Comparison of global mining costs

Just connect your computer to the Internet and you can make money out of thin air.

I believe most people's eyes light up immediately when they hear this idea.

This is mining, a new way to make money in the past few years. It has frequently appeared in the public eye in 2017 as the price of Bitcoin skyrocketed. It is a highly profitable industry that makes money without doing anything.

However, as a large number of miners rush in, they may have to adjust their posture from lying down to standing up, because mining is becoming increasingly complex and full of competition and uncertainty.

The revenue from mining can be roughly calculated like this:

Revenue = Bitcoin quantity x Bitcoin price - electricity cost - mining machine cost - labor and site cost

In this profit model, the chaotic fluctuation of currency prices makes income uncontrollable, and if you want to make more money, you can only spend less.

The performance of the mining machine determines the mining efficiency, and it can even be said to determine "whether you can mine Bitcoin". When the supply is tight, the market price basically doubles in a week. As for labor and venue, they are necessary costs.

Electricity bills are a breaking point.

The huge difference in electricity prices around the world means that for the same Bitcoin, you can earn more in some countries.

The following figure is a research result initiated by Elite Fixtures, which uses three professional mining machines, AntMiner S7, AntMiner S9 and Avalon 6, to mine, and thus obtain the average cost of mining one Bitcoin. The electricity price is derived from data provided by local governments of various countries and the International Energy Agency.

With this data, mining can become more targeted.

Venezuela is the country with the lowest mining cost, where it only costs $530 to mine one bitcoin, while the mining cost in South Korea is as high as $26,200, which is almost three times the current price of bitcoin in South Korea. Considering the high premium of bitcoin in South Korea, even if compared with the highest price of $23,000 a month ago, mining in South Korea is still a loss-making business.

Many people think that Western European countries such as Germany and Denmark are suitable for mining Bitcoin. In fact, the mining cost in any of these two countries is more than US$4,000.

A study conducted by Cambridge University last year showed that the distribution of mines and electricity prices follow the same path, so the Far East has a huge advantage in this regard.

In China, the cost of mining one Bitcoin is $3,172. Given that the recent price of Bitcoin has fluctuated around $10,000, the rate of return can still reach 70%, but the government is constantly clearing and shutting down domestic mining farms, and the invisible regulatory costs have eliminated the electricity price advantage.

There are some countries where electricity prices are more expensive but government regulation of Bitcoin and mining is more relaxed, such as Japan.

In addition, some mining pools and ICO projects are considering adopting green renewable energy to save costs and reduce the impact on the environment.