The Yin and Yang of Bitcoin

Hodling & Mining, the two dragons of Bitcoin (photo: Panels of Dragons Yin Yang)

Prologue: Price-Performance Ratio of a product

“Hello… Hello?” — Happy owner of a crappy smartphone

Price-Performance Ratio of Bitcoin’s PoW


Bulls and Bears

Price-Performance Ratio & Market Price (market price data from bitcoincharts and with a linear interpolation used for missing data points)

Yin (Hodling)

Upper bound: Bitcoin Steroïds

Lower bound: Bitcoin Arctic

Yang (Mining)

  • A=>B / A’=>B’ (a few months before a halving): Hashrate growth and PPR start to increase.
  • B=>C / B’=>C’ (around the halving): Hashrate growth and PPR decrease.
  • C=>D / C’=>D’ : Market price starts to increase. Hashrate growth and PPR increase again.
  • D=>A / D’=>… : A “bubble” pops. Hashrate growth and PPR decrease again… until a new cycle begins.

“Technical analysis”

PPR “Resistance” levels

Let’s break some assumptions

The PPR Cycles

PPR Cycles
  • Phase 1: Market Price increases — Hodling decreases / Hashrate growth increases => PPR increases (the system becomes temporarily less efficient).
  • Phase 2: Market price decreases / bubble pops — Hodling increases / Hashrate growth decreases => PPR decreases to a new low.






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