Interaction with Bitcoin and other crypto-currencies involves certain costs. And although they are still much lower costs if you use any banking services, rates are gradually increasing.
The cost of storage of bitcoins grow
Currently, most people use centralized exchanges that profit from transaction fees and spreads — that is, the difference between orders to buy and sell. In much the same way banks earn. However, in the case of Bitcoin there is one more item of expenditure, which only increased. We are talking about storing BTC.
Independent developer of Bitcoin Tamas Blummer published a Medium post on this topic. As he said, this nuance is often left out of consideration, and it’s not quite right. He calls this the costs of “storage of other types of assets”, which currently reaches 2.1 per cent, if we are talking about storing Bitcoin.
Interestingly, in the cost of storage it provides bitcoin transaction fees if you move coins from wallet to wallet. These commissions are paid by the people who move the coins. And the size of the fee depends on the weight of the transaction in bytes, not the moved amount. Read more about the mechanics of pricing transfer BTC we wrote in this article.
Plummer also presented the timeline. It is possible to see that the number of paid coins to miners in transaction fees for the end of 2016 reached 50 thousand bitcoins. And at the end of 2019, these fees increased to 200 thousand BTC. Here it is.
The expert takes into account the payments to the miners in calculating the cost of storage of bitcoins, because in fact this is a fee for user transactions cryptocurrencies. They pay money to send coins to exchange and sell them, that is to dispense with these payments for transfer of coins in Fiat will not work. That is why the amount can be directly included in the index.
As the developer, the amount in dollar terms will decline at issue — that is, the release of new bitcoins. Of course, if there is no significant price spikes.
The production costs of the BTC are also an important factor, since miners are constantly forced to sell part of the newly kamineni bitcoins to cover their own costs. According to him, changes the margin of profitability can be seen through the prism of index of difficulty of mining.
If market prices are high enough to mine at a profit, then miners will just switch equipment. Accordingly, because of the reduction in competition and reduced the complexity of mining. During such market turmoil usually survive only players with more efficient and modern equipment. Owners free electricity does not count — they earn at any rate.
We already saw such an example recently in January 2019, when the price of Bitcoin was around 3400 dollars. This price Blummer and took it as a starting point to get the value of the cost of hodling BTC.
At the current price of around 8400 dollars per BTC mined each coin brings in about $ 5,000. When you consider that the rewards for mined block of Bitcoin is 12.5 BTC, and they are mined every 10 minutes, then the daily profit is approximately $ 9 million. If you divide this figure by the current market capitalization of Bitcoin at $ 150 billion, we get a rate of 2.19 per cent per annum for storage.
What do you think, whether to reduce the remuneration halving Bitcoin storage costs? If he can spur the growth rates of the largest cryptocurrencies? Share your thoughts in our cryptodata miners and hontarov. And don’t forget about Yandex Zen.
Subscribe to our channel in the Telegram. Bitcoin around the head!