Kwh Per Bitcoin Costs Leaving Miners Unprofitable

kwh per bitcoin

Bitcoin and cryptocurrency proof of work (PoW) mining is a controversial topic. Mining is a process where computational power continuously solves a difficult mathematical calculation in exchange for cryptocurrency as a reward. Owing to the inherent competition among the miners, PoW consumes a huge amount of electricity to mine the blocks. Although this secures and processes transactions on the Bitcoin network, the combined energy consumed by BTC and ETH puts it at rank 44 on the list of countries with highest energy consumption per year. Moreover, kWh per Bitcoin costs are beginning to change the industry.

Mitchell Moos from Cryptoslate estimates that the Antminer S9i consumes about 51,000 kWh which is the equivalent to a single day consumption for  1700 residential homes. Using this as the basis to mine one BTC (kWh per Bitcoin), let us look into how the profitability of the miners changes with a decline in BTC market value.

Mining in the USA

Energy needed to mine one BTC : 51,000 kWh
Energy to mine 0.0006 BTC: 30.6 kWh
Price for kWh in USA : $0.12 [source]
Let us assume that one miner mines only 0.0006 BTC each day. The profitability calculations show that mining in USA is not profitable since the mid of November 2018 owing to the steep decline in BTC value. Considering the depreciation value of BTC miners, the loss is much higher.

Mining in China

Although it’s not profitable to mine BTC in the USA and other countries, there are other big players who continue making money mining BTC. In locations like China, Eastern Washington, Canada, and Iceland, registered businesses can procure electricity at $0.03 per KwH or lower.

Energy needed to mine one BTC : 51,000 kWh
Energy to mine 0.0006 BTC: 30.6 kWh
Price for kWh in USA : $0.03 [source]
Let us assume that one miner mines only 0.0006 BTC each day. The profitability calculations show that mining in China is still profitable, although the profitability is decreasing with decrease in BTC value.

Kwh per Bitcoin = Sad State of Financials

Many miners stopped mining BTC in the USA. Businesses like  Giga Watt, a Washington-based mining service that rents and sells mining power and equipment filed for bankruptcy on Nov. 19, 2018. Given this, the reliance of BTC on PoW is still a bane for the cryptocurrency work.

With ETH making strides to adopt Proof of Stake (PoS) consensus algorithm which reduces its energy consumption by 99%, more cryptocurrencies might abandon PoW for more environmental friendly alternatives.

XTRABYTES As An Alternative

In contrast, XTRABYTES does not require traditional miners. Being a revolutionary new technology, its fully green and thus very light on energy costs. Instead of miners, XTRABYTES relies on STATIC nodes to verify transactions.

STATIC is an acronym for Services Transactions and Trusted in Control. STATIC nodes facilitate the Proof of Signature (POSign) algorithm, a consensus algorithm which doesn’t require mining like Proof of Work. By ensuring a signature rate of 100% for every transaction block,  PoSign guarantees security and accuracy at all times.

Since STATIC nodes don’t require computing power to validate transactions (they don’t need to solve the progressively more difficult computational problems found in Proof of Work mining), the entire network will require far less energy to operate. This will dramatically shrink the carbon footprint XTRABYTES compared to most mined currencies.

There is a total maximum of 3584 STATIC nodes possible on the system at this point, and these are broken down into different levels of nodes. Each level will have a different required number of held XBY (or combination of XBY and XFUEL) to operate.

  • 512 Level 1 STATICS
  • 1024 Level 2 STATICS
  • 2048 Level 3 STATICS

STATIC node owners can ‘break’ their STATICs at any time, thus allowing investors to sell their XBY & XFUEL investment in full. Of course, any STATIC node that is broken automatically stops receiving rewards for being online (such as earning additional coins and governance control within the system).

Most STATIC owners will want to keep their systems up and running for extended periods, as doing so enables them to accrue transaction fees. These STATIC nodes also requisition XBY and XFUEL tokens, thus reducing the circulating supply and driving investor prices up. As natural demand grows, more and more people will want to operate STATIC nodes.

So… explore what XTRABYTES has to offer!

Would you like to know more?

We don’t just publish articles, XTRABYTES™ is a whole new blockchain platform that allows DApps to be programmed in any language, utilizing a new consensus algorithm called Proof of Signature. In doing so, XTRABYTES™ presents a next – generation blockchain solution capable of providing a diverse set of capabilities to the general public.

You can learn more on our website where you can also help to spread the word through our bounty program and get rewarded in XFUEL™, or join our community and hop into the discussion right now!

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