Problem Set $3.$ You are using the Cost of Production method to estimate the value of bitcoin. After carefully

studying the mining activities in the Bitcoin blockchain, you think that miners will not upgrade their

computer equipment, $($particularly the graphic card $/$ GPU$),$ and they are moving to locations offering cheaper

electricity, at least in the next month.

$($a$)$ Should you conclude that bitcoin value would increase or decrease over the next month? Please explain

your reasoning in detail.

$($b$)$ What is the fundamental problem of this model? In other words, even if we can accurately estimate the

value for all variables in the equation, the theoretical value of bitcoin is still incorrect.