What is the cost of bitcoin mining, excluding electricity?

All else being equal, as new generations of miners are introduced, the cost of mining bitcoin will continue to fall due to the improved efficiency ratio of the ...

Mar 13,2023 | SARAH

All else being equal, as new generations of miners are introduced, the cost of mining bitcoin will continue to fall due to the improved efficiency ratio of the new miners.

Bitcoin's price is made up of an inherent (intrinsic) value and an external value. The energy1080 ti mining consumption cost of mining out each bitcoin is defined here as its minimum intrinsic value (the lower bound of the intrinsic value), while the external value is the value generated by speculation.

Bitcoin Mining Fundamentals

Let's start with a basic overview of current bitcoin mining. The Bitcoin network-wideantminer s19 watts arithmetic power is currently 40.419 EH/s, the block reward is 12.5 BTC, and 6 blocks are generated every hour, according to trinsicoin.com. In this paper, the EbangEbitE10 mining device with the highest energy efficiency ratio is chosen; its arithmetic power is 18TH/s and energy consumption is 1.65kW/h. The mining electricity cost is then defined as 0.07kW/h based on the average industrial electricity cost.

The following variables are included in the calculation in this paper:

m = a single miner's arithmetic power (TH/s)

em=A single miner's energy consumption (kWh)

c = electricity cost (kWhUSD)

Blocks per hour =

r=block incentive (btc)

m=Total number of simulated miners

cmb=Electricity cost per miner per block consumed (USD)

v=intrinsic Bitcoin's value (USD)

To begin, determine the total number of simulated miners m for the best case (all miners with the highest energy efficiency ratio).

Second, divide individual miners' energy consumption (in kWh) by the number of blocks antminer s19 for salefound per hour, and multiply the result by the cost of electricity per kW to calculate the energy cost per miner per hour, cmb.

Finally, the total system energy cost per block divided by the number of bitcoins generated per block is the lower bound on the intrinsic value generated by bitcoins.

In the current situation, there are a total of 2245,508 miners, with an energy consumption of $0.019 kW/h per miner, resulting in a calculated energy cost of $42,670 to generate a block. Mining costs $3413.62 per BTC at the current block reward of 12.5 BTC.

With a 6% speculative rate and the lowest intrinsic cost (i.e. mining cost), the external value is $204 at the current price of $3618 for Bitcoin.

Following this logic, the same calculation yields a minimum mining cost of $92.60 for ETH with a 2% speculation rate, $293.23 for BitcoinABC with a -183% speculation rate, and $346.10 for BSV with a -248% speculation rate.

Of course, all else being equal, as the new generation of miners continues to roll out, the cost of bitcoin mining will continue to fall due to the improved efficiency ratio of the new miners. The E10 used in this article, as well as the E11, which is about to hit the market, claim to provide 44TH/s of arithmetic power while consuming only 2.0kWh of energy. Based on this information, the cost of bitcoin mining can be cut in half to $1692.71 under ideal conditions.