[Cryptocurrency value formation: An empirical study leading to a cost of production model for valuing bitcoin by A. Hayes]

Hello all,

I'm currently reading the paper: Cryptocurrency value formation: An empirical study leading to a cost of production model for valuing bitcoin by A. Hayes. At page 1316 and further you will find some formulas that he uses to calculate the fundamental value. I would like to replicate his finding using todays figures (he calculated it around april 2016), and see whether or Bitcoin's price equal the outcome of the formula.

The expected number of bitcoins expected to be produced per day can be calculated as follows:
BTC/day = [(β · ρ)/(δ · 2^32)] · sec(hr) · hr(day) (1)
where β is the block reward (at 2016 25 BTC/block) , ρ is the hashing power employed by a miner, and δ is the difficulty (which is expressed in units of GH/block). The constant sechr is the number of seconds in an hour (3600), while hrday is the number of hours in a day (24).

Hayes sets ρ = 1000 GH/s
The cost of mining per day, E(day) can be expressed as follows:
E(day) = (price per kWh · hrday · W per GH/s)(ρ/1000 GH/s) (3)

Assuming that the bitcoin market is a competitive market, the marginal product of mining should be equal to its marginal cost, so that the $/BTC (equilibrium) price level is given by the ratio of (cost/day) / (BTC/day):
p = E(day)/(BTC/day) (4)

Other assumptions: average electricity cost: 0.13 cents KW/H. Average energy efficiency 0.40W per GH. Mining difficulty 166,851,513,283

Yields for a 1 TH/s  (1000 GH/s) mining rig approximately: (0.13*24*0.40)*(1000 /1000) = $1.248/day. (3)
Equation (1) yields 0.00301 BTC/day. and (4) (1.248 $/day)/(0.00301 BTC/day) = $414.62/ BTC.

My question:
1. what would be a good approximation of the average hash power employed by a miner currently. And what about the average energy efficiency? Are there any sources that can give an indication?

If I hold all else constant but adjust the mining difficulty to 3511060552899 and the block reward to 12.5 I find a value of 17.425 which does not come close to the current value.

Hi all,

Im looking for a good source that provides daily data on ICO funding. I already found this one: https://www.coindesk.com/ico-tracker/ but once you download the data, you find out that it isn't that recent (<2018). Two other sources are: https://www.coinschedule.com/icos.html and https://www.icodata.io/stats/2018 but apart from reporting different funding amounts per period, I wondered whether there are perhaps better sources out there?

Reason for asking is because im doing a research on the possible price determinants of Bitcoin and im trying to find out what the relation between ICO volume and the price of Bitcoin is. Any help is appreciated

[Regarding prior studies:]

Hi all,

To finish my master I have to write a master thesis economics. The subject of my thesis is Bitcoin and to be more precise the study attempts to find out which factors significantly influence (determine) the price of Bitcoin. In this post, I will give a brief overview of my research proposal. I would like to start a discussion and find out whether or not I should include other variables that are expected to be connected with the price of Bitcoin.

Regarding prior studies:
Prior studies highlighted several perspectives among which: economical, technical and behavioral related variables. 
- Economic related variables (Interest, Dow Jones industry average, gold price, major indices) resulted in mixed results / no strong influence. Bitcoin economical related variables such as trading volume and trade exchange ratio were positively related with the price. 
- Technical (mining difficulty, hash rate): in general, the technical related variables had a significant positive impact on the price of Bitcoin.
- Behavioral related (Google search queries, Wikipedia, Tweets) very significant and positively related with the price of Bitcoin.

Summing related works, it appears that the price of Bitcoin is mainly driven by behavioral related variables ('investors attractiveness'). Hence, some authors state that Bitcoin is highly speculative.

In order to extent prior work, I aim to contribute in the following way:
- Use a longer time horizon that includes the increase of volume of 2017 and decrease in 2018.
- Use a new behavioral related variable that has not been studied before.
- Perhaps differentiate between time periods

So far, I include the following variables in my research:
- Technical: Hash rate
- Economical: Shanghai Stock Index, S&P500(?), trading volume;
- Behavioral: Google search queries and a new unexplored variable

The decision to include above variables is based on literature review.
Probably a VeC or Var model will be used...tbd

Im currently looking through all the materials that have been published so far. If you think this is incomplete please say so, suggestions are welcome!

Other question: on blockchain there was a metric know as the "Trade Exchange Ratio" (https://www.quandl.com/data/BCHAIN/TVTVR-Bitcoin-Trade-Volume-vs-Transaction-Volume-Ratio). However, the ratio is not being supported anymore. Does anyone have a clue if there is another data source ?

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