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> But consuming more electricity would produce more bitcoin. No, Bitcoin is produced at a fixed rate. If more power goes into mining, difficulty increases to

• Klathmon 9y ago
  Globally yes, but locally, that's not true at all. If I have 2x as much hashpower as I did yesterday, i'll get roughly 2x as much bitcoin as a reward (which over time will go down as the global hashrate goes up). In other words I'll get a larger percentage of global bitcoin production, which is fixed.
  • changchuming 9y ago
    You're talking about imperfections in the market. I.e. You having a cheaper source of power than everyone else which allows you to mine the same amount of bitcoins at lower costs and thus higher profits. Thus, some of the $27 million is not used on electricity and becomes profits instead. In reality, how likely is this scenario in which you have a persistent cheaper source of energy which other miners cannot access?
    • Klathmon 9y ago
      Pretty realistic. One of the largest US mining operations are said to be located in Seattle where there is dirt cheap hydroelectric. So are many of the Chinese operations. It's not as mich of a zero sum game as it might seem, it's more of a race to the bottom. If your competitors are running on cheaper electric, you'd better find some cheaper electric or they are going to increase the difficulty to the point that it's not profitable for you.