Turns out, when they said Bitcoin is going to the moon, they meant hashrate, not price. 🌕

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The relationship of hash rate and price is complex.

Going just by the difficulty adjustment algorithm we would expect hash rate to follow price entirely. But because there is a capital investment needed to purchase hash rate, and historically the cost to mine a coin has been significantly lower than the cost of a coin, we can add a measure of expectation to hash rate.

Miners then have two reasons for mining:

– to pay for the electricity they used to mine coins
– to purchase coins at a slight discount

The relative proportion between these two will change according to miner’s views of the future. That’s what’s happening now. We might assume that change is that miners have a positive expectation.

However, remember that they have no more special knowledge than the rest of us. That miners expect future price increases is no more indicative than an Investor buying on an exchange.


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