How much is spent on bitcoin mining?

[sipredrica]

Would be interesting to know how much has been spent on bitcoin mining. This is an amount that could potentially go towards the Epistemic Standard Economy.

There's articles about investments from VC in the bitcoin space, but there isn't much about the numbers being spent on mining. Probably not easy to get a concrete number with the network hashrate changing, factoring in that a top miner would have a high price the previous year for less Gh/s compared to the next, and several other things to consider.

If we were to go by this article http://www.datacenterknowledge.com/arch ... half-2014/ (from last July) it costs $1.5 – $2 million to deploy 1 petahash.

At the current network speed of ~300 Ph/s that figure would be around $450 million. (300 x 1.5)

[amaclin]

Yes.
Bitcoin network eats ~$1mln daily for processing ~100k transactions
So one transaction costs ~$10

Who pays this cost? Hodlers by devaluating their stakes.

[ClamCoin]

Yes.
Bitcoin network eats ~$1mln daily for processing ~100k transactions
So one transaction costs ~$10

Who pays this cost? Hodlers by devaluating their stakes.

10$ cost per transaction, do u mean the fee or how much the avergae is per transaction?

[amaclin]

10$ cost per transaction, do u mean the fee or how much the avergae is per transaction?

prime cost, net cost, first cost

[Amph]

basically with your estimate, they have spent round 1/10 of the market cap of bitcoin, if we take this in consideration, we can presume that if bitcoin rise it will always remain around 10%

unless the efficienty will rise faster than the price

[amaclin]

they have spent round 1/10 of the market cap of bitcoin

They have spent much more.
$1mln/day is the cost of electricity.
Do not forget the cost of hardware.

[bitjamz]

they have spent round 1/10 of the market cap of bitcoin

They have spent much more.
$1mln/day is the cost of electricity.
Do not forget the cost of hardware.

this days its even no worth to mine bitcoins

[amaclin]

this days its even no worth to mine bitcoins

We were talking about hodling, not mining 

[Amph]

they have spent round 1/10 of the market cap of bitcoin

They have spent much more.
$1mln/day is the cost of electricity.
Do not forget the cost of hardware.

yeah i was talking about the mining investments not electricity, also because electricity isn't possible to calculate, because many countries have different rate

[S4VV4S]

Yes.
Bitcoin network eats ~$1mln daily for processing ~100k transactions
So one transaction costs ~$10

Who pays this cost? Hodlers by devaluating their stakes.

Can I ask how you came to that number?
Because it is impossible to know that for sure.

[tiggytomb]

Would be interesting to know how much has been spent on bitcoin mining. This is an amount that could potentially go towards the Epistemic Standard Economy.

There's articles about investments from VC in the bitcoin space, but there isn't much about the numbers being spent on mining. Probably not easy to get a concrete number with the network hashrate changing, factoring in that a top miner would have a high price the previous year for less Gh/s compared to the next, and several other things to consider.

If we were to go by this article http://www.datacenterknowledge.com/arch ... half-2014/ (from last July) it costs $1.5 – $2 million to deploy 1 petahash.

At the current network speed of ~300 Ph/s that figure would be around $450 million. (300 x 1.5)

It is probably quite a scary amount, I remember when I got into Bitcoin I tried mining both Bitcoin and Litecoin using my cpu, it's fair to say I mined nothing at all and quickly learned how it all worked

[amaclin]

Can I ask how you came to that number?
Because it is impossible to know that for sure.

Current hashrate is ~350,000,000 GH/s
https://bitcoinwisdom.com/bitcoin/difficulty

Let us assume that miners takes 600w for 1TH/s (some miners are better, some are worse)
So, the network runs as 350000 miners
Total daily electricity is 0.6 * 24 * 350000 = 5040000 kWh
1kWh costs $0.10
So, daily network expenses only for mining are $504k

OK, $504k is not equal to $1m but close enough

[S4VV4S]

Can I ask how you came to that number?
Because it is impossible to know that for sure.

Current hashrate is ~350,000,000 GH/s
https://bitcoinwisdom.com/bitcoin/difficulty

Let us assume that miners takes 600w for 1TH/s (some miners are better, some are worse)
So, the network runs as 350000 miners
Total daily electricity is 0.6 * 24 * 350000 = 5040000 kWh
1kWh costs $0.10
So, daily network expenses only for mining are $504k

OK, $504k is not equal to $1m but close enough

LOL!
No, it's not close enough.
It's half of a million.

That means that, according to your calculations, each transaction costs $5.04. ($504k / 100k)
Which is still a lot....

[philipma1957]

Can I ask how you came to that number?
Because it is impossible to know that for sure.

Current hashrate is ~350,000,000 GH/s
https://bitcoinwisdom.com/bitcoin/difficulty

Let us assume that miners takes 600w for 1TH/s (some miners are better, some are worse)
So, the network runs as 350000 miners
Total daily electricity is 0.6 * 24 * 350000 = 5040000 kWh
1kWh costs $0.10
So, daily network expenses only for mining are $504k

OK, $504k is not equal to $1m but close enough

LOL!
No, it's not close enough.
It's half of a million.

That means that, according to your calculations, each transaction costs $5.04. ($504k / 100k)
Which is still a lot....

Even if you go wider with the estimate.   It is not lower then $3  and most likely it is not higher then $8.

All 3 estimates $3, $5 or 8 per transaction are pretty high.

But op does not want to include the 25 coin subsidy.   which is  done about 144 times a day. so 25 x 144 x 257 = USD 925,200


I get the point that BTC will not work without the subsidy with current amounts of transactions.  We would need a lot more of them for this to work once subsidy lowers.

[jonnybravo0311]

There are some pretty far fetched numbers being thrown around in this thread.  Thankfully we're in the speculation section

If we assume your 100k transactions per day are contained in 144 blocks mined, and also assume that the price per BTC is $250, and that the average power cost is $0.10 per kWh, and that the network is 350 PH/s and finally that power usage is 0.6kW per TH/s (which I believe is pretty optimistic, I'd push it more towards 0.75kW per TH/s)...

350,000 * 0.6 * 24 = $504,000 overall total cost to bang out those transactions, so a total cost of $5.04 per transaction.

However, you need to also include the rewards provided by the 25BTC generated per block as Phil pointed out.

25*144*250 = 900000.  Divide that by the same 100k transactions and you get $9 earned per transaction.

So, in this speculation, each transaction nets $3.96 earnings.

[amaclin]

However, you need to also include the rewards provided by the 25BTC generated per block as Phil pointed out.

No. The net cost of transaction does not depend of block rewards/fees/etc
The net cost is "cost of resources in external currency" divided by "count of items"

[jonnybravo0311]

However, you need to also include the rewards provided by the 25BTC generated per block as Phil pointed out.

No. The net cost of transaction does not depend of block rewards/fees/etc
The net cost is "cost of resources in external currency" divided by "count of items"

Is "net cost" some accounting term that is specifically defined the way you did?  I'm not an accountant, so I just don't know the terminology .

Using your definition, I will agree that the "net cost" is $5.04.

How or where would you include the rewards/fees/etc in this scenario (obviously not part of net cost)?

[amaclin]

How or where would you include the rewards/fees/etc in this scenario (obviously not part of net cost)?

Bitcoin network does not produce bitcoins.
Bitcoin network like any transaction system produces transactions.

[jonnybravo0311]

How or where would you include the rewards/fees/etc in this scenario (obviously not part of net cost)?

Bitcoin network does not produce bitcoins.
Bitcoin network like any transaction system produces transactions.

Every time a block is added to the chain there is a coinbase transaction that currently awards 25BTC plus fees.  It is a transaction that is produced by the network.

[philipma1957]

However, you need to also include the rewards provided by the 25BTC generated per block as Phil pointed out.

No. The net cost of transaction does not depend of block rewards/fees/etc
The net cost is "cost of resources in external currency" divided by "count of items"

Show me that in an accountiing test with bitcoins as a specific example.

you can do it with other items.  but the facts are with bitcoin it does not apply.

here is the example you need to think of   the net cost of drilling a well is 1000 dollars whether or not I hit oil.  so you pull the if out.

the network will hit blocks it is a certainly so the block rewards count.