We cannot/do not want to get to $500,000 per BTC any time soon. Here is the
math behind it:
https://bitcointalk.org/index.php?topic=694401.0If BTC were to go to $500,00 in this era it would cause a catastrophic mining bubble:
$500,000 x 25 = $12,500,000
per block = $75,000,000
per hour $75 million per hour would drive the mining to attempt to use 675 GW.
This is about 30% of all the power generated on the planet.
So, in order to keep our power consumption under about 2% of world wide power production, we cannot/do not want the price to get to $500,000 before era 6, which is about 2033 or so.
Using my previously derived formula for the power consumption:
P = (6(50/2
e) + f)(x)(1 - g)/c [kW]
where:
x = exchange rate [USD/BTC]
e = era [0..32] (we are currently in era 1)
f = average fees per hour [BTC/hour]
c = cost of energy [USD/kWh]
g = average gross profit margin [unitless ratio]
we can look at the power consumption in each era assuming a price of $500,000 per BTC.
In order to make it simple I will make the following assumptions:
x = $500,000 per BTC
f = fees per hour will keep the coinbase above 6 BTC/hour (1 BTC/block) in all eras
c = $0.10 per kWh
g = 0.1 miner gross profit margin
Original target Subsidy Est Fees Power % of total world
Era starting year BTC/block BTC/hour GW power production
--- --------------- ----------- ---------- ----- ----------------
0 2009 50.00000000 0.00000000 1,350 58.41%
1 2013 25.00000000 0.00000000 675 29.20%
2 2017 12.50000000 0.00000000 337 14.60%
3 2021 6.25000000 0.00000000 169 7.30%
4 2025 3.12500000 0.00000000 84 3.65%
5 2029 1.56250000 0.00000000 42 1.83%
6 2033 0.78125000 1.31250000 27 1.17%
7 2037 0.39062500 3.65625000 27 1.17%
8 2041 0.19531250 4.82812500 27 1.17%
9 2045 0.09765625 5.41406250 27 1.17%
How does increased prices of BTC per USD increase the amount of power required to mine? The amount of effort required to mine isn't based on price but rather the amount of blocks that have been mined alredy...the price is meaningless.
Thanks.