For better insight into long-term bitcoin price, and its relation to block reward halving events, we consider the cost of production of Bitcoin mining.
When calculating the cost of mining production, several variables come into play, namely, capital costs such as ASIC equipment expenditure and infrastructure, as well as, operational costs such as electricity, cooling, etc. Geographical location influences costs because different locations have differing rates for power, have different climates and variable internet connectivity.
The above costs are calculated alongside the mining operation’s hashrate and the protocol’s current mining difficulty in order to arrive at the miner’s effective cost to produce one bitcoin. Different methods for calculating production costs yield different average amounts, but for our purposes we’ll refer to Adam S. Hayes’s 2015 paper “A Cost of Production Model for Bitcoin“.
read more detail :
https://www.cryptocoinsnews.com/bitcoin-price-cost-mining-production/
