Hey Jeff, that's about the number I came up with as well.

I looked at the hashrate in November 2018 and compared it to the hashrate 6 years later. I also compared the miner's efficiency gains during that same time period.

I found that the hashrate had grown 15.09x, a CAGR of 57.2%, and flagship miner efficiency had growth 6.53x, a CAGR of 36.7%.

To find actual energy (and value) input, I divided hashrate growth by efficiency gains 1.572/1.367 = 1.15. So the mining network grew by 15% energy/value input a year on average.

I then add to that the annualized effect of the halving doubling the value of all coins every 4 years, 1.1893^4 = 2, and the USD currency debasement rate of 6.8% a year.

1.15 * 1.1893 * 1.068 = 1.46.

So a 46% GAGR on average over long time periods.

However, from Nov 2018 to Nov 2024 there were 2 halving events, so the CAGR for that period would've been higher as a result. 1.26^6 = 4.

So 1.15 * 1.26 * 1.068 = 1.548.

I did November 2018 because the price was just before the oversold bottom a month later and right around the average cost to mine at the time. Nov 2024 because it's nearly a year before the bull peak of this cycle (and when I did the calculation), and again the price was right around the average cost to mine at that time.

Actual price Nov 13, 2018 = $6350

Actual price Nov 13, 2024 = $88,899

$6350 x 1.548^6 = $87377. A 98% correlation.

Lastly, because the mining network doubles the cost to mine coins "overblock" in terms of time and energy, the actual calculation would be more accurate if it took that into account. So really, measured in dollars it's (1.15 * 1.068 = 1.228) 22.8% CAGR a year, with a sudden doubling every 4 years (this causes a shock wave that slowly makes its way through markets, culminating in the bull peak, before crashing back to the production cost of the mining network the following year).

Plotted out on a graph, that looks like this:

https://www.desmos.com/calculator/u5myjhotyz

The blue line is dollar growth, the red line is spending power growth.

This is what I believe the data strongly supports to be the true average growth rate of Bitcoin's value over time, and it's Earth shattering to society if true. You are absolutely right that the world of tomorrow is a world of prosperity for everyone, I can't wait to see it manifest over the next few decades.

Life can be so chaotic, but it can also be incredibly peaceful.

Feeling at peace. 🧘‍♂️

Deeply unsettling.

This is deeply unsettling.

The CAGR everyone always quotes is reflecting dollar debasement. If it does grow to $64 million in 20 years, that undoubtedly is dollars that are further debased and worth 25% of what they are today.

🥳👏

GM.

Hey guys what should be done to celebrate? 420 followers is a big milestone.

Beautiful statue and airport. Jealous! One day I'll visit and see the ruins of Constantinople as well as the architecture of the Ottomans. ❤️

Originally I just sat down in early November and sought a date that's more than 4 years ago that would not be over bought or over sold. 18 months after the halving Bitcoin is typically overbought, and exactly 12 months after the bull peak is typically over sold.

Since the halvings occurred in May 2020 and April 2024 I was trying to insolate this calculation from bottom and peak of each bull/bear period. I chose 6 years prior since it's a month prior to the ~$3500~ bottom of Dec 2018, and according to:

https://en.macromicro.me/charts/29435/bitcoin-production-total-cost

the price was very close to the mining cost at both points (November 2018/2024) and thus neither oversold or overbought.

My calculation for CAGR were based entirely on the hashrate rate of growth over that period of time divided by efficiency increases, tied to doubling of value of Bitcoin with each halving. When I plugged all the numbers in, also accounting for currency debasement, I found an approximate 95% correlation between expected price growth from the above calculations and what was actually observed.

*estimated average PURCHASE cost in Jan 2028 will likely be $370.5k per Bitcoin.

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.

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Part 3: Miner hashrate efficiency growth.

Over the 6 years between 2018 and 2024 the efficiency of the top of the line miners grew from 98 Joules/TH with the S9, to 15 Joules/TH with the S21. This is an efficiency gain of 6.53 times.

Expressed as an annual efficiency improvement rate, that's 36.7% or 1.367^X.

This efficiency growth seen at the top of the market is likely to be experienced throughout the mining ecosystem as the old miners get cheaper to own and people upgrade.

This efficiency growth then offsets the growth of the hashrate talked about in part 2 as follows:

1.572/1.367 = 1.15

Meaning the real value increase of energy into the mining network over 6 years was about 15% a year on average. This applies to not only the cost of energy for new coins, but it is also reflected in a rise in the equivalent cost on the FIAT market for all coins.

Why? Because, as nostr:npub1s05p3ha7en49dv8429tkk07nnfa9pcwczkf5x5qrdraqshxdje9sq6eyhe famously says, everything trends towards it's marginal cost of production. Why would you sell anything for less than it costs to make it? If you have a rare item that costs more now than when you bought it, wouldn't you value it at its more recent production cost?

Continued in Part 4: The drive behind the growth in the mining network.

nostr:note1jf5glprmf74pqxggc3f4wgyffhcakp794j2yl6u9zp00q2kfx6qs5j3klh

After this year we will either never see Sub $100k Bitcoin again, or we'll briefly see it Late 2026 - Early 2027.

The same thing as happened to $1k Bitcoin in 2017. Never saw it again.

GM everyone. 😊

Whoever left their dog's poop on the grass that I stepped in this morning... Fuck you.

If the "applicability threshold" is €2.57m then how are there brackets as low as €800k?

Welcome to freedom tech! Glad to have you in the fight to keep the world right!

"XXXX is better than Bitcoin" 🤡

Welcome to freedom tech!