Mining for Bitcoin at $0.04 kwh in a secluded industrial city
You likely have never heard of Norilsk, an old industrial city in northern Russia, just above the artic circle. It is pretty secluded with a single railroad as the only connection to anywhere else in the world.
Bitcluster recently launched a Bitcoin mining facility in Norilsk near the end of last year. Norilsk currently has one of the cheapest electricity rates in the world. Even at $40,000 USD Bitcoin mining still highly depends on cheap electricity due to the scaling difficulty factor.
$0.04 kwh compared to the world average of $0.14 kwh is a major advantage over most mining operations, even competing with Chinese Bitcoin mining operations. A large portion of this power is created locally with the region's own natural gas and hydropower facilities.
Norilsk is extremely cold and the facility is housed under a canopy where the heat produced acts as a barrier from the outside snow.
Bitcluster is currently operating over 5,000 Antminer S19 in their Norilsk facility.
One of the interesting things I read about this facility, even though it is in -10 degrees Celsius, it still requires significant cooling due to the amount of units being housed in this facility.
I estimate this facility can mine around $37.5 million USD net revenue per year. 5,000 Antminer S19's produce about 550,000 TH/s at 17,500,000 watts of power and should mine around 3.29 Bitcoin at today's difficulty. Total power costs at $0.04 kwh are over $6 million USD by my estimates, that is over 600% profit over electricity costs alone at current price.
Why you should vote me as witness
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https://twitter.com/itsjustmarky/status/1351397651066085376
@themarkymark, "Bitcoin" is becoming mining token of crypto cities. In my opinion we can expect a series or movie on Bitcoin's journey. Stay blessed.
3.29 Bitcoin per...? Day?
None of my napkin math adds up to your numbers.
Never mind just figured it out... wasn't subtracting the $6M for energy to get the net gain. 3.29 BTC per day is quite the haul... So at these prices every day they can pay off the overhead cost of 40 miners... and it will take them 125 days to pay off all 5000 miners... that's pretty crazy. It only cost $15M to buy the miners and they can double their money in a year...
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Math is hard.
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What does STEM stand for?
Science, Technology, Engineering, Math.
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Too close to steem it'll never work.
STEEM is dead the price just hasn't reflected it yet. STEM is a very well known and widely accepted term for these topics.
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Steem is dead when the owner decides it's dead.
You must have this STEM conversation often,
at least twice in LEO Discord alone by my count.
Will be dead after the lawsuit for sure.
Nope, first time someone mentioned STEM naming in like 3-6 months.
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So you're saying I should get some STEM then?
I can't make that decision for you.
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Because of the stolen tokens?
Same problem here, doing the math was actually hard while burning 20 MWatts is way less than I expected at first. My Brain burned 20 Megapotatos just do get the numbers right.
It mother Russia bitcoin mines you :))
Jokes aside that place offers the perfect combination of low energy price and cold climate, because I'm sure those rigs produce a ton of heat and cooling them in warmer climate will dig into profits.
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If I had lower electricity costs, I'd put a mining farm under my driveway so it could melt the snow.
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lol :)
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I love looking at the basic technicalities of BTC mining - it's a very clever choice of location.
$37.5 million a year reminds you how small crypto is compared to the larger TNCs - it's such a tiny amount in the grand scheme of things.
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They are expanding, this was just the start.
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Just waiting for Energy Companies to burn additional Power Spikes from renewable energy into BTC. Should be better than pumping Water around.
https://twitter.com/zombificazione/status/1351453252903174146
well, add some money for maintenance, breakdowns, tech support, protection (I know that mining installations require bodyguards in russia), bribes, wages, rent, taxes and that 600% goes down fast.
but all in all, I guess it's still a pretty good business after all costs are discounted
It does, but it also becomes insignificant when BTC breaks $100K.
also true, 100k would make all this bear market stuff worth it and will be life-changing money for a lot of people
I've seen that oil and gas companies are installing BTC miners powered using waste gas that is normally flared.
That's free electricity.
Does this place seriously have no road or air access, only a single rail line?
"Norilsk is almost cut off from the world. It is connected by a railroad to only one city – the port of Dudinka. The only way to leave Norilsk is to then travel 2,000 km down the Yenisei River or by air. But due to bad weather a flight can be delayed for up to two weeks"
I feel like that's a dangerous place to be in! Do you think they care about COVID? :p
exactly
https://twitter.com/Bhattg18/status/1351504556019097601
Wow, that is pretty impressive. I am surprised that they need to have additional cooling as well. You would think they could just pipe in some of the air from the outside. I guess they would have to remove the moisture from it to protect the equipment... That is quite the operation and it is actually producing more than I would have expected.
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The cost at Mining of Bitcoin is truly not an easy task to say. It's capital intensive and requires lots of consistency in its production. Bitcluster has really done so well to have launched such bitcoin mining facility that consumes minimal power. I hope this makes more btc to flow in circulation as time goes on.
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In many Russian cities, the cost of electricity for the population is 0.037 cents - in the villages there is a discount and is 0.03 cents per kilowatt. In Norilsk such a price of 0.04 is possible for organizations and enterprises.
I guess it’s only appropriate the mining city modernise and add BTC to the list of stuff they mine.
Dang, that city is the size of Salt Lake City, in the far north.
damn that's a lot of profit!
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That is a very cold spot. And burning electricity for making heat ( I assume people there also feel comfortable at +22 C , like we do here) by the means of BTC miners is a very clever way to do this.
But power cost is just one limit to encounter.
The other is the mining DIFICULTY. It raises fast and consistently.
Back in the days, when I was still in mining affairs', I calculated myself a rather simple formula:
Your ASIC miner MUST pay off fully in the first 8 weeks of mining (in full, what you have paid for hardware)
Or.... it will NEVER pay off for you.
If you somehow get FREE electricity - then this time span may extend up to 10-12 weeks. Maybe even 16
That is the reality's.
At least - it was so 5-6 years ago
P.S.
NORISLK is as much north as norther coast of ALASKA or/and NORWAY. Brrrrrr.......
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So far they are not wasting power
to get bitcoins.
I do not hear people complain that
bitcoin mining cause global warming!?!
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Damn that's amazing. I wonder if they mine any alts?!
Let's see how it works out for this dudes :D