Bitcoin Energy Value rises to over $100,000
Bitcoin Energy Value rises to over $100,000
Bitcoin

Bitcoin Energy Value rises to over $100,000

By Marco Cavicchioli - 17 Feb 2020

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There is a metric called Bitcoin Energy Value that estimates the value of BTC based on the energy that the network consumes

The premise behind this calculation would be that the raw Joule consumed can be used to calculate the bitcoin value. 

In other words, higher energy consumption would increase the fair value of BTC, and vice versa, based on the principle that if all miners stopped extracting bitcoin, consumption would be zero and bitcoin would be useless. 

This metric is based on two variable inputs for calculating the energy value of BTC, hashrate and efficiency of the mining hardware, and uses them to estimate the value. 

For example, on December 12th, 2019 the Bitcoin Energy Value was about $11,500, compared to a market price of about $7,200, indicating a possible price increase. 

According to the author of these estimates, digital asset manager Charles Edwards, the value of bitcoin could reach $100,000 within 5 years

Yesterday, in fact, he published a tweet in which he says: 

https://twitter.com/caprioleio/status/1229139237833932800

https://twitter.com/caprioleio/status/1229139237833932800

The fact is that Bitcoin’s hashrate has grown exponentially over the past five years, and Edwards suggests that its growth rate will drop from about 135% per year today, to 20% in 2025.

In addition, energy efficiency has also improved exponentially, although the annual improvement rate has dropped from over 400% in 2015 to 50% in 2019. 

Combining these estimates, the Bitcoin Energy Value according to Edwards should reach $100,000 by 2025.

This figure would correspond to the so-called “fair value”, at which market price should fluctuate. 

However, so far the price of BTC has fluctuated from -70% to +600% compared to the Bitcoin Energy Value, so in theory it could even reach $600,000 over the next 5 years. 

Edwards, however, argues that this time it is more likely that the price does not outperform the Bitcoin Energy Value by 6 times, but only by a 2x, leading him to think that in the next five years it could peak as high as $200,000. 

Marco Cavicchioli
Marco Cavicchioli

Class 1975, Marco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin.news, and his YouTube channel has more than 25 thousand subscribers.

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