Ethereum: calculation of the average price of 1 btc generated
As one of the main altcoins in the cryptocurrency market, Ethereum has been the dominant force for many years. Thanks to the strong POS consensus algorithm and the high bandwidth of the Ethereum transaction, it is well prepared to continue its growth trajectory. However, as the cost of energy consumption increases, the impact of Ethereum extraction on our planet should be taken into consideration.
Is one of the common questions that arises in discussions about cryptocurrency prices is the amount of energy generates 1 BTC (or any other unit)? Although this may seem an intriguing question, calculating the exact price per unit of energy requires complex data analysis and modeling. In this article, we will examine the concept of energy consumption as the basis for an evaluation of 1 BTC, using shortcuts, difficulties and energy prices.
Power consumption paradox
Cryptocurrency mining, especially Ethereum’s consensus algorithm, is known as one of the world’s most energy consumed activities. It is estimated that the average energy consumption for an extracted bitcoin is 70 to 80 megawat hours (MWh). This impressive character raises questions about how much “1 BTC” really represents.
Concept: average price as power consumption
To calculate the price of 1 BTC in terms of energy consumption, we must understand that total energy production is directly proportional to the shortcut. If you use a higher shortcut, you will generate more electricity (and therefore more “1 BTC”) at an equivalent cost.
Here is a simplified example:
Let’s assume that average energy consumption in Bitcoin is 75 MWh, as estimated in several studies and reports. According to research published in the Cryptography Appled Journal, the total energy consumed by Ethereum mining can be divided into the following elements:
* Shortcut fee: The amount of shortcut speed used directly affects the cost of electricity. A higher shortcut indicator means that more electricity is generated at an equivalent price.
* Adjustment factor: This factor takes into account the changes in difficulty level, which affects energy consumption. A lower difficulty would require less energy to maintain a certain shortcut.
Let’s assume a difficulty 1.5 and proper 20 MWh power consumption in the BTC. We will use these values as examples:
* Example 1: Using a moderate shortcut (for example, 50 th/s) with an average energy cost of 0.05 USD/kWh.
* Example 2: With a high speed (eg 100 th/s) and the same difficulty.
Calculation of energy consumption as a basis for evaluation
To calculate the price of “1 BTC” in terms of energy consumption, we will use the following formula:
Energy consumption price = total output power / number of bitcoins extracted
In this example, we will suppose an average skin speed of 70 th/s and a difficulty correction coefficient of 0.5.
* Example 3: Using a moderate shortcut (for example, 50 th/s) with the same difficulty and energy costs.
* Example 4: with high shortcut (eg 100 th/s) and the same difficulty.
RESULTS
By simplicity, let’s calculate the price of “1 BTC” using example 3:
- Total Energy Energy: 450 MWh
- Number of bitcoins extracted: 0.75 BTC
Energy Consumption Price = 450 MWH / 0.75 BTC ½ $ 600 USD / KW-HR
Likewise, for example 4:
- Power Energy Total: 900 MWh
- Number of bitcoins extracted: 1.5 BTC
Power Consumption Price = 900 MWH / 1.5 BTC ½ $ 600 USD / KW-HR
Application
Although these calculations are a theoretical structure to understand the concept, it should be noted that real energy consumption and prices vary significantly, depending on several factors:
* Location:
Electricity prices differ depending on regions due to local living costs.