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[danherbias07]

Why are you making your own price?

Create your own world if you want that to happen.
What difference does it have with those who can control the market if you are doing that?
There is no more freedom in it.
All should rely on how people will use it, if they like it, demands and supply. You could always speculate but never be a dictator of everything.

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[Asmonist]

I believe bitcoin price always depend on the market status. The law of supply and demand will always be the factor of the price. The decision of every coin holder whether to hold or to sell will affect the market price.

[odolvlobo]

The current market price is around $8.4k but the hash rate is 90zhs.

90zhs / $0.01 = $9k so I think it's about 7% under-valued.

Fixing the ratio at $100 per EH/s is completely arbitrary. You have no basis for that ratio.

Furthermore, the hash rate has risen much more quickly than the price because of technological advances, so the proper price varies wildly depending on when you fix it.

If you fixed the ratio a year ago when the hash rate was about 50 EH/s and the price was $7.5k, you would say that the current price should be $15k.
If you fixed the ratio two years year ago when the hash rate was about 10 EH/s and the price was about $8k, you would say that the current price should be $80k.
If you fixed the ratio 5 years year ago when the hash rate was about 0.3 EH/s and the price was about $400, you would say that the current price should be $120k.

[7788bitcoin]

not to mention that in the end the only deciding factor is the demand for bitcoin. it can continue to have the same hashrate and as long as the demand continues rising the price will too. and vice versa, meaning if demand decreased, even if the hashrate remains the same, price will fall.

Demand is the only thing that drives the price of bitcoin, i have seen many correlation between the price and the hash rate but the fact is that people tend to spend more money in mining tools only if the price of bitcoin is going up and hence we see that the hash rate is higher whenever there is a rally in bitcoin. In short hash rate is directly proportional to the price of bitcoin or the expected price.

[The Sceptical Chymist]

You can create a formula based on hash rate, but it won't be rational to anyone looking at it outside of the crypto community. 

I have always said that bitcoin is not like a stock, where an analyst can look at the company's earnings, dividend, growth rate, the CEO's salary, and all sorts of other variables in order to come up with a price that the stock should be selling for.  And even when analysts do come up with a price, there's usually much disagreement about it and it may be completely wrong.

Bitcoin doesn't have intrinsic value based on electricity consumption, hash rates, or anything else.  It's value is derived purely by supply and demand--any attempt to say what bitcoin should be selling for is just delusional IMO, and no offense to OP here.  I bet if you do use OP's method, the price you get will not be what the market says it should be 99.999% of the time, and if that's true the method would be worthless.  Again, no offense.

[exstasie]

You can create a formula based on hash rate, but it won't be rational to anyone looking at it outside of the crypto community.

It won't be rational, period. Hash rate security obviously underpins Bitcoin's value, but it would be silly to try and produce some mathematical formula like this.

Increasing hash rate simply indicates increased mining investments or efficiency improvements. Miners themselves are speculators. They are investing in mining operations because they expect higher prices. Like all investors, they are prone to over-speculation. Simply put, sometimes they are wrong about the market.

Hash rate had been continually increasing throughout 2018, up until the November crash. Then we had 3 successive drops in difficulty. This clearly shows that miners respond to price, not the other way around. So I think the OP's approach is a bad one.

[exstasie]

Increasing hash rate simply indicates increased mining investments or efficiency improvements. Miners themselves are speculators. They are investing in mining operations because they expect higher prices. Like all investors, they are prone to over-speculation. Simply put, sometimes they are wrong about the market.

It's never wrong to mine for Bitcoin.

Not true. How about if you spend more mining a bitcoin than the market will pay for it? That's why miners were shutting down in November-December 2018, because the crash made them unprofitable. Those miners expected price to rise and they were very wrong.

[pixie85]

Increasing hash rate simply indicates increased mining investments or efficiency improvements. Miners themselves are speculators. They are investing in mining operations because they expect higher prices. Like all investors, they are prone to over-speculation. Simply put, sometimes they are wrong about the market.

It's never wrong to mine for Bitcoin.

Not true. How about if you spend more mining a bitcoin than the market will pay for it? That's why miners were shutting down in November-December 2018, because the crash made them unprofitable. Those miners expected price to rise and they were very wrong.

Nobody said you have to keep selling as you mine it. When you choose to mine you know you're in for the long run. Like hodler who moves his coins out of the exchange and into a wallet generated offline then prints a paper wallet and hides it. He's not going to dig out and compromise his paper wallet every time the price dips below the price he paid. A miner can also keep mining and holding.

10k is a very rational price. We shouldn't put labels on it but it seems fair to pay this much.

[exstasie]

It's never wrong to mine for Bitcoin.

Not true. How about if you spend more mining a bitcoin than the market will pay for it? That's why miners were shutting down in November-December 2018, because the crash made them unprofitable. Those miners expected price to rise and they were very wrong.

Nobody said you have to keep selling as you mine it. When you choose to mine you know you're in for the long run.

Anyone can baghold if they want to. That's not the point.

The OP's idea implies miners dictate the market price. That essentially means that miners collectively are always right in their market speculations, and as long as hash rate keeps rising, so will price.

I was just pointing out how that's not true. Therefore you can't extrapolate price or value from the hash rate. Miners are guessing just like the rest of us.

[khaled0111]

Or maybe it is just the opposite.
Hashrates are being driven by bitcoin price, what about that!
If bitcoin price rises then more miners will join and hashrates will rise, if bitcoin price falls then some miners will leave and hashrates will fall.

[Wexnident]

I don't understand how you related hash rates to the current price for BTC. I'm pretty sure that like every other coin out there, BTC price is determined by simple supply and demand though. Even if we do think of Rational Price as something different from normal price, determining it based on Hash rates seems to be wrong. The recent news and events affect supply and demand so if we kind of force it, we can say that it indirectly affects the price and thats quite a legitimate explanation.
Besides, Miners are just like us, speculating on BTC price. I doubt they could set the price of BTC depending on hash rates involved even if they wanted to.

[wajik-tempe]

Or maybe it is just the opposite.
Hashrates are being driven by bitcoin price, what about that!
If bitcoin price rises then more miners will join and hashrates will rise, if bitcoin price falls then some miners will leave and hashrates will fall.

It could be like this, but i'm not sure people are only mine it when the price is high.
If based on your opinion, the miners who still mine when the price still low and no other people mine it, they will get much.
And when the price is up, they will sell.
But i think, bitcoin miners will always mine whatever the price will be, so i think the rise of hashrate is not the reason why bitcoin price pump.

[Coin_trader]

Or maybe it is just the opposite.
Hashrates are being driven by bitcoin price, what about that!
If bitcoin price rises then more miners will join and hashrates will rise, if bitcoin price falls then some miners will leave and hashrates will fall.

It could be like this, but i'm not sure people are only mine it when the price is high.
If based on your opinion, the miners who still mine when the price still low and no other people mine it, they will get much.
And when the price is up, they will sell.
But i think, bitcoin miners will always mine whatever the price will be, so i think the rise of hashrate is not the reason why bitcoin price pump.

According to recent news I heard about mining. Mining hash rate increase after the dump of bitcoin. Meaning that miners is still hopeful about the price of bitcoin ddspite the downtrend of price. This might be some factor to be consider. Seeing miners that still positive gives boost to the investor to invest more. I'm not telling that its the main reason but just a factor to be consider.

[Wysi]

I don't understand how you related hash rates to the current price for BTC. I'm pretty sure that like every other coin out there, BTC price is determined by simple supply and demand though. Even if we do think of Rational Price as something different from normal price, determining it based on Hash rates seems to be wrong. The recent news and events affect supply and demand so if we kind of force it, we can say that it indirectly affects the price and thats quite a legitimate explanation.
Besides, Miners are just like us, speculating on BTC price. I doubt they could set the price of BTC depending on hash rates involved even if they wanted to.

Miners cannot have any affect in the bitcoin price as its as simple as they lend their electricity, Internet and mining device for a small commission and they cannot do much when it comes to pricing and infact users are losing interest in mining as it gives too little profit and I have stopped it as well if more users does then the transaction speed will be reduced that's all. As far as price is concerned it's purely demand and supply and people should get this straight into their head.

[Omega Weapon]

If supply and demand is influenced entirely by idle speculation and whim then
the market price represents anything but the real price. For the price to be real,
the market must derive the price from tangible metrics. Buyers and sellers may
not always agree on what that is exactly but everyone should have an accurate
approximation, i.e. by using the same or a similar formula based on a tangible metric.

There are many metrics to Bitcoin but the one that all others depend on is the hash
rate. The security of the blockchain scales directly with the hash rate and so should
the price. A pricing formula can be all kinds of sophisticated but it needs to be simple
enough that anyone can do it in their minds. The initial price of this formula needs to
approximate the current market price to make it easier for everyone to adopt.

According to https://www.coinwarz.com/network-hashrate-charts/bitcoin-network-hashrate-chart,
the last recorded hash rate, as of this writing, was 97ehs (exa-hashes per second).
We can generalize it to 100ehs. The price has been moving around $10k so I'll use
these numbers to find a constant that will make it easy to derive the price from the
hash rate.

100 ehs / $10k = $0.01 <--- constant

What's the price of BTC? Simple: (current hash rate ehs / $0.01) = (97 ehs / $0.01) = $9700

Now the price will scale with the hash rate:

    ...

    at 1ehs, 1 BTC = $100

    at 10ehs, 1 BTC = $1k

    at 100ehs, 1 BTC = $10k

    at 1000ehs, 1 BTC = $100k

    ...

Buyers and sellers are still free to trade above or below the real price buy not as much as usual.

This is nothing but the old labor theory of value in which the value of an object is supposedly determined by the work needed to make that good, but the current accepted theory is the subjective theory of value which states the value of something is not determined by anything but the demand coming from individuals, and if you are questioning yourself what is the rational price of bitcoin? The answer is simple, whatever people want to pay for it.

[daarul50]

Every asset price is determined not only by fundamentals, balance of the company, or whatever metric. The price is determined mostly by investors expectations about the future.

https://www.investopedia.com/terms/m/marketsentiment.asp

For example, even if you metric is correct, but there is a strong felling that energy prices will go down, or that bitcoin will be banned in US, the price will fall.

strongly agree with your opinion.

it is never easy to make an assumption about something you say as a rational price where in fact that the cryptocurrency nature itself is always moving irrational because of the decentralized system.
besides that factor, it has been pretty popular especially these days when the world economic situation in uncertain position, that fundamentals taking big part on driving crypto price. am i wrong? i don't think so , you can look around in the past few days. 
which means you can not talk something rational, something makes sense when it comes to a market where nobody can control thw whole thing.
the price will stay volatile no matter what , nobody can really predicting correctly about the future bitcoin price yes it sounds speculative but it is what it is.

[Swordsoffreedom]

I don't understand how you related hash rates to the current price for BTC. I'm pretty sure that like every other coin out there, BTC price is determined by simple supply and demand though. Even if we do think of Rational Price as something different from normal price, determining it based on Hash rates seems to be wrong. The recent news and events affect supply and demand so if we kind of force it, we can say that it indirectly affects the price and thats quite a legitimate explanation.
Besides, Miners are just like us, speculating on BTC price. I doubt they could set the price of BTC depending on hash rates involved even if they wanted to.

Miners cannot have any affect in the bitcoin price as its as simple as they lend their electricity, Internet and mining device for a small commission and they cannot do much when it comes to pricing and infact users are losing interest in mining as it gives too little profit and I have stopped it as well if more users does then the transaction speed will be reduced that's all. As far as price is concerned it's purely demand and supply and people should get this straight into their head.

Not true. Miners do have impact on Bitcoin price. How would you explain why block halving affects the price so much. Simply it's because miners begin to receive smaller block rewards and they are not willing to sell those bitcoins at the same price anymore. So they don't put their bitcoins on the market until the price rises enough so that mining is profitable again.

[error08]

Every asset price is determined not only by fundamentals, balance of the company, or whatever metric. The price is determined mostly by investors expectations about the future.

https://www.investopedia.com/terms/m/marketsentiment.asp

For example, even if you metric is correct, but there is a strong felling that energy prices will go down, or that bitcoin will be banned in US, the price will fall.

The metric is necessary to establish a rational base price. Any deviation from the base price is irrational and shouldn't dominate the market.

While your point of view on metrics might be true and I agree if there is a rational base price to avoid massive dump, but it isn't the case for bitcoin price, yes it can be a reference but we know the price mostly defined by the market.
Not only bitcoin, everything in this world, the prices determined by two parties (buyer and seller), even for something precious which holds higher value like a diamond or luxury cars, if no one wants to buy, it means nothing "0" in the market.
If bitcoin price set by hash metric, then its price will always rise up since there always more people who want to become miners and more ASICs add to the network.

[Leyss]

Compiling any formulas for determining the price of bitcoin or any other decentralized cryptocurrency will be deliberately erroneous. Such a formula simply does not exist and cannot exist. The price of a decentralized cryptocurrency completely depends on the ratio of supply and demand in the market. These factors cannot be predictable. The actual price of the cryptocurrency is only the one that exists at the moment. In a moment, the real price for it will already be different.

[Wysi]

Compiling any formulas for determining the price of bitcoin or any other decentralized cryptocurrency will be deliberately erroneous. Such a formula simply does not exist and cannot exist. The price of a decentralized cryptocurrency completely depends on the ratio of supply and demand in the market. These factors cannot be predictable. The actual price of the cryptocurrency is only the one that exists at the moment. In a moment, the real price for it will already be different.

There were no prediction which were made in last one and half years have even reached closer to how the market has been and it will be foolishness to depend of predictions or analysis because we know very well those days are gone when it used to work but since there are too many big players involved in the bitcoin market we cannot predict how they can alter the demand and supply according to their plan which will affect the entire market and we are small fish trying to get benefited by these fluctuations.