How to Calculate the Production Price of Bitcoin?

[CoinDox]

I have looked around the forums to find which metrics to best use to determine the average price at which most large-scale mining operations will cease being profitable. The closest thread on the topic so far has been written by BurtW https://bitcointalk.org/index.php?topic=518111.0. Unfortunately, it does leave some things to be desired as the thread makes some assumptions which some readers find to be unrealistic (i.e. the Hashing growth rate is going to increase this year by the same proportions as last). I will let you read as to why this is, but I digress.

So, aside from trying to calculate the overhead costs of the individual mining operations, what do you guys think would be another way to estimate this figure?

The reason I am interested is because I very much agree with Burt's notion that; "the difficulty continues to climb at about the same rate and the price continues to go down.  This will not last.  One of these things MUST give.  Either the price needs to go up or the difficulty must stop going up."

I think that amongst all of the market uncertainty at this point, finding the bottom line for the major mining pools would go a long way to establishing a realistic bottom to the declines we have been seeing. What do guys think?

[cloverme]

You could try to estimate what they paid for the mining equipment in terms of $ per Ghs. From there, you could estimate on how long it will take for them to pay off the equipment if you knew their total hashing power.  You could also guestimate what they pay for power to gauge operating expenses. They have to sell a % of mined coins at the market rate to pay fixed operating costs, pay down debt, and then estimate a profit by date.

[ssbn506]

You can do it with this miner as he posted his monthly operating costs.
https://bitcointalk.org/index.php?topic=507568.0

 as 8000 per month. When btc are 415 I calculated  he would be bringing is about 9700 this month but I could be way off. The alt coins mining is harder to get a number. So for this miner and I don't know how typical he is lets assume he paid off all this hardware costs when btc was higher and difficulty was lower is getting very close the not making money any more with existing equipment.

[samsonn25]

You cant assume he paid off the hardware because if it cost him $150k to 180k investment  im sure he is still losing money, and probably will be a NET negative  losing investment with difficulty going up.

With GPU's you can do a decent rig with 3 good video cards for about $1600 that pulls 2500kh (800-900 watts)  4 card rig $2100kh (1050-1200 watts), you do the math on return per kh/$ for the Scrypt.

For BTC the difficulty is much more exponential rise!