What if you don’t have to pay ~ $43,000 to stack 1 Bitcoin?
If you are the owner of ~ 2,050 S19j pros (Bitcoin Miners), today you would mine 1 BTC and only pay $11,241.43 in electricity expenses (assuming a $0.075 per kWh hosting rate).
How is this calculated?
Daily revenue can be calculated by multiplying Bitcoin’s hash price by the number of TH a machine can produce. The current hash price is ~ $0.21. Hash price is determined by the price of Bitcoin and network mining difficulty. As price and mining difficulty change over time, it can significantly change how much revenue each machine generates.
Daily cost can be calculated by dividing a machine's watts by 1,000 (kW), multiplying by the electricity rate ($/kWh), and multiplying by 24 (hours in a day).
Another thing to note is even under an extreme price drop to $15,000 or lower, the cost to mine would eventually start dropping! This would be due to inefficient old-generation miners dropping off the network resulting in network difficulty dropping.
Machine Value Over Time
While it’s important to determine whether your rigs are producing a positive cash flow, you also should consider the future appreciation or depreciation of the machines you purchase.
In the above example, ~2,050 S19j pros would be an 8-figure CapEx investment, so it’s very important to determine how the value of these machines will change over time in order to get a complete idea of future potential returns.
The value of the machine will be roughly the same as the price you purchase it at, but over time that value will change depending on the price of Bitcoin, mining difficulty, and the longevity of the machines you purchase.
In the very long run, the machine will trend to both $0 and 0 BTC. But in the short to medium term, the value of the machine could trend up in both USD and BTC terms.
The above example is the estimated historical value of an S19 as calculated by the Hashrate Index.
Astonishingly, the dollar value of an S19 has increased significantly since the beginning of 2020. Even the BTC denominated value of the rig just reached a high not seen since August 2020.
Not only will new generation machines be spitting off positive cash flow, but it’s possible they could increase in value too if the price of Bitcoin is going up.
Bitcoin Mining in Practice
While the historic and current ROI look nice, it is difficult to procure ASICs, build large mining facilities, and source cheap scalable electricity all on your own. As an institution, hedge fund, or high net worth individual, it makes sense to purchase and host ASICs with a trusted partner like Blockware Solutions.
With Bitcoin mining experience dating back to 2013, Blockware Solutions has sold over 250,000 ASICs, hosted 200+ MW of clients, and mined over 1,500 BTC from the Blockware Mining Pool.
If you are looking for a trusted partner to assist you in deploying capital to the Bitcoin mining space, Request a Quote from Blockware Solutions.
Blockware Intelligence: https://www.blockwareintelligence.com/
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.