Bitcoin
Market $2'588.47 +2.46%
Fair $2'377.64
Potential -8.14%

Formula

Formula

 

What is the Fair Value of Bitcoin?

The Fair Value is needed for valuing the attractiveness of an investor's assets.
Like any other asset (Currencies, Stocks, Commodities), Bitcoin has its Fair Value.

 

Do you provide buying and selling services of cryptocurrencies?

Do you provide buying and selling services for CryptoCurrencies?
ALFAquotes does not intend to Sell or Buy CryptoCurrency for its visitors.
The mission of ALFAquotes is the publication of independent data that CryptoCurrency Investors can use to make their decisions.

 

How do you calculate it?

ALFAquotes created a mining-based formula for calculating Bitcoin Fair Value.
Our formula takes all aspects of mining into account; the calculated Bitcoin value is not static but changes together with the mining industry.

Formula

The formula reflects the profitability of Bitcoin mining with a recoupment period of under 6 months.
The formula takes account of the price of the most profitable hardware for mining (Hardware_Cost), expenditure on electric power (Enerdgy_Costs), and the quantity of mined Bitcoin (Mined_BTC)

$$BTC\_Price = {Hardware\_Cost + Energy\_Costs\over Mined\_BTC}$$

Calculation of mined Bitcoin over 6 months:

$$Mined\_BTC = { Time \cdot R \over 2^{32} / HashRate} \cdot { \left( \sum_{x=1}^n {1 \over diff(x)} \right) }$$

where:
Time - is computation time in seconds (average time for difficulty to increase);
n - is the quantity of periods with differing degrees of difficulty over 6 months;
R - is the reward per block;
Diff(x) - is a function to determine the difficulty of any future period, based on historical data.
HashRate - is the power of the hardware used.

Leave your ideas about how to improve the formula in the comments: