Analysis | Forecasting Bitcoin mining cost price after halving with hashrate trend

Bitcoin is set to halve the reward for every 210,000 blocks. On average, the basic block generation time is about 10 minutes, and the time for 210,000 blocks is 4 years.

Can be obtained with a simple formula: 210000x 10min ÷ 60min ÷ 24h ÷ 365day = 3.995 years

210,000 x 50+ 210,000 x 25+ 210,000 x 12.5 + …

= 21 million

The limit of this proportional series can also be obtained that the total amount of Bitcoin is about 21 million.

The current market news says that the long-term halving expectation will also happen. From the above formula, it can be obtained that 210,000 times 3 is 630,000 blocks, which is the reward halving at the block height of 63001. The halving will take place in May 2020.

From this point in time, that is, from the height of this block, the Bitcoin mining reward will be reduced from 12.5 bitcoins per block to 6.25 bitcoins.

This is a picture I wrote about the Bitcoin mining machine industry in December 2019 (you can search for "three mining articles" to find previous articles).

The results of the accounting in December 2019 are as follows:

Cost formula: 3kw x24hx 0.33 ÷ 73T = 0.325 The unit is: Yuan per T per day

Sales formula: 1T / (93×10 ^ 6T) x 12.5 x 6 x 24h x50000 = 0.9677 Unit is: Yuan per T per day

The above content briefly explains that a three-kilowatt machine runs for 24 hours a day, which means a few kilowatt- hours of electricity a day, multiplied by 0.33 yuan is so much electricity, divided by 73T , it is a T day of electricity.

Divide 1T computing power by 93E computing power . The unit needs to be converted. 1E = 10 ^ 6T . At present, the reward for a block of Bitcoin is 12.5 coins, one block for about ten minutes, and one hour equals 6 ten minutes. Take 6 and multiply by 24h a day to find out how much btc can be mined by a T computing power per day , and then the price of bitcoin is approximately equal to 50,000 yuan a.

Profit formula: 0.9677-0.325 = 0.64 yuan

This is the money that 1T computing power makes in one day.

What we have to calculate today is how much the mining cost will be halved in May?

Through the same formula calculation as above, we need to know: which parameters are uncertain, which can be basically determined, and which cannot be determined. According to this principle, it is divided into three categories , and the list is as follows:

unconfirmed btc price
Basically OK Electricity price Computing power and power of a single miner
Trend judgment Network computing power
Completely sure Block reward halved

Of course, it is completely certain that there are physical information such as a block in ten minutes, an hour and 60min, and a 24-hour day.

Take a look at the computing power,

(Source: BTC.com)

The above data simply makes a trend chart, the interval time of the abscissa unit is four weeks, and the ordinate is the computing power. It can be seen that the overall trend is rising, with a slope of 5.9655, which means that every four weeks, that is, from June 2019, each month increases the computing power by 6EH / s.

Some people say that it is not right that the computing power has been increasing. In November and December, the computing power is a little more than 92E, which is lower than October. There are two reasons. The currency price is not good enough. The old mining machine is slower. Slowly change to a new high-power mining machine, the old one goes on, the new one has not arrived yet, and the computing power has not been received in time .

We look at the overall trend. An average increase of 6E computing power per month is obvious. However, due to the influence of the currency price, it is still possible to rise or fall. However, the computing power of mining machines is relatively stable and generally does not show a ring ratio (two Between months) increase or decrease by 10% +. Combined with the layout of the mining machine's production capacity, the average increase of 6E computing power per month can basically be used as a reference.

What 's the hashrate in May ? 130E . According to the current rhythm, 105.76E is the computing power in mid-January 2020. By mid-May, 106 + 4 * 6 = 130EH / s

When the computing power of the entire network is halved, it is about 130E +. Considering the recent good currency prices and the rise in shipments of the new generation of mining machines, the actual number is likely to be greater than 130EH / s to 140E and 150E.

Still taking S17 pro, one of the most common high-power mining machines, as an example,

Computing power 73T, power 3kw (or 2.92kw can be)

Power consumption is 40W / T. As long as the power consumption does not change, the amount of computing power has little effect on the payback period.

Calculate its daily cost and sales per T computing power,

Calculate first, compare the data calculated in my article in December, and adjust the current situation.

In December, the single T earned 0.64 yuan a day, now it is 0.7 yuan, an increase of nearly 10%. One S17 pro earns 0.7 * 73T = 51 yuan a day. You can check the price of this miner (approximately 14,800 yuan per unit). In this case, it will be returned in more than 280 days. However, the increase in computing power to halve the block rewards, and the profits are constantly being squeezed.

If the price of the currency is unchanged, then calculate the return (the algorithm has been presented in the whiteboard picture above):

A mining machine earns 0.1332 * 73T = 9.7 yuan a day, and a machine earns less than ten yuan a day.

However, there is a bug in this calculation, which is one of the key points of today's article. The price of Bitcoin is calculated. For S17pro (this type of 40W / T power consumption miner), if the profit is 0, After the corresponding halving, corresponding to the 130E hashrate, what is the price of Bitcoin, please see the figure below.

The cost price of Bitcoin: 45,700 yuan, or 6,500 US dollars.

If the computing power is 140EH (it is also very likely), you can directly install the ratio multiple calculation.

140E / 130E * 45700 = 49,000 yuan, or 7,000 dollars.

Because of the recent rapid growth of computing power, it is likely to reach and exceed the entire network computing power in half.

Let ’s take a look again. What ’s wrong with the above verification?

First, is the overall network computing power 130E or 140E underestimated?

Second, what else will happen besides halving in May?

Third, the accounting profit formula does not take into account expenses other than electricity costs, and does not take into account transaction costs in block rewards.

To answer the first question, today is February 5, 2020. The computing power of the entire network is as follows:

114EH / s.

To answer the second question:

When halving in May , when the flood season came, the estimate of the electricity bill was relatively high. According to the average price of 0.25 yuan once (that is, 1kwh ), a reduction of 32% , the corresponding Bitcoin cost price (that is, the shutdown price) is about $ 4,800 , and at 0.22 yuan once, it is reduced by 50% . The shutdown price hits half directly, $ 3,500 .

If the flood season comes, the electricity bill will be cheap, and the number of connected devices will increase. I will not repeat this balance parameter adjustment here. I will stick to the assumption of 140E's full network computing power in May. Even in the flood season, globally, if the time span is extended to the whole year, the electricity cost of 0.33 yuan is a reasonable estimate.

Answer the third question:

The transaction cost does not exceed 1% of the block reward, which is negligible (this will be counted in a few years), the cost of moving the mining machine, the cost of hosting (in addition to the electricity cost), the main cost of Bitcoin mining is the electricity fee, Other costs are ignored.

In summary, this article predicts that after May 2020, the Bitcoin network reward will be halved, and the network's computing power will be 140EH, as well as the cost price of Bitcoin (that is, the price of Bitcoin's shutdown), $ 6,000-$ 7,000. Of course, this is based on the logic of the manufacturing industry to determine that the product's sales price is higher than the cost price. The real world price is determined by supply and demand, which is another topic.

A glass of wine from rivers and lakes, encrypted Erguotou. That's it for today's article.

Remarks: 1. The entire network computing power trend line in the article is obtained by simple Excel table plotting. If you want to be more precise, there are two methods: A, you can fill more data into the Excel table to get more fine graphics, B, Need to refer to the expected shipments of mining machine manufacturers;

2. For the convenience of writing, the computing power units EH / s and TH / s are abbreviated as E and T in some places. please be aware.