What’s the cost of mining a Bitcoin

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Posts: 6
Joined: Fri Jun 22, 2018 3:59 pm

What’s the cost of mining a Bitcoin

Postby parishy » Wed Jul 11, 2018 8:38 am

What’s the cost of mining a Bitcoin
I have read numerous articles/posts online about the cost of mining a bitcoin. I have also heard at numerous conferences/events that the figure is at circa $4000. (No substantiation offered for this figure, but the figure I have heard muted usually sits around this value). I have often heard it as the reasoning bitcoin won’t drop below $4000 a coin.

Whilst I accept there will never be an exact figure for the price due to constantly varying factors ( cost of energy, hardware, labour/management, privacy etc etc). I do think we should be able to have an indicative cost/benchmark to create a bitcoin based on existing data. Maybe $4k is the correct figure, I am just interested in how that is calculated. I am not trying to say there is a correlation between the cost of mining the asset V the market value, but it can help give some indication of the “value/cost” for creating the asset, at the point of creation. This obviously won’t factor in any future value or use cases, it is merely a means of measuring the cost of creating the digital asset for use at that point in time, based on the real world consumption costs associated with creating it.

Example just taken off Twitter: The correct way to estimate Bitcoin energy usage by ######, not the invalid methodology used by Digiconomist cited in MSM FUD articles.

“Annual consumptiom: 35TW/year Capacity: 4000MW % world energy: 0.03% Cost: 1.7B$/year

Efficiency gains help offset increased consumption. This gives a total cost of $1,700,000,000.00 for worldwide consumption. “

Based on the above “calculation” that would mean each bitcoin has a creation cost of

1800 (bitcoins mined a day) X 365 ( days per year) = 657,000 Bitcoins a year (2018) $1,700,000,000/ 657,000 = $2,587.52 per bitcoin.

Obviously there are a lot of assumptions in the above assessment. -The figure doesn’t include a cost for hardware/maintenance. -The figure doesn’t include any housing or management costs. -The energy $ value makes an assumption of $TW which does change considerably depending on location.

Any links or info that would help add some meat to this would be appreciated.

Mucho Mucho
Posts: 15
Joined: Wed Jun 13, 2018 4:14 am

Re: What’s the cost of mining a Bitcoin

Postby Tomas_Novak » Wed Jul 11, 2018 10:57 am

1 BTC = 18000kW

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