How is Network Deficit Calculated?

I've seen this graph pop up around the interwebs, but never with an explicit explanation:

http://blockchain.info/charts/network-deficit

My question is how is this metric generated? Is it a comparison of the power and hardware costs versus returns?

economics

Charles Hoskinson

Posted 2013-04-26T01:30:37.697

Reputation: 969

Answers

This was described as showing the difference between transaction fees and the bitcoin miners income from block rewards.

So if a Block has 25 BTC generated and 1 BTC of fees, the network deficit would be 24 BTC. The amount in USDs is calculated at the spot rate at the time.

Stephen Gornick

Posted 2013-04-26T01:30:37.697

Reputation: 26 118

Thank you. I couldn't find anything in the bitcoin.it wiki – Charles Hoskinson – 2013-04-26T15:39:06.720

Asked: 2013-04-26T01:30:37.697

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Active: 2013-04-26T08:41:45.837