Nice summary you got over there, Last of the V8s brought this article to our attention in the difficulty thread, for those who don't want to read even the short version of yours, the study assumes the following.
1- The average cost for mining worldwide is 3 cents per Kwh
2- In 12 months from now bitcoin hashrate will double given that bitcoin prices increase by 25–35%
And here are my thoughts on their conclusion
Topic: Bitcoin Mining Hashrate and Power Analysis | BitOoda Research (Read 182 times)
I will try to summarize some of the information provided by Fidelity Center for Applied Technology (FCAT) to provide more data and analysis on Bitcoin mining Read it here ---> Bitcoin Power Analysis Hashrate Implications and Miner Economics.
Section I: Bitcoin Power Capacity Analysis: How much, where, and at what price
It has been estimated that the Bitcoin mining industry has access to at least 9.6 GW of power, assuming that all of the Hashrate that remained on the May 17 trough was among the most profitable new generation of mining platforms - the "S17 Class*" and all devices that were shut down between May 10 - May 17th were from the older generation, and the "S9-class*" less profitable machines.
We also assume a PUE (Power Usage Effectiveness) of 1.12 across all relevant calculations, which means that for every 1MW used to directly mine Bitcoin, another 120kw is used to run everything else, including cooling systems, lighting, servers, switches, etc.
We assess that the BTC mining industry utilizes ~67% of 9.6GW available power capacity, growing at ~10% per annum, powering 2.8mm dedicated Bitcoin mining rigs.
Estimated mining capacity is roughly 50% in China, with the US accounting for another 14%, then Canda, russian,..etc
In our assessment, 50% of Bitcoin mining capacity pays 3c or less per kWh. it means lower revenues, and consequently, miners who have high energy costs turn either to lower energy cost areas or shut down.
Thus, the average monetary cost of 1 BTC mining is around $ 5,000, with a maximum confidence of approximately $ 6000, without other expenses, depreciation, and other costs.
However, there is a small percentage of bitcoin that is extracted at a higher cost of cash than the current price of bitcoin, and a minimum of $ 14,000, and perhaps the reasons that drive them to continue are energy purchase obligations, among others.
We note that the S9 class needs less than 2c/kWh to reach even in the current Hashrate network, and it is likely that you will need lower energy prices in order to remain sustainable while Hashrate continues to increase.
If mining with S9 class rigs, it would take about 70 devices and over 100kW, and correspondingly more maintenance and operations labor cost and power overhead to generate the same 1PH/s of Hashrate
Section II: Some surprising conclusions on the relationship between Hashrate growth and China’s flood season
The Southwestern provinces of Sichuan and Yunnan face heavy rain from May to October, causing an increase in hydropower production during this time and thus selling at cheaper prices (Where it is paid about 1c / kWh.)
As shown in the graph below, there is a noticeable difference between average price gains during flood and drought seasons
capital accumulation followed by equipment purchase, delivery and deployment is reflected more broadly in the correlation between price appreciation (which supports capital accumulation) and Hashrate growth 4–6 months later
Section III: Bitcoin Hashrate Growth Projections: How much, by when, why, and what could slow (or accelerate) growth.
Bitcoin network can exceed 260EH/s in Hashrate in the next 12–14 months, led by a modest increase in available power capacity from 9.6 to 10.6GW and an upgrade cycle that will replace older generation S9 class rigs with newer S17 and next-generation S19 class rigs
We believe that a low 3 nm capacity and potential initial low yield will lead to 5 nm operations is the mainstay of ASIC development and production until 2022. For these reasons, we believe that the S19 class excavators will account for the bulk of the shipments in the next 24 months,
So if the Hashrate network increases, the miner's share of the Hashrate total and thus Bitcoin flow decreases. If Bitcoin does not rise to keep pace with the increase in Hashrate, profitability will decrease and a new balance in Hashrate may be created significantly lower than our expectations here.
The dollar value of mined BTC will decrease over time, which will decrease profitability unless Bitcoin price goes up enough to make up for it.
Current Target Network Hashrate ~ 124EH / s and current BTC price of $ 9220, daily revenue per PH / s is ~ $ 70. If the Hashrate network would rise to 260EH / s, as we expect during the summer of 2021, Bitcoin would need $ 19,500 in order to have the same $ 70 in daily revenue per PH / s
What if the price remains the same? At what point will Hashrate not grow? If the power price is 1c/kWh, the S9 drilling rig can continue to operate up to 180HH/s Hashrate Network. At 3c/kWh, the S19 series devices can maintain operations of up to 295EH/s.
However, the devices will fail to recover the capital cost in Hashrates much less than 295EH/s.
If Bitcoin's price will steadily rise to $ 19k in two years at 40% + annually, then S19 class platforms will remain viable even at 5c / kWh power cost
Full report ----> https://medium.com/@BitOoda/bitcoin-mining-hashrate-and-power-analysis-bitooda-research-ebc25f5650bf
Read more and source ----> http://bitooda.io/public-files/Bitcoin%20Mining%20Hashrate%20and%20Power%20Analysis.pdf
* Use "S17 Class", "S9 Class", and "S19 Class" as general terms to include Bitmain devices as well as competitors with similar specifications
source: click me
Section I: Bitcoin Power Capacity Analysis: How much, where, and at what price
It has been estimated that the Bitcoin mining industry has access to at least 9.6 GW of power, assuming that all of the Hashrate that remained on the May 17 trough was among the most profitable new generation of mining platforms - the "S17 Class*" and all devices that were shut down between May 10 - May 17th were from the older generation, and the "S9-class*" less profitable machines.
We also assume a PUE (Power Usage Effectiveness) of 1.12 across all relevant calculations, which means that for every 1MW used to directly mine Bitcoin, another 120kw is used to run everything else, including cooling systems, lighting, servers, switches, etc.
source: click me
source: click me
We assess that the BTC mining industry utilizes ~67% of 9.6GW available power capacity, growing at ~10% per annum, powering 2.8mm dedicated Bitcoin mining rigs.
Estimated mining capacity is roughly 50% in China, with the US accounting for another 14%, then Canda, russian,..etc
source: click me
In our assessment, 50% of Bitcoin mining capacity pays 3c or less per kWh. it means lower revenues, and consequently, miners who have high energy costs turn either to lower energy cost areas or shut down.
source: click me
source: click me
Thus, the average monetary cost of 1 BTC mining is around $ 5,000, with a maximum confidence of approximately $ 6000, without other expenses, depreciation, and other costs.
However, there is a small percentage of bitcoin that is extracted at a higher cost of cash than the current price of bitcoin, and a minimum of $ 14,000, and perhaps the reasons that drive them to continue are energy purchase obligations, among others.
source: click me
We note that the S9 class needs less than 2c/kWh to reach even in the current Hashrate network, and it is likely that you will need lower energy prices in order to remain sustainable while Hashrate continues to increase.
If mining with S9 class rigs, it would take about 70 devices and over 100kW, and correspondingly more maintenance and operations labor cost and power overhead to generate the same 1PH/s of Hashrate
source: click me
Quote
In summary: we estimate that there is about 9.6GW of available power capacity for mining Bitcoin, with a current utilization in the mid 60% range. This capacity has a median power price of ~3c/kWh and a median $5000 cash cost to mine 1 BTC. We estimate China accounts for about 50% of global capacity, while the US follows with about 14%. A significant portion of Chinese capacity migrates to take advantage of lower power prices during the flood season, examined in detail in Section II.
Section II: Some surprising conclusions on the relationship between Hashrate growth and China’s flood season
The Southwestern provinces of Sichuan and Yunnan face heavy rain from May to October, causing an increase in hydropower production during this time and thus selling at cheaper prices (Where it is paid about 1c / kWh.)
As shown in the graph below, there is a noticeable difference between average price gains during flood and drought seasons
source: click me
capital accumulation followed by equipment purchase, delivery and deployment is reflected more broadly in the correlation between price appreciation (which supports capital accumulation) and Hashrate growth 4–6 months later
source: click me
Quote
The available and underutilized power capacity, capital accumulation from internal generation by the industry (aided by China’s hydro season), and external funding, as well as diminishing revenue per PH/s, all play a role in the future growth of Hashrate. We examine the future of hash in Section III.
Section III: Bitcoin Hashrate Growth Projections: How much, by when, why, and what could slow (or accelerate) growth.
Bitcoin network can exceed 260EH/s in Hashrate in the next 12–14 months, led by a modest increase in available power capacity from 9.6 to 10.6GW and an upgrade cycle that will replace older generation S9 class rigs with newer S17 and next-generation S19 class rigs
source: click me
We believe that a low 3 nm capacity and potential initial low yield will lead to 5 nm operations is the mainstay of ASIC development and production until 2022. For these reasons, we believe that the S19 class excavators will account for the bulk of the shipments in the next 24 months,
source: click me
So if the Hashrate network increases, the miner's share of the Hashrate total and thus Bitcoin flow decreases. If Bitcoin does not rise to keep pace with the increase in Hashrate, profitability will decrease and a new balance in Hashrate may be created significantly lower than our expectations here.
source: click me
The dollar value of mined BTC will decrease over time, which will decrease profitability unless Bitcoin price goes up enough to make up for it.
Current Target Network Hashrate ~ 124EH / s and current BTC price of $ 9220, daily revenue per PH / s is ~ $ 70. If the Hashrate network would rise to 260EH / s, as we expect during the summer of 2021, Bitcoin would need $ 19,500 in order to have the same $ 70 in daily revenue per PH / s
source: click me
What if the price remains the same? At what point will Hashrate not grow? If the power price is 1c/kWh, the S9 drilling rig can continue to operate up to 180HH/s Hashrate Network. At 3c/kWh, the S19 series devices can maintain operations of up to 295EH/s.
However, the devices will fail to recover the capital cost in Hashrates much less than 295EH/s.
source: click me
If Bitcoin's price will steadily rise to $ 19k in two years at 40% + annually, then S19 class platforms will remain viable even at 5c / kWh power cost
source: click me
Quote
In conclusion, we believe that the Bitcoin Network Hashrate could reach 260EH/s in 12 months and 360 EH/s in 24 months. However, this is somewhat reliant upon the price of Bitcoin appreciating or being expected to appreciate at 25–35% annualized, as per our model. We do not model or forecast the future price of Bitcoin, but merely reflect the impact of potential price scenarios on Hashrate growth, power consumption and mining industry capital investment and profitability. Variance from this range could delay or accelerate Hashrate growth. Bitcoin price and the availability of external capital to bridge the funding gap are potential constraints to the industry’s ability to ramp up Bitcoin mining capacity to 360 EH/s, but the capacity to produce or assemble the needed semiconductor chips is not.
Full report ----> https://medium.com/@BitOoda/bitcoin-mining-hashrate-and-power-analysis-bitooda-research-ebc25f5650bf
Read more and source ----> http://bitooda.io/public-files/Bitcoin%20Mining%20Hashrate%20and%20Power%20Analysis.pdf
* Use "S17 Class", "S9 Class", and "S19 Class" as general terms to include Bitmain devices as well as competitors with similar specifications
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