The Bitcoin Mining Breakdown: Is mining still pro table?
We provide an updated estimation of the energy consumption of the Bitcoin network, and a calculation of the evolution of the production cost of Bitcoin over time. Using these data, we conclude that since June 2018 Bitcoin mining is no longer pro table for commodity miners without access to electrici...
| Authors: | , , |
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| Format: | article |
| Publication Date: | 2019 |
| Country: | España |
| Institution: | Universidad Autónoma de Madrid |
| Repository: | Biblos-e Archivo. Repositorio Institucional de la UAM |
| Language: | English |
| OAI Identifier: | oai:repositorio.uam.es:10486/710610 |
| Online Access: | http://hdl.handle.net/10486/710610 https://dx.doi.org/10.1016/j.econlet.2019.05.044 |
| Access Level: | Open access |
| Keyword: | Bitcoin cost-bene t analysis cryptocurrency Informática |
| Summary: | We provide an updated estimation of the energy consumption of the Bitcoin network, and a calculation of the evolution of the production cost of Bitcoin over time. Using these data, we conclude that since June 2018 Bitcoin mining is no longer pro table for commodity miners without access to electricity prices below 0.14 $/kWh. This phenomenon explains why many Western miners have dropped out of the circuit, further increasing the centralization of mining activ- ity in China. In addition, we estimate that the marginal cost of the production of bitcoin is around 1,952 US dollars. Below this price the cost of mining would not be pro table, even with the most e cient equipment and the lowest pos- sible price for the energy required. This could lead to a massive exit of the biggest mining players, with unpredictable consequences for the future of this cryptocurrency. |
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