, wrong.
The metric is necessary to establish a rational base price. Any deviation from the base price is irrational and shouldn't dominate the market.
I don't know where you heard about this, but that´s not how the market works. Market price works with expectations, not with "rationality"
Also, you can check this famous quote from John Maynard Keynes
"Markets can remain irrational a lot longer than you and I can remain solvent."
most new cryptocurrency innovators like those in ethereum, think they could exploit those weakness of bitcoin especially with its lack of utility and more to produce cryptocurrency with better use case but the case had been difference. Some of these use cases of the new coin cant produce a sustainable market demand. e.g the ICO crowdfund dumps the value or price of ethereum whenever they want to convert into fiat. However, bitcoin promised nothing but remains the indomitable
I only care about how secure my money is and that is determined directly by the hash rate. So the 'real' price should follow the hash rate. Whatever else people are thinking is all smoke and mysticism, and con artistry.
You may care only about the security, but someone else might care about the convenience, and someone else might care about the privacy, etc. Different people value different things. Each person will determine the value of a bitcoin to them and will buy or sell based on that. A market takes all different those values and aggregates them into a single price.
The hash rate doesn't ultimately determine the security. The security is dependent on the cost of an attack, and (for any mining-based attack) the cost is ultimately determined by the value of the block reward.
No it is practically not possible. If there is no demand then the price will remain stagnent. The price of Bitcoin has to be determined by demand and supply. With your calculation the price will never rise to the level everyone is expecting it to.
You can't set the price. The price is determined in the market by supply and demand. As for coming up with some formula for determining its value, good luck with that.
If the price of bitcoin can be set, then it is centralized asset as other investment schemes. The limited supply to the increasing demand is the one that generates value for each coin. It is impossible to make some formula and make bitcoin get stick to it, such an act will ruin the growth as well the unique features of bitcoin.
You can't set the price. The price is determined in the market by supply and demand. As for coming up with some formula for determining its value, good luck with that.
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