If you mine Bitcoin as a hobby you are elated each time your labor returns the occasional fruit, delivered in the form of a 50 BTC reward.It is a wonderful feeling – money for nothin’.
Take the cost of electricity into account, however, and that reward might make mining seem a little less appealing. The power consumed to create that reward will vary based on your system configuration, however much of the power for typical gaming PCs under load from the Bitcoin miner is consumed by the GPU.
Tom’s Hardware - Power Consumption Profiles
$500 Stock PC
$1,000 Stock PC
$2,000 Stock PC
Moving from mining as a hobby into mining as an entrepreneurial endeavor means that your success will be more likely if you have a comparable advantage over others with the same idea. Electric power rates vary greatly from one country to the next and from one state or region to the next even. If you live where electricity is cheap you may have an advantage over others.
The Electricity pricing Wikipedia article shows the price per kWh in over two dozen countries. The top three of those where electricity is the cheapest are Spain, Canada and Finland, each of which show electricity under $0.07 US per kWh. Germany, the Netherlands, Italy and Denmark are at the end of that list with electric rates over $0.30 US per kWh.
These rates may vary based on whether the electricity is metered for residential or non-residential uses.
Though the U.S. average is now a little over $0.10 US per kWh, according to a U.S. Department of Energy monthly report, the residential average is $0.12 US. On the high end, excluding areas outside the contiguous U.S., are the Northeast states of New York, Connecticut and New Jersey with rates approaching $0.20 US.
On the low end are the Pacific Northwest states Washington and Idaho which are under $0.09 US. As a rule of thumb, commercial rates can be calculated as being about 90% that of residental, though the report provides specific rates for each state.
Perhaps that’s why Bitcoin’s largest miner, who lives in a high-cost location, powers up using a diesel generator.
Written on 18 Dec 2010.