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> raising electricity prices or cost to mine bitcoin which helps push up the price of bitcoin The price of bitcoin is not driven by electricity prices, or more
by nybble41 5y ago
> raising electricity prices or cost to mine bitcoin which helps push up the price of bitcoin
The price of bitcoin is not driven by electricity prices, or more generally by the cost of mining. Bitcoin supply works at a fixed rate: one new block of 6.25 BTC is mined (on average) every ten minutes. Every four years the BTC reward per block is cut in half. More mining effort (higher hash rate) just raises the difficulty threshold so that the interval remains 10 minutes per block. Lower mining effort, of course, has the opposite effect. Higher mining costs would drive marginal miners out of business and lower the hash rate but otherwise have no impact on the supply of new bitcoins or the ability to process transactions.