How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (2024)

Swan logo

Log In

Get Started

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (1)How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (2)

Education

Mining aBitcoin depends onyour energy rate per Kwh, itcosts $11,000K tomine aBitcoin at10 cents per Kwh and $5,170K tomine aBitcoin at4.7 cents perKwh. Learn how and ifmining right for you inJuly 2024!

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (3)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (4)How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (5)

Mickey Koss

Jun 1, 2024June 1, 20247 min read7 minutes read

In this article

  • #1 What is Bitcoin, and why does it need to be mined?
  • #2 How long does it take?
  • #3 What is a mining pool?
  • #4 How much does it cost?
  • #5 How does hash rate affect my miner?
  • #6 Should I mine or buy Bitcoin?
  • Swan Bitcoin HashRateUp Series

AsBitcoin’s price goes up, sodothe miners' prices. Depending onwhat your energy costs are per kilowatt hour aswell asmarket conditions, itmay bemore beneficial tomine; other times, itmay bebetter tosimply purchase Bitcoin outright.

Inthis article webreak down the essential costs and considerations involved inmining Bitcoin.

Bitcoin mining isthe process bywhich computers secure the network, process transactions, and unlock the newly issuedBitcoin. Specialized computers expend energy inarace tosolve acryptographic puzzle.

Whoever wins the race wins the ability toadd the next block ofdata into Bitcoin’s chain oftransactionhistory. That miner also earns the newly issued Bitcoin and the transaction fees for that particular block.

When deciding whether tomine ornot, afew factors must beconsidered. Mining allows you toessentially purchase Bitcoin atthe cost ofenergy rather than market prices.

Itcan beextremely lucrative toenter the market before large, upward pricemovements. However, ifenergy costs are too high, itmay not beprofitable tomine rather than buyBitcoin.

For Example: At4.7 cents per kWh: $5,170

Contrary topopular belief, Bitcoin mining gives value towasted energy inmany unobvious ways.

Another factor ishash rate growth. Asmore miners join the network toprovide computing power, your existing computing power isdilutedgradually. Generally speaking, mining rigs will produce Bitcoin atadecreasing rate, becoming less profitable over time.

#1 What isBitcoin, and why does itneed tobemined?

Bitcoin isanetwork, asset, and protocol that allows for the transfer ofvalue across the internet inapeer-to-peer way without the need for anintermediary. Imagine sending your friends cash through anemail.

This isdone inaverifiable way that cannot becounterfeited ordouble-spent, soyou always know the Bitcoin you hold isreal and legitimate.

Bitcoin mining started asaway for fairissuance. All people needed todowas run free, open-source software ontheir computers toearn Bitcoin asareward. Miners also process transactions.

Swan’s Yan Pritzker breaks down Bitcoin mining asalotterysystem inthis great Twitter thread:

Miners earn the newly minted Bitcoin and transaction fees byusing electricity tosolve acryptographic puzzle called 'proof ofwork.'

Asnetwork power grew, specialized computers were developed tomake mining moreefficient. They now serve asadigital security fence that keeps the network honest and secure.

Inexchange, miners receive newly issued Bitcoin and transactionfees. This iscalled the blockreward. The block reward iscurrently 6.25 Bitcoin was cut inhalf onApril 20th, 2024 to3.125Bitcoin.

This isknown asthe 'Bitcoin Halving' and isone ofthe mechanisms widely believed toprecipitate Bitcoin bull markets and large price predictions from institutional investors.

The block reward halving happens roughly every 4 years or210,000blocks. Itisthe mechanism bywhich Bitcoin’s 21,000,000 (or2.1 quadtrillion satoshis) hard cap isreached and iswidely believed toprecipitate bull markets.

#2 How long does ittake?

New Bitcoin iscreated, onaverage, every 10 minutes asablock iscreated. Ascomputers worldwide race tosolve acryptographic puzzle, they are simultaneously arranging transactions into ablock ofdata.

This block isadded tothe history ofall Bitcoin transactions. Asareward, the miner who solves the problem first receives the 6.25 Bitcoin and transaction fees associated with that block.

Theoretically, aminer could goforever without ever winning therace. Toreduce this risk, miners will pool their computing power together tosolve the problem collectively.

#3 What isaminingpool?

Mining pools are groups ofminers that work together tosolve the cryptographicpuzzle. The more computing power they have, the higher the probability they will solve the next block.

Indoing so, they earn the reward and fees, splitting the payout proportionally based onhow much computing power each entity provides for the pool.

Inthis setup, miners opt out ofthe chance ofwinning the entire reward for themselves but, inexchange, receive more predictable income from their proof ofwork computations.

#4 How much does itcost?

Itdepends onyour power cost and what type ofmachine youuse. Ifyou plug inthe latest mining computers into your home, itwill bequite expensive tomine.

Tocalculate the cost ofmining one Bitcoin, weneed toconsider several factors, including the efficiency ofthe mining hardware (measured inwatts per terahash), the hash rate ofthe mining operation (terahashes per second), and the total energy consumed over the period ittakes tomine one Bitcoin.

However, one ofthe most straightforward methods istouse the average energy consumption required tomine one Bitcoin and then calculate the cost based onthe electricityrate. This iswhat the formula looks like:

At10 cents per kWh:

Cost = 110,000 kWh × 0.10 $perkWh

At4.7 cents per kWh:

Cost = 110,000 kWh × 0.047 $perkWh

Tomine one Bitcoin, the cost at10 cents per kWh isapproximately $11,000, and at4.7 cents per kWh, it’s around $5,170.

#5 How does hash rate affect myminer?

Asmore computing power, orhash rate, joins the Bitcoin network, the mining algorithm difficulty will automatically rise tomaintain the 10-minute target average block time.

Asthe difficulty rises, the marginal contribution ofevery computer onthe network goes down, making them less profitable.Mining hash rate and difficulty have risen consistently, meaning miners slowly become less profitable overtime. There are still trade-offs, however.

Newer, more efficient machines will cost substantially more than oldermachines. Depending onthe circ*mstances, older machines may actually have abetter return oninvestment and ashorter payback period.

#6 Should Imine orbuyBitcoin?

Mining Bitcoin allows you toaccumulate Bitcoin atthe cost ofenergy rather than the cost ofBitcoin and supports network security.

Many call itthe native way tohave recurring buys.However, there are two primary risks toconsider:

  1. IfBitcoin’s price drops too low, your miner may not produce enough Bitcoin tooffset electricity costs.

  2. The hash rate could also grow faster than expected, diluting your miner’s individual hash power and reducing return oninvestment.

Some may choose tomine athome, however, ifthey want toaccumulate KYC-free Bitcoin, even ifthe cost ofelectricity exceeds the value ofBitcoin produced.

Swan Bitcoin HashRateUp Series

Everyone’s situation isdifferent, but these are afew factors you should consider before diving in.Navigating the costs ofBitcoin mining can bequite the expedition. But don’t let the complexities ofmining overshadow the simpler pathways toBitcoinownership.

HashrateUp isapodcast that delves into Bitcoin mining and exciting projects, utilizing hashrate production tounlock new potentials inthe broader energyindustry.

Newest Episode: June 23rd, 2024— Balancing Grids with Bitcoin inKenya— Adam Swick Building the Future ofBitcoin Mining with Brad James

Inthis episode ofHashrateUp, Jesse sits down with Adam Swick, the Chief Growth Officer atMarathon Digital Holdings, todiscuss their exciting new venture intoKenya. They delved into the strategic shift inBitcoin mining from being mere customers ofpower tobecoming partners insolving energyproblems. Adam highlights how Marathon isleveraging this approach toaddress issues like grid balancing and utilizing stranded orexcess energy, which isparticularly relevant inregions likeAfrica.

AtPacific Bitcoin 2023, Kaz Bycko hosted apanel with Zack Bomsta and Michael Schmid all about the world ofhome mining, how itcan befun, profitable and how it’s actually important for the radical decentralization ofBitcoin.

Check out there panel discussion below!

Ifmining seems too daunting orcostly, there’s astraightforward alternative for you.

Don’t worry; onJanuary 25th, Swan announced Swan Mining, adivision ofSwan Institutional.

Swan iscurrently mining over 7 EH/s. Equal toabout 1% ofthe entire Bitcoinnetwork. Start your Bitcoinjourney. Whether you’re new toBitcoin oraseasoned enthusiast looking toexpand your portfolio with aBitcoinIRA.

For more information, please visitswan.com.

Swan IRA— Real Bitcoin, NoTaxes*

Hold your IRA with the most trusted name inBitcoin.

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (9)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (10)How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (11)

Mickey Koss

Mickey Koss became afreelance writer inthe Bitcoin space inanattempt tobuild aproof ofwork portfolio for when heleft the Army. Hegraduated from West Point with adegree inEconomics before serving inthe Army for nearly adecade. Hebecame orange pilled ingraduate school and isnow aregular contributor toForbes, Bitcoin Magazine, and Bitcoin News. He’s been onpopular podcasts such asBTC Sessions’ Why Are WeBullish, and isaregular onCafé Bitcoin.

In this article

  • #1 What is Bitcoin, and why does it need to be mined?
  • #2 How long does it take?
  • #3 What is a mining pool?
  • #4 How much does it cost?
  • #5 How does hash rate affect my miner?
  • #6 Should I mine or buy Bitcoin?
  • Swan Bitcoin HashRateUp Series

Share

News

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (12)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (13)How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (14)

July 18, 2024

Germany’s Bitcoin “Brown Bottom”

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (15)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (16)How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (17)

July 17, 2024

Bitcoin ETFs Inflows Showing Robust Turnaround inJuly

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (18)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (19)How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (20)

July 16, 2024

Trump, Bitcoin, and the Swamp

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (21)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (22)How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (23)

July 16, 2024

Craig Wright Referred for Perjury Prosecution, Receives Injunctions inCOPA Case

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (24)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (25)How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (26)

July 16, 2024

Bitcoin onthe Ballot

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (27)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (28)How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (29)

July 12, 2024

CFTC Coming For Bitcoin?

More News

More from Swan Signal Blog

Thoughts onBitcoin from the Swan team and friends.

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (30)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (31)How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (32)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (33)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (34)How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (35)

IfThey Can Print Money, Why DoWePayTaxes?

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (36)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (37)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (38)

By Stephan Livera

Bitcoin isareal solution tothe issues surrounding the question of“Ifthey can print money, why dowepay taxes?”

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (39)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (40)How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (41)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (42)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (43)How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (44)

Why Bitcoin Needs ToChange

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (45)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (46)How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (47)

By Chris Guida

When wesave our life’s work inbitcoin, wewant tobecertain that the wealth generated bysuch work will still bearound decades oreven centuries fromnow.

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (48)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (49)How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (50)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (51)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (52)How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (53)

Bitcoin Wealth Distribution

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (54)

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (55)How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (56)

By Matthew Kratter

Bitcoin curbs government overreach through money printing and devaluation. Itpromotes saving and long-term investment over fiat’s consumerism, empowering global citizens and potentially sparking acultural renaissance.

How Much Does it Cost to Mine a Bitcoin? $20K with 4.7c/Kwh (2024)
Top Articles
Latest Posts
Article information

Author: Kareem Mueller DO

Last Updated:

Views: 5416

Rating: 4.6 / 5 (66 voted)

Reviews: 89% of readers found this page helpful

Author information

Name: Kareem Mueller DO

Birthday: 1997-01-04

Address: Apt. 156 12935 Runolfsdottir Mission, Greenfort, MN 74384-6749

Phone: +16704982844747

Job: Corporate Administration Planner

Hobby: Mountain biking, Jewelry making, Stone skipping, Lacemaking, Knife making, Scrapbooking, Letterboxing

Introduction: My name is Kareem Mueller DO, I am a vivacious, super, thoughtful, excited, handsome, beautiful, combative person who loves writing and wants to share my knowledge and understanding with you.