DCC Mining

By my calcs from last quarter it took an average of $95 power/hosting costs per bitcoin mined for DCC. This does not take into consideration equipment costs and corporate overheads of course but shows that we are pretty competitive in the mining space. Average i think is around $150-$195 for retail miners.

The advantages we have is low electricity costs in Iceland (about US$0.05 per kW, compared to $0.10-0.15 elsewhere) and also the affiliation with BitFury who make some of the most energy efficient mining equipment. There next generation equipment released this year will be 0.2 joules per hash which is unbelievably low.

The interesting thing is what will miners do from here. High cost and ones with debt or no access to further capital will leave as will be losing money at current price and cant invest in new equipment. This in turn may reduce the difficulty ratings for miners to gain bitcoins. This will allow companies that invest in new mining equipment to get more life out of equipment as will be cost effective for longer and also pick up more bitcoins as less competition. A double win for the brave.

The risk of course is further declines in the BTC price. Or if too many miners think like that they couls be left with a combination of higher difficulty ratings, lower prices and more competition. This is unliklely i reckon given recent debt and cost issues with some less well run miners. I wonder if Brindise has instigated any sort of hedging in place? Next quarter results will be interesting.