Bitcoin Mining Costs: Hosted Rates Outshine Household Electricity

The cost of mining one Bitcoin has been calculated using a simple formula that takes into account the current price of Bitcoin, electricity rate, and machine efficiency. At a household electricity rate, mining a whole Bitcoin costs more than the coin's worth, but at an industrial or hosted rate, it is significantly cheaper.

According to the calculations, at a hosted rate of 4.80 cents per kilowatt hour on a modern hydro machine, the cost of mining one whole Bitcoin is approximately $22,902 in electricity alone. In contrast, at an average United States household tariff of 17 cents, the same machine would burn about $81,113 of electricity to produce the same one Bitcoin.

The formula used for these calculations is hashprice divided by (24 x J/TH), where hashprice is the current price per petahash per day and J/TH is the machine's efficiency in joules per terahash. This formula reveals that a 9.50 J/TH machine breaks even at $0.1778 per kilowatt hour, while a 17.50 J/TH machine breaks even at $0.0965.

It is worth noting that the difficulty change in the network also affects the cost of mining one Bitcoin, with each retarget moving the answer. The current retarget is pointing down, making mining slightly cheaper, but the long-run direction is up.