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Comment by jadeddrag | Hacker News Reader

If this $15M figure were true (and it probably isn't), at today's going rate of about $1K USD/BTC, miners as a whole are losing $11.4 Million in electrical costs. (assuming 25 BTC are paid out every 10 minutes, and ignoring miners fees. The value of all new mined coins is only 3600 BTC per day, worth about $3.6 Million USD.)

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That $15M figure is wildly speculative, and assumes an average wattage per gigahash that's more in line with the state of mining as much as 2 years ago, when GPUs dominated mining.

ASIC units (like my 14.5GH/s from two BFL units which pull less than 50W together) are far more efficient than the quoted 650W per gigahash, by up to two orders of magnitude, which would push the average for the whole network far below break-even.

KNC units are pretty close to 1W per gigahash.

Exactly my point. This $15M figure is completely wrong.

Ok, so $3.6M is our upper limit in terms of electricity costs... and I'd wager the electricity costs are close to the total payout. That's always been the trend in mining; the reward normalizes to the cost.

That's always been my frustration with the bitcoin network. It is a perfect zero sum game, so improvements in hashrate and increases in power consumption are not actually productive, just part of an arms race. Whoever consumes more electricity wins, assuming the miner operates in the black by some margin.

Edit: That said, the explosion in the BTC/USD exchange rate has probably thrown that balance way out of whack for the moment.

You have a good point, over the long run the payout and cost should reach equilibrium because of the difficulty adjustment. However, that's assuming the mining hardware is commoditized and widely available (everyone has the most energy-efficient hardware), and that the difficulty adjustment happens instantaneously rather than every week or two. I bet that there's some room for arbitrage in both of those assumptions...

Not quite a hard upper limit – I suspect there's a fair bit of mining going on using electricity that isn't being paid for by the person running the rig... (At the very least that single ~2.5W USB ASIC I can see across the office here…)

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