How many mhash per bitcoin miner
While grosly inaccurate, this shows that mining is quite profitable, and that Bitcoin price would have to fall a lot for mining to stop being profitable. Thus there is a direct relationship between energy cost and the difficulty. This is all very confusing, but we can see that faster hardware and more of it drives the cost of mining up and the rlationship between the difficulty and the cost of mining a Bitcoin is linear. Faster hardware enables higher hash rate at improved energy efficiency, and the difficulty adjusts to keep the rate of blocks and supply of new BTC at 10 minutes.
The cost factor behind Bitcoin is energy, and spending more energy on mining makes a Bitcoin more expensive and less profitable.
So far we have not seen any news reports of mining facilities being sabotaged, which probably means miners are not enemies. I will need to think on this some more as there are a lot of moving parts.
But if I can make a cursory conclusion here, it is that industrial mining is and will remain very profitable for some time. How much does it cost in electricity to mine a Bitcoin? As of Sep 28, , according to blockchain. An S9 uses W, which means that in 1 hour it consumes 1. First we need to consider the total Bitcoin mining rewards that are available each day. If we ignore any need to pay other overheads then that can in theory just go on paying for new hashing hardware.
Of course this isn't really possible and our miners still need to deduct money for equipment space, cooling, salaries, replace failed hardware, taxes and of course any profits. We can get an upper bound this way though, so it's still useful. As new hardware goes online, older, far less efficient devices, drop off the network so the additional capacity isn't purely additive.
A percentage of our original capacity will have been lost this way and other losses will occur because of equipment failures. All this suggests that for the moment, at least, hashing capacity is being added at a rate that is probably not even close to breaking even for many of those concerned. Total mining rewards are being fully absorbed by new hardware, yet those other overheads are very real.
Most of this recently added hashing capacity was prepaid when the BTC price was much higher and expectations of returns were equally higher. The past few months will have certainly curtailed much of that enthusiasm. It seems very likely that in the short term a lot more older mining hardware will have to shut down and the purchase of newer hardware will slow down unless the BTC price recovers significantly.
This probably has the largest impact on anyone looking to mine on a commercial scale because they have to generate profits to return to investors as well as cover costs. It seems inevitable that technology will no longer offer a path to dramatically higher hashing rates at the same capital and operating costs.
That can only mean one thing, hashing rate increases will become much more incremental. There is some evidence that this is already happening and where only a few months ago hashing rates were increasing 10x every 4 months, they're now starting to take longer.
This no longer seems surprising given what we have just calculated. In order to better understand this it seemed a good model was required. I built a simulation written in C that calculates mining behaviour using a more refined version of the ideas presented above if anyone is interested in the details then please contact me.
As with all models there are some assumptions, so here are the main ones:. Let's look at the prediction.