• The Bitcoin difficulty per issuance is a PoW pricing model based on two metrics: the mining difficulty and the issuance.
• The model divides the difficulty term with the „issuance,“ the total amount of new coins added to the circulating supply, to calculate the cost of 1 BTC.
• An analyst on Twitter recently pointed out that the BTC price is almost double the cost of production now.
The Bitcoin difficulty per issuance is a proof-of-work (PoW) pricing model used to estimate the cost of a single BTC. This model is based on two separate metrics, the mining difficulty and the issuance.
The mining difficulty is a mechanism of the Bitcoin network set to keep the supply production around a constant value. Whenever the Bitcoin hashrate, a measure of the total amount of computing power connected to the blockchain, changes its value, the rate at which miners produce new blocks also fluctuates. To counter these fluctuations, the network adjusts the difficulty exactly as much as is needed, encapsulating all the mining-related expenses that miners incur.
The issuance is the total amount of new coins added to the circulating supply. To calculate the cost of 1 BTC, the difficulty per issuance model divides the difficulty term with the issuance.
Recently, an analyst on Twitter pointed out that the BTC price is almost double the cost of production now. This means that the difficulty per issuance model 2.0 level is quickly approaching.
Given the ever-increasing demand for Bitcoin and the steady increase in its mining difficulty, the current cost of production is likely to be maintained or even exceed the current price of BTC in the future.
It is important to note that the difficulty per issuance model is just one way of estimating the cost of BTC production. As market conditions and mining difficulty continue to evolve, the model should be used in conjunction with other metrics to get a better understanding of the true cost of Bitcoin production. That said, it is clear that the current cost of production is significantly lower than the current BTC price, which indicates that there is room for further price appreciation in the future.