New Bitblock Capital Report Uses A Different Mining Valuation Model For Bitcoin (BTC)’s True Value

2019-1-10 22:10

Bitblock Capital Advances A Different Mining Valuation Model For Bitcoin

The blockchain technology has hit the world with a storm. It has disrupted many traditional industries as it is reliable, safe, and convenient. Specifically, bitcoin has generated a lot of heat among the various investors and financial analysts.

The digital currency has grown in popularity over a short period. Its value has also increased. This has led to various valuation methods. The primary valuation methods which are widely used have major shortcomings.

Shortcomings

However, Bitblock has introduced a whole new dimension to the techniques used in the valuation of BTC.

According to the firm, these methods have shortcomings which make them unreliable. The currency model, for example, is not in a position to shed all the light relating to the price action of BTC.

On the part of the demand and supply model, Bitblock explains that the model examines the price of the BTC based on the factors of demand and supply. However, the model has a shortcoming in that it is difficult to have a realistic measure of the elasticity of both the demand and supply curves. Thus, this model relies on a weak economic assumption minimizing its practicability.

What Bitblock Proposes

Bitblock advocates for a more realistic model known as the mining model. Bitblock insists on its reliability since it is based on the economic assumption of non-arbitrage pricing. Due to its use of revenue cost-model to value the BTC, the model is reliable since it is anchored on the principle that there exists a market equilibrium.

Using this strategy, BTC’s value is arrived at after careful consideration of the underlying factors such as the mining capacity and electricity. As such, it ignores the role played by irrational volatility and speculation.

The theory has another strength. It incorporates some fundamental economic approaches before arriving at the value. As such, it relies a lot on the labor theory. Here, BTC is used to store value. In this regard, it stores a value which is equal to the work of the machines.

Price and Value

However, it is worth noting that there is a considerable difference between two variables. Value is not affected by the irrational behavior of the market actors. However, the price is arrived at after the interaction of the various forces of demand and supply. Thus, it was not shocking to find the prices of BTC diverting significantly from the value for the period between July 2016 and late 2017.

The prices were increasing accompanied by a rising rate. This is a common economic phenomenon in any market including the stock market. Sometimes, price does not necessarily reflect the value of a commodity.

The irrational rise in price was not going to be sustained. As it was expected, prices crashed at the beginning of the year 2018 and started consolidating towards the real value of the BTC. The prices then go below the equilibrium level. However, this is a rare scenario as stated by the report published by Bitblock.

Similar to Notcoin - Blum - Airdrops In 2024

origin »

Bitcoin (BTC) на Currencies.ru

$ 95127.99 (+0.02%)
Объем 24H $43.031b
Изменеия 24h: -2.02 %, 7d: -9.23 %
Cегодня L: $94782.14 - H: $95637.28
Капитализация $1883.52b Rank 1
Цена в час новости $ 3570.28 (2564.44%)

bitcoin model valuation capital mining bitblock different

bitcoin model → Результатов: 10


NY Times Bestselling Author: Bitcoin S2F Is Flawed, Not Mathematically Sound

Bitcoin is trading at new record highs, and the naysayers are out in droves. Skeptics range from Nouriel Roubini to Peter Schiff, and many more. And while this next challenger of the cryptocurrency’s long term value says he is “not a Bitcoin hater” like the others, he has taken the time to go over Plan B’s stock-to-flow (S2FX) model with a fine-tooth comb, and claims that the most important valuation model going is “flawed,” “faulty,” […]

2020-12-16 18:30


Фото:

Bitcoin Crash Doesn’t Affect Stock-to-Flow Model Prediction

Even though Bitcoin has declined in price almost 26% since February 13th, this pullback does not signal the end of the Stock to Flow (S2F) price model.   The sky is falling, should we be worried? Bitcoin’s S2F model is a long-term prediction which takes data from the previous Bitcoin halving events and calculates a range where prices are likely to follow in the future.

2020-3-10 20:11


Фото:

Bitmain начала продажи Antminer T17

Устройство предназначено для добычи криптовалют Bitcoin и Bitcoin Cash. Модель оснащена 7-нм чипом нового поколения. Производитель оборудования для майнинга Bitmain анонсировал продажи нового устройства на базе 7-нм чипа Antminer T17.

2019-4-30 15:37


Фото:

Эксперт: уязвимость bitcoin снижает его экономический потенциал

Исследователь Эрик Бадиш, работающий в Чикагском университете, полагает, что безопасность bitcoin обратно пропорциональна ее ценности в экономике. По мнению эксперта, уязвимость цифровой монеты ограничивает экономический потенциал BTC.

2018-6-20 09:35