I've done some math, and come up with a formula to determine the absolute minimum sustainable (break even) network efficiency (in terms of Hashes per joule).
This basically gives the minimum efficiency that would be required to run the network if it was a single person mining and they got all the coins. So for mining to be profitable you'll need to be a tad higher than the given efficiency(to account for pool fees and luck), but it does shed light on the future of mining.
For price = .15$, difficulty as 10076292.88, reward at 3600 coins per day, and exchange rate at 110.
655714 Hashes per joule.
Which is a little less than half of what blockchain.info estimates the efficiency to be at (1.5MH/J).
Now if we fast forward to the end of the year, I personally believe we will see 50M difficulty (350TH/s+), I also believe we will see a stable 200$ per coin, so at .15$ per kwh results in about 1.79MH/J, which cuts out some GPU miners already.
.10$ per kwh: 1.19MH/J
.05$ per kwh: 596KH/J
Obviously, cheaper electricity lowers the efficiency needed.
But what this formula really lets us know is the long term viability of the network itself. Right now, to currently survive off transaction fees alone (144*(500*.0005)) my estimate is that on average you get 500 paying transactions per block, and at the default fee, it amounts to 36 btc per day. At the current rates...
65.5MH/J are required to break even.
This makes it apparent that cheap electricity will be required to
Just some food for thought.
Now does anybody have any thoughts on this?
EDIT: I really hope my math is right, or I'll sound really stupid.
