Bitcoin’s real value? It's in the Hashrate
How energy, computation, and cost give Bitcoin its economic backbone
Ask a dozen economists what gives something “intrinsic value,” and you’ll get a dozen definitions, scarcity, utility, trust, labour input, or perhaps just belief. But when it comes to Bitcoin, one source of intrinsic value often gets overlooked: the hashrate.
Far from being just a speculative digital token, Bitcoin is secured by energy, computation, and an ever-growing web of decentralised machines racing to keep its network safe. That effort, measured in hashrate, is not free. It costs real money (fiat), hardware, electricity, and time.
Let’s explore why the hashrate matters, how it’s grown exponentially, and what it tells us about Bitcoin’s base-level value.
⚙️ What is Hashrate, and why does it matter?
Hashrate is the total computing power used by miners to secure the Bitcoin network. Every 10 minutes or so, miners compete to solve a cryptographic puzzle. The winner adds a new block to the chain and earns a reward.
The higher the hashrate:
The more secure the network becomes.
The more expensive it is to attack or manipulate.
The more real-world resources are being committed to Bitcoin’s defence.
In other words, hashrate is proof of work in action, and it anchors Bitcoin’s economic and technical integrity.
📈 Exponential growth: a sign of confidence
Bitcoin’s hashrate has skyrocketed over the past few years. As of late 2024, it reached an all-time high of 693 million terahashes per second (TH/s). That’s more than six times the hashrate seen just five years ago.
Why does this matter?
It reflects growing investment by miners in better hardware.
It suggests long-term confidence in Bitcoin’s future rewards.
It increases the cost to attack the network, making it stronger with time.
Bitcoin’s hashrate isn’t just a technical metric, it’s a global indicator of belief, capital commitment, and economic cost.
💸 Cost of production: Bitcoin’s floor price?
Because mining consumes vast amounts of electricity and capital, Bitcoin has a real production cost, and this cost often acts as a price floor in the market.
Recent data (Q3 2024) reveals:
The weighted average cost to mine 1 BTC among publicly listed miners is around $55,950. That’s up from $49,500 the previous quarter.
But costs vary widely by country:
In Iran it costs $1,324 USD.
In Kazakhstan it costs $8,200 USD.
In the United States it costs $46,000 USD.
In Ireland it costs $321,000 USD!
Miners operating in low low-cost energy countries have an edge. But regardless of location, no one mines Bitcoin for free, and that’s precisely the point.
🧮 Price = cost of production?
Is Bitcoin’s price directly tied to its cost to produce?
Not exactly, but there’s a strong relationship over time. When the market price drops below production cost, miners capitulate. Hashrate falls. Supply tightens. Eventually, price finds support. In that way, Bitcoin’s production cost forms a kind of economic gravity. It may not determine daily price moves, but over the long run, it creates a fundamental basis for value.
And unlike fiat currency, Bitcoin’s cost of production can’t be altered at the stroke of a policy pen. It’s encoded in mathematics and economics.
🔑 The bigger picture: Hashrate as intrinsic value
Many assets, stocks, bonds, even fiat currencies, rely on confidence in institutions. Bitcoin relies on a network of independent actors, each committing time, energy, and hardware to secure the system.
That commitment, quantified through hashrate and cost of production, is what gives Bitcoin a kind of economic weight. It’s not just code. It’s not just speculation.
It’s backed by global energy, market competition, and thousands of machines working non-stop to secure your satoshis.
🧭 Final thoughts
Bitcoin’s hashrate is more than a technical curiosity, it’s a reflection of the network’s intrinsic economic value. As hashrate climbs and production costs rise, Bitcoin becomes harder to replicate, harder to attack, and harder to ignore.
In a world of digital money printed at will, Bitcoin stands apart, not because of marketing or hype, but because of measurable, auditable, and costly proof-of-work.
So the next time someone says Bitcoin has no intrinsic value, point them to the hashrate, and the billions of dollars in energy and infrastructure behind it.
It’s not just code.
Its computation.
Its cost.
Its commitment.
If you enjoyed this article please hit ❤️, or share it with a friend who believes that Bitcoin has no intrinsic value. Educate them. Thanks for reading.