Bitcoin Emission Trend and Forecast

Cryptocurrency is a type of digital currency, the issuance, and management of which is based on cryptographic methods. Usually, the emission of cryptocurrencies is decentralized. Most digital currencies have an upper limit on the amount they can issue. Bitcoin is no exception.

How Bitcoin Is Issued?

The essence of such an operation is the generation and building of new blocks in a chain connecting old and new data, confirmation of transactions through the calculation of cryptographic hash functions.

Bitcoin is issued in a logarithmic progression until it reaches 21 million bitcoins. The issue of currency is associated with the formation of new blocks with a halving of remuneration every 4 years (halving). As of mid-2021, 89% of bitcoins were issued. Given the increasing complexity of the network, the issue will be completed by 2140.

How Quickly Can an Investment in Bitcoin Pay Off with a Constant Current Rate, Its Fall or Growth?

As for the price of Bitcoin, it is characterized by sharp fluctuations, which are very difficult to predict, but approaches to assessing its future value still exist. Let’s simulate a few scenarios with a 10 MW data center. Input parameters:

  • An equal number of new blocks is added to the structure of distributed data in the bitcoin network — 52,560 annually.
  • The reward for the created block forms the emission of new bitcoins, which is halved every 4 years. For the period 2021-2028, 6.25 and 3.125 bitcoins will be formed per block.
  • Income: the share of the production capacity of the data center equipment in the hash rate in the total network hash rate, that is, the volume of all simultaneously connected servers in the world.
  • The network hash rate grows as the value of bitcoin rises, as demand for equipment increases and new capacities are added to the network.
  • Datacenter electricity cost — $0.03 / kWh.
  • The total hash rate of the data center is 385 PH / s.
  • Datacenter operating expenses — $0.53 million / year.

Financial performance under three scenarios (2022–2026):

  1. The cost of bitcoin is $50,000: payback is 5 months, the profit of the project is $59.37 million.
  2. The cost of bitcoin is $20,000: the payback period is 19 months, the project’s profit is $25.28 million.
  3. Bitcoin cost $100,000: payback 2 months, project profit — $133.5 million.

The growth in the turnover of cryptocurrencies, which is characterized by several specific features, also determines the risk of using cryptocurrencies in conditions of limited emission. This indicates the need for joint minimization measures for a more rational release of bitcoin.

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