Table of contents
Understanding Block Targets
Bitcoin mining involves finding a nonce that‚ when hashed with the block’s data‚ results in a hash below a specific target. This target adjusts every two weeks to maintain an average block time of 10 minutes.
Calculating Energy Consumption
The target value (e.g.‚ 386085339 or 0x170331db for block 841395) is crucial. It’s split into an exponent and a coefficient. The formula to estimate joules per block involves the target‚ joules per terahash (J/TH) of a miner (e.g.‚ Antminer S21 at 17.5 J/TH)‚ and conversion factors.
From Joules to kWh
We convert joules to kilowatt-hours (kWh) to approximate the energy consumed per block. For example‚ block 841395 might consume 1‚839‚495 kWh.
Cost Analysis
Considering a power cost of 0.05p/kWh (an assumption based on network self-balancing)‚ and a block reward of 3.25 BTC (excluding transaction fees)‚ we can estimate the kWh per BTC and the basement power input price. In the example‚ it might be around 695‚370 kWh/BTC and 28‚300 (in the relevant currency) respectively.
Reducing Supply
Bitcoin has a reducing supply as people lose their keys‚ which can affect the number of bitcoins in circulation.
This contrasts with systems like Nano‚ which employ Delegated Proof of Stake (DPoS)‚ allowing stake delegation.
Daily Bitcoin Production
Given the block time and the current block reward‚ we can estimate the number of bitcoins created each day. With a target block time of approximately 10 minutes‚ there are 144 blocks mined per day (24 hours * 60 minutes / 10 minutes). As of the last halving‚ the block reward is 3.125 BTC. Therefore‚ roughly 450 bitcoins are “made” or mined per day (144 blocks * 3.125 BTC/block). This number will halve again in the future‚ further reducing the daily bitcoin production.
Impact of Transaction Fees
The above calculation only considers the block reward. Transaction fees also contribute to miners’ income and can fluctuate significantly depending on network congestion. During periods of high demand‚ transaction fees can represent a substantial portion of a miner’s revenue‚ impacting profitability and potentially incentivizing mining activity.
Network Difficulty and Miner Participation
The Bitcoin network’s difficulty adjustment mechanism ensures that the block creation rate remains relatively constant despite variations in the total hashing power contributed by miners. If many miners join the network‚ the difficulty increases‚ making it harder to find valid blocks. Conversely‚ if miners leave‚ the difficulty decreases‚ making it easier. This self-regulating system maintains the 10-minute block time average‚ influencing the daily bitcoin production.
