That means that the total cost of all the mining divided by the outstanding value of BTC should approximate the floor.
Except when it doesn't. When it becomes unprofitable to mine, all of the miners turn off their machines, and the network dies, it'll go to zero.
Complicating factor is the miners who have free electricity, e.g., setup hooked up to their own solar farm or natgas flare. For them, the cost of mining is the capital investment over their output, so they'd keep their machines running as marginal cost of new energy is essentially zero, but the employees to keep it running? If we're down to very few mining machines running, how quickly does the difficulty scale downwards — fast enough to keep it running?
That means that the total cost of all the mining divided by the outstanding value of BTC should approximate the floor.
Except when it doesn't. When it becomes unprofitable to mine, all of the miners turn off their machines, and the network dies, it'll go to zero.
Complicating factor is the miners who have free electricity, e.g., setup hooked up to their own solar farm or natgas flare. For them, the cost of mining is the capital investment over their output, so they'd keep their machines running as marginal cost of new energy is essentially zero, but the employees to keep it running? If we're down to very few mining machines running, how quickly does the difficulty scale downwards — fast enough to keep it running?