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Bitcoin Mining Update: Power Usage Costs Across the United States

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Manufacturer: General

How much will these Bitcoin mining configurations cost you in power?

Earlier this week we looked at Bitcoin mining performance across a large range of GPUs but we had many requests for estimates on the cost of the power to drive them.  At the time we were much more interested in the performance of these configurations but now that we have that information and we started to look at the potential profitability of doing something like this, look at the actual real-world cost of running a mining machine 24 hours a day, 7 days a week became much more important. 

This led us to today's update where we will talk about the average cost of power, and thus the average cost of running our 16 different configurations, in 50 different locations across the United States.  We got our data from the U.S. Energy Information Administration website where they provide average retail prices on electricity divided up by state and by region.  For use today, we downloaded the latest XLS file (which has slightly more updated information than the website as of this writing) and started going to work with some simple math. 

Here is how your state matches up:

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The first graph shows the rates in alphabetical order by state, the second graph in order from the most expensive to the least.  First thing we noticed: if you live in Hawaii, I hope you REALLY love the weather.  And maybe it's time to look into that whole solar panel thing, huh?  Because Hawaii was SO FAR out beyond our other data points, we are going to be leaving it out of our calculations and instead are going to ask residents and those curious to just basically double one of our groupings.

Keep reading to get the full rundown on how power costs will affect your mining operations, and why it may not make sense to mine AT ALL with NVIDIA graphics cards! 

The second thing I noticed is that doing a graph for each of the 49 remaining stats (and the District of Columbia) would create a mess of graphs to present.  Because of that we came up with the idea to group the states into four divisions and take the averages.  You can see our break down here:

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We took the 12 most expensive states, from Connecticut to Maryland, and found the average price between them.  The next group of 12 was averaged, followed by 13 more and then 13 more.  The averages we used for our calculations were:

  • Group A: $0.15809 / kWh
  • Group B: $0.11606 / kWh
  • Group C: $0.09813 / kWh
  • Group D: $0.08246 / kWh

* Hawaii residents, you should double all costs from Group A to get a good estimate from here on out.

If you are in a state from Group D (as I am) you are getting power for about half the cost of someone from most of the northeast or California.  The question is though: does this affect the capacity for profit when Bitcoin mining?

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These results show each of our GPUs used in our initial performance evaluation of Bitcoin mining but instead in terms of cost per day to run them.  Each grouping of states is presented on each card or configuration and the results are interesting.  For reference you can see our power consumption results here in terms of performance per watt.  The AMD A8-3850 APU uses just $0.305 / day to run its mining operation while "The Beast" takes $2.112 / day to do its work in the Group D states.  If you happen to live in the more expensive area that power will cost you $0.584 / day and $4.048 /day (!!) respectively.

Just so you can see it easily and in graph form, here is the same data but scaled up to a month (30 days) and a year.

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If you are running "The Beast" as your mining system you can expect a price for power as high as $1,477 each year which will obviously affect your profit margins to say the least.  Even the Radeon HD 5830, one of the community's most popular cards, it can cost you anywhere from $169 / year up to $325 / year - as much as three times the cost of the GPU itself!  

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And just for a good reference point, here is the graph of the "potential" profit of each mining configuration from our previous performance centric article.  For the Radeon HD 5830 you can subtract the cost of power of $169 or even $325 from the $538 total Bitcoin mined value for a total profit range of $369 all the way down to $213.  A system like "The Beast" sees a similar drop in overall profitability going from $3,637 after paying for the hardware itself down to as little as $2,160 in those more expensive states. 

Closing Thoughts

If you are in the market to build a system for Bitcoin mining you should obviously be aware of how the cost of power will affect your profits and loss.  If you decided to Bitcoin mine on a GeForce GTX 590 you would actually lose $776 in your first year living in the northeast, California, etc.  In fact, NO cards from the GeForce lineup would make you a profit in the first 365 days after purchasing the card.  Even if you already own the card today, the power it costs to run the GTX GPUs might exceed the value of the Bitcoins you can mine over that same period.

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Maybe this image should have Bitcoins being taken BY the GeForce instead...?

The AMD lineup is obviously a much better option in terms of power efficiency and cost efficiency, making them the hands-down winner in this battle.  Even with that in mind, you should be sure you are aware of all the costs and potential pitfalls (lowering or rising exchange rates, higher power rates during the summer) before starting into the world of Bitcoin mining. 

P.S. - If you live in Hawaii....just go to the beach.

Questions or comments for us?  Let us know in the comments section below!  (No registration required.)

Further Reading

 

July 13, 2011 | 06:11 PM - Posted by Jaymoon (not verified)

I must be doing something wrong... I've been generating off and on for a couple months now, and I'm still at 0.00.

Maybe one day!

July 13, 2011 | 09:50 PM - Posted by Pororo (not verified)

Yes the thing you're 'doing wrong' is trying to solo mine. Try joining a mining pool instead, so that you can earn the coins more gradually (instead of 50 at a time - or none).

July 13, 2011 | 07:27 PM - Posted by Anonymous (not verified)

Solar Power!

July 13, 2011 | 07:43 PM - Posted by Daniel Spiewak (not verified)

Very nicely balanced and well-researched articles! One thing it is important to note though: the difficulty of mining will rise exponentially with the number of bitcoins in circulation. This is what ensures that will only be 21 MBTC total in the economy when all is said and done. This isn't a concern for short-term, recreational mining. However, when you start throwing around time scales on the order of years, you really must take this into account.

The rate of BTC introduction is predictable, thanks to the way the math is balanced, but unfortunately I don't have those numbers off-hand. It is quite certain though that the profit margins on mining over long periods are going to be inflated. For example, the 5830 gives a profit of $214 at current exchange rates over the course of a year. However, with the increasing difficulty, we can assume that the payout is going to decrease a fair bit over that time, netting a profit closer to $180 or maybe even $150. Within a year or two, mining will no longer be profitable *at all*. There is some argument that the exchange rates will counter-balance this difficulty increase (due to deflation of BTC as the economy approaches peak), but it is unclear how accurate these predictions are.

My advice: bitcoin mining can make you a few bucks in the short term, but don't plan on using it as a major source of funding. You should probably only get into mining if you're actually interested in bitcoin, rather than just seeing it as a potential source of income.

July 13, 2011 | 08:38 PM - Posted by Ryan Shrout

A very good post, Daniel, thank you. I agree with you that the increasing difficult should be factored in but I found no reliable (re: from the source) information about how to do so.

But I do agree that looking at this project for a 1+ year standpoint might be more than a bit optimistic. :D

July 14, 2011 | 01:13 AM - Posted by Anonymous (not verified)

How about run the numbers using figures from 3 months ago? The price of cards didn't change that much, just difficulty and exchange rate. Discussing the profitability of mining using a single point in time, even if you mention its limitations, is simply misleading.

July 14, 2011 | 04:30 AM - Posted by wcoenen (not verified)

the difficulty of mining will rise exponentially with the number of bitcoins in circulation. This is what ensures that will only be 21 MBTC total in the economy when all is said and done

This is not correct. The difficulty is not linked to the amount of coins. Instead, it is automatically adjusted every 2016 block (~2 weeks) to keep the average time between blocks at 10 minutes. It can go up or down depending on the total hashing power of the network.

What ensures the 21 million BTC total is the fact that the reward is halved every 210,000 blocks (~ 4 years).

See also the How bitcoin works page at the bitcoin wiki.

July 14, 2011 | 12:49 PM - Posted by Daniel Spiewak (not verified)

Thanks for the correction. I did some reading last night and realized my statement was in err.

Even with that though, the point still stands because the reward is halved. It's not the difficulty of mining that rises exponentially, it is the difficulty of *profiting*.

July 14, 2011 | 03:52 AM - Posted by V2-V3 (not verified)

You need to join a mining pool like bitclockers.com to get consistent payouts. Solo mining can take months to get your first payout

July 14, 2011 | 07:09 AM - Posted by BtcWlt (not verified)

Everybody forget about volatility in Bitcoin difficulty which may jump higher so mining return value will be less. Also lower difficulty may lead to falling exchange rate of BTC to USD. Here Bitcoin profit calculators taking difficulty into account.

July 14, 2011 | 12:39 PM - Posted by Anonymous (not verified)

Yeah, but these are residential electricity rates.

Any serious large scale mining business would be stupid not to get electricity for discount commercial or even industrial rates.

How do those differ across the world?

July 15, 2011 | 12:45 PM - Posted by Anonymous (not verified)

It would also be good to note the power savings people are getting from Under-clocking memory on the video cards.

A member of my mining pool was measuring his total usage and got around 25-30% power savings from simply underclocking his gpu memory.

July 15, 2011 | 02:09 PM - Posted by Anonymous (not verified)

Under clocking the memory also helps with lower the GPU temperature. My default is 1200mhz, and I run it was 300mhz. Same hashrate with the lower speed.

July 15, 2011 | 03:17 PM - Posted by Ivan S Kirkpatrick (not verified)

For a business, the cost of power is usually considered a business expense. The cost of hardware is amortized over 3 years in the USA and results in a 30% depreciation allowance on taxes.

I will carefully document the power usage on my 3 mining machines and include the extra heat load on the AC as the cost of doing business.

By considering the after tax (Federal USA) factors the costs of mining bitcoins as a business are affected. This also means one needs to pay taxes on the income as represented by the bitcoins mined.

July 15, 2011 | 07:04 PM - Posted by Crystal (not verified)

It wasn't mentioned in the post but are these averages taking into account the tiered structure of the energy systems in many if not most states?

Forgive me if this was addressed and I somehow missed it... :)

July 15, 2011 | 07:05 PM - Posted by WDgann (not verified)

Dear Patrick,
You do not and should not pay taxes on generating bitcoins. This because the government does not regard this venture as value added, and your trading does not have to involve a participant in your own country + selling a bitcoin abroad is not regarded as export. Last point to make is that bicoins are not registered on name.

With other words you are just receiving money from an anonymous adress. Don't think about paying taxes, this is not necessary so avoid it. Let say you use a computer belonging to your firm for generating bitcoins, then it is recommended to transfer the bitcoins to you personal wallet and then transfering them to cash, since it could be regarded as income by the taxing agency.

Kind Regards

July 15, 2011 | 09:30 PM - Posted by Nintari (not verified)

ummm... so what specs does "The Beast" Have?

July 18, 2011 | 11:30 AM - Posted by Ryan Shrout

You can check it out here: http://www.pcper.com/reviews/Graphics-Cards/Bitcoin-Currency-and-GPU-Min...

July 26, 2011 | 05:32 PM - Posted by AParsh335i (not verified)

Ryan, i was wondering what you thoughts were on this:
A8-3850 + 3x 5770 vs basic sempron + 2x 5870 accounting for power consumption as well.

July 16, 2011 | 07:01 AM - Posted by Touche (not verified)

I made a Bitcoin profit calculator for Excel. It estimated my maximum profit to be around $40 after 55 days running a 6970 flat out 24/7. Since I live in the UK, my electrical costs are high. It also assumes the difficulty level increases at a steadily defined rate (I used 13.33%, but feel free to change it to whatever you like). If you were looking to buy a rig specifically for mining, you had better get cheap (free) electricity, or hope the difficulty rate stays low and the value of Bitcoins stays high (good luck with that !). Download it and play around with it if you like. Enter your own values on the orange cells in the 'Variables' sheet. It can be found here : http://www.fileserve.com/file/ase7vCp

July 30, 2011 | 06:06 PM - Posted by polak (not verified)

A w Polce kosztuje 0,61 PLN za KWH -
In Poland 0,2 $ per KWH :-)))))

August 3, 2011 | 07:12 AM - Posted by stu (not verified)

so is anyone apart for big startups actually making money mining? I mkean enough money to live or or even be a decent supplement?

September 12, 2012 | 08:46 PM - Posted by Anonymous (not verified)

waste of time and money

November 27, 2012 | 10:34 AM - Posted by Frederik (not verified)

bitcoin is a step in a logical path. In a sociëty that is increasingly complexer, where people tend to loose a grip on their lives, bitcoin fits to people with selfrespect and values. Even when there are coming other options over the years, for now bitcoin provides against the moneygrasp of the elite that robs the people. Bitcoin can just become a succes if people are going to get it. Numerous people will not make their own accounts. So an army of people is needed to make things in every household available, door to door all over the globe. So if we would start bitcoin clubs in all towns we could make this happen.

December 16, 2013 | 10:51 AM - Posted by Anonymous (not verified)

Bitcoin mining is now pointless...
you cant win anything...
you only lose your money...

March 18, 2014 | 04:42 PM - Posted by Anonymous (not verified)

It look pointless, yes, as it would be cheaper just to buy them.
But by mining them you help to increase difficulty which means it,s more difficult to obtain coins by mining... Imthinking if bitcoins will remain as popular as today this should lead to higher bitcoin prices?
I think we will see soon as some new more powerful ASIC mining machines should be out Q1-Q2 2014. I already read article that has some calculations showing that even with these new ASICS mining will not be profitable after just couple of weeks... So either price will go up or...

May 13, 2014 | 11:02 AM - Posted by David Piepgrass (not verified)

I really wish somebody would simply publish the amount of energy required (in kWh) to mine a single bitcoin instead of short-circuiting to the final result, "potential profit". Calculating the profit requires assumptions about BTC exchange rates, electricity costs and equipment costs that I'd rather not have someone else make for me. Stating the energy cost per day is completely meaningless without knowing how many BTC are mined per day (which varies from card to card so that the cost numbers of different cards cannot be compared!)

Or even better, what is the procedure for estimating the energy cost? How many "hashes" or whatever are in a bitcoin, and at what rate can each card compute them? How soon is it until the mining costs double?

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