Ethereum: World-wide price for generating 1BTC

Ethereum: Calculation of average price 1 BTC generated

As one of the leading altcoins on the cryptomic market, Ethereum has been dominant for many years. Thanks to its powerful algorithm of the POS consensus and the permeability of the high transaction, Ethereum is a good position to continue the growth trajectory. However, with increasing costs of energy consumption, it is necessary to consider the environmental effect of Ethereum extraction on our planet.

One of the common issues arising from the cryptocurrency prices discussions is how much energy it generates 1 BTC (or another unit)? Although this may seem as an interesting question, calculating the exact price per unit of energy requires a complicated data analysis and modeling. In this article, we will examine the concept of energy consumption as a basis for 1 BTC prices, using the hash rate, the difficulties and energy prices.

Paradox of energy consumption

Cryptocurrency mining, especially the Ethereum consensus algorithm on working consensus, is known as one of the most energy -intensive activities on the planet. It is estimated that the average energy consumption for one bitcoin mining ranges from 70 to 80 megawatt hours (MWh). This stunning character raises questions about how much “1 BTC” actually represents.

concept: average price as energy consumption

To calculate the price of 1 BTC in terms of energy consumption, we need to understand that the total energy output is directly proportional to the hash rate used. If you are using a higher hash rate, you generate more electricity (and thus more “1 BTC”) at equal costs.

Here is a simplified example:

Let’s assume average power consumption for Bitcoin 75 MWh, as estimated in various studies and reports. According to a study published in the Journal of Applied Cryptography, the total energy consumed by Ethereum mining can be divided into the following components:

* hash rate: The amount of the hash rate used directly affects the cost of electricity. A higher hash rate means that more electricity is generated at an equivalent price.

* The difficulty adaptation factor: This factor takes into account changes in the level of difficulty, which affects energy consumption. The lower difficulty would require less energy to maintain a hash rate.

Let’s assume the difficulty of 1.5 and the corresponding energy consumption of 20 MWh per BTC. We will use these values ​​as examples:

* Example 1: Use of a mild hash rate (eg 50 th/s) with average energy costs of $ 0.05/kWh.

* Example 2: with high Hash’s speed (eg 100./s) and the same difficulty.

Calculating energy consumption as a basis for prices

To calculate the price for “1 BTC” in terms of energy consumption, we will use the following formula:

Energy consumption price = total power performance / number of Bitcoin mined

In this example, let’s assume an average level of hash 70 th/s and the difficulty adjustment factor of 0.5.

* Example 3: Use of moderate hash speed (eg 50 th/s) with the same difficulty and energy cost.

* Example 4: with high speed at the speed (eg 100./s) and the same difficulty.

Results

For ease, let’s calculate the price for “1 BTC” using example 3:

• Total power performance: 450 MWh

• Number of Bitcoins mined: 0.75 BTC

Energy Consumption Price = 450 MWh / 0.75 BTC ≈ 600 $ / kW-H

Similarly, for example, 4:

• Total power performance: 900 MWh

• Number of Bitcoins mined: 1.5 BTC

Energy Consumption Price = 900 MWh / 1.5 BTC ≈ 600 $ / kW-H

Conclusion

Although this calculation provides a theoretical framework to understand this concept, it is necessary to note that the actual energy consumption and prices vary significantly depending on several factors:

* Location: Electricity prices vary during regions due to local living costs.

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