Forget Iran, mining in China is super cost-effective (with a chart of global Bitcoin mining electricity costs)

How much does it cost to mine one Bitcoin?

Author | Little Parker

Editor | Hao Fangzhou

When people buy a commodity, they will definitely ask, how much does it cost? Similarly, when you decide whether to buy Bitcoin, the first question that comes to your mind is, how much is it? After seeing the price on the trading platform, you may ask the second question: Why is it so expensive? Then there is a series of questions: What is the production cost of Bitcoin? Who is producing it? Can I mine it? ... All these doubts can be answered in our "Bitcoin Mining Research Report" released at the beginning of the month.

At the same time, we also hope to provide more specific data on this basis. For example, "How much does it cost to mine a Bitcoin in different countries?"

According to the conclusions in our research report, the main cost (also variable cost) of Bitcoin mining is electricity expenditure. Knowing the Bitcoin mining costs in different regions will help choose the deployment location of mining machines and avoid losses caused by currency price fluctuations.

To this end, Odaily Planet Daily Research Institute presents this "Global Bitcoin Mining Cost Chart", enjoy~

How was this picture calculated?

Our basic idea is to calculate the computing power required to mine each Bitcoin and the actual power consumption per unit of computing power. At the same time, the data in the above figure is based on the following known conditions and assumptions:

1. The total network computing power was 46.31EH/S at 14:30 on April 23, 2019;

2. The Bitcoin system produces one block every ten minutes on average;

3. The current reward for each block is 12.5 BTC, and the transaction fee reward is 3.27% of the block reward;

4. The hardware parameters are the mainstream Antminer S9i on the market, with a computing power of 14T and a power of 1320W;

5. The cooling power consumption ratio is 30%;

6. The electricity prices of various countries and regions refer to the Global Petrol Prices data.

In addition, the cost in the figure refers specifically to electricity costs, and does not include fixed investments such as infrastructure and mining machines. Given that China's infrastructure costs are about $100 per mining machine (low in the global market), if you need a more "realistic" cost, just add $100 to the data in the figure.

It is better to be in China than in Iran

Yes, you read that right, China is the country with the lowest mining cost. But you will also find that China's electricity prices are segmented.

In the previous research report, we introduced that China’s electricity prices are relatively complex, electricity resources are unevenly distributed, and electricity prices fluctuate between 0.06 and 0.5 yuan. Therefore, we divide it into three levels, and the corresponding mining electricity costs are US$507.6, US$1711.01, and US$4277.53 respectively.

According to official data, the mining cost corresponding to the average on-grid electricity price is US$4,562.7. Compared with the current price of Bitcoin at US$5,546.44, mining in China is profitable even with an electricity price of 0.5 yuan.

As for Iran, the "mining paradise" that miners have been dreaming of, the cost of mining is even higher than the average electricity price in China.

In addition, it should be emphasized that the hashrate distribution of various countries that we often see is not the physical distribution of hashrate (mining machines), but the data of the country where the hashrate network IP (mining pool) is located. Currently, mining pools are mainly concentrated in China, the Czech Republic, the United States, India, Iceland, Israel, and Russia. From the above figure, it can be seen that the Czech Republic, the United States, and Israel are all high-cost mining areas, so it can only be inferred that there are more mining pool servers running in these countries, but it is not cost-effective to deploy mining machines in these countries.

Distribution of mining pool computing power in different countries, source: Bloomberg New Energy Finance. Country refers to country of ownership

If you have any questions, please add WeChat (Little Parker: lmm662381) for communication.