3 ms·
The natural equilibrium is where it costs a little less than $1 to make $1 worth of bitcoin. The system isn't quite at equilibrium now because of price uncertai
by tlb 13y ago
The natural equilibrium is where it costs a little less than $1 to make $1 worth of bitcoin. The system isn't quite at equilibrium now because of price uncertainty and the lag time to order new mining equipment, but the invisible hand is working on it.
- cperciva 13y agoKeep in mind that the equilibrium is where the total cost to make $1 of bitcoin is $1 -- not where the electricity cost is $1. The relative weight of electricity vs. amortized hardware cost will vary, of course.
- rahimnathwani 13y agoIf you're doing accounting (backward-looking financial reporting) you should look at amortised cost. If, on the other hand, you're making a decision about whether or not to mine, then you care only about marginal (cash) costs. If you already paid for your hardware (or already committed to paying for it), then there's zero additional cost, unless (i) there are significant maintenance costs or, more likely (ii) you could recoup some of the cash by selling the equipment if you stop mining. I'm ignoring time value of money, and also the drop in the resale value of the equipment. (Deliberately avoiding the work 'depreciation' here as the accounting meaning the every day meaning confuse the issue.)
- iSnow 13y agoThis is going to be interesting since the volatility of bitcoin price in USD is so high. If you have +15% one day and -30% two days after, this completely destroys your forecast if and when mining is still profitable.