The Bitcoin Hashprice Threshold

What is the Bitcoin network's hasprice threshold?

This is a question that has been bouncing around my head as of lately.

Hashprice is the revenue that miners get paid for by submitting hashes to the network. Currently hashprice is at an all time low of around $.06 - $0.058.

This has put some miners out of business and forced many others to simply turn off their machines because they are unprofitable.

In theory hashprice will continue to trend downwards. But miners need to make a profit in the long run. While some well capitalized miners will be able to operate at a loss for a short period of time. Bitcoin mining is not subsidized and over the long run miners need to make a profit or have some sort of supplemental income or else they will be forced to exit the network.

Years ago hashprice was much higher than it is today. From 2016-2018 hashprice was above $1.00 and even peaked at over $3.00 in December 2017. 

Yes, I know what you are thinking Jesus that must have been an amazing time to be a Bitcoin miner. But the ASICs were much less efficient, meaning that hashprice had to be much higher because the S9s were so much less efficient that the ASICs of today.

The S9 has an efficiency of 98 J/TH compared to the S19 XP which has an efficiency of 21.5 J/TH. This is a 4.55x improvement in efficiency. I personally don't think that Bitmain and Whatsminer are going to be able to make another 4x improvement in efficiency in the coming years.

So with a big negative difficulty adjustment coming up that is estimated to be around 10% it certainly feels like hashprice below $0.06 is the limit for many miners on the network. 

This makes sense if we look at the average industrial electric rate in the United States at 9.34 cents per kWh for September 2022 according to the US Energy Information Association. The popular S19j Pro and S19 Pro miners are unprofitable above 8 cents per kWh. 

In order to be able to survive miners need to be setting up their operations so that they can be profitable below the threshold. As long as everyone else has to shut down their miners before you. You will survive the bear market and be well positioned to make big profits during the next bull run. 



Steven Wilson


1 comment

  • William Tewelow

    Great write-up Steven… short, informational, and pertinent. Thank you

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