Hello everyone!

Ok ok, we'll do the energy analysis again.

Lets start with the Antminer-S9 with a claim on their website of 0.1 J / GHps. Well they mean to say 0.1 J/s / GH/s which is the same as a .1W / GHps.

What does this get you for your tenth of a joule? Well let's see. BTC diff is at about 30 EHps, and that is worth a coinbase of:

total coinbase reward R = 12.5 / 10 / 60 = .021 BTC/sec (we'll leave fees out for now).

Your piece of this pie for .1 J/s is 1GHps worth:

r = .021 * 1GHps / 30EHps = 7 * 10^-12 BTC / sec

thus 1 J = 7E-11 BTC = 7E-3 sat = 0.007 satoshi per joule

**Eneregy cost C = 7 msat/J (2018)**

OK lets check our work from a couple years ago here.

We came up with

E-cost = 13 msat/J (2015)

The cost of Energy has gone down by a factor of two or so. Another way to look at it is that we are getting less BTC per joule with our miners than we were a couple years ago.

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Now let's calculate the cost of a Joule another way.

We'll start with gasoline at 7.5 RMB / L, a popular price to pay in early 2018 I am told. Arthur Nommensen tells us there are 34 MJ in a liter of automotive gas, which would work out to 150 MJ per gallon which is 25% higher than the figure we used in 2015. We'll use the old figure anyway for comparison, which is 120MJ/gal or 26 MJ/l. Keep in mind you might be able to get as much as 25% more joules for your satoshi.

This works out to 26 MJ / 7.5 RMB = 3.5 MJ / RMB [人民币]

Now all that's left is for us to convert from RMB to BTC. We can find a figure for this from our wechat trading groups or from bitkan.com/price :

58000 RMB / BTC or 0.00058 RMB / sat

This means that our energy cost was

C = 3.5 MJ / RMB * 0.00058 RMB / sat = .002 MJ / sat

C = 2 kJ / sat

C = 2000 J / sat lets invert this to sat / J

C = 5 E-4 sat / J

**C = 0.5 msat / J (2018)**

Wow, that's only half a millisat per joule! You can recall from 2015 that this came out to:

C= 5 millisat / J (2015)

That's a factor of 10 more Joules for your sat.

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Conclusions?

Well energy is worth about 0.5 msat per joule or 7 msat per joule depending on how you make the trade. The arbitrage opportunities and volatility here have gone up it appears. The price of these things is still mostly driven by how many fiat currency units issuers are willing to throw at these assets, so don't bank on these things normalizing any time soon.

Lets look at the arbitrage here just for fun. Suppose you start with 1 J of energy and use a mine to get 7 msat with it. You're rich! Now you can turn around and buy 14 Joules of energy with it! Rinse and repeat.

Wouldn't it be kinda funny if oil refineries were like, f this, we're not going to bother selling to motorists when we can just power our mine?!

Of course this won't work that well because we've left out the inefficiencies required in converting gasoline Joules to mining rig Joules. Just for fun we can do one more version of the calculation:

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Start with 10 USD cents per kWh, a common low end figure for regulated AC power in much of the world.

0.1 USD/kWh * 1 hr/60 min * 1 min / 60 sec = 2.8 E-5 USD/kWs

= 2.8 E-5 USD/kJ

Use today's exchange rate 9000 USD / BTC to convert ->

= 2.8 E-5 USD/kJ / 9000 USD/BTC = 3.1 E-9 BTC / kJ

= 0.31 sat / kJ

**C = 0.31 msat / J**

[Edit - an earlier version of this section contained an error of a factor of 60]

Conclusions:

The prices of energy in gasoline and mains power form are remarkably similar. At current prices and difficulties, minus overhead (including here in overhead the cost of the mining hardware, do your own calculations here please), it looks like paying normal prices for electricity and mining with an antminer will get you a profit. Notice "at current prices and difficulties", for we also can expect these to change. Difficulty will go up and/or energy prices (in BTC) will go up.

Lets recap our May 2018 energy calculations:

**Earnings per joule with the s9: 7 msat / J**

**Cost per joule to buy gasoline: 0.5 msat / J**

**Cost per joule to buy regulated AC power: 0.3 msat / J**

Mining still a growth industry.

Have a nice weekend 🙂