Bitcoin Hash Rate Doubles in Three Months, Mining Now Costlier Than Buying One BTC

According to research by Sam Doctor, a quantitative analyst at Fundstrat, Bitcoin mining costs have doubled since May.Increasing Hash Rate.

Late last week, Doctor released a cost analysis of the notoriously expensive Bitcoin mining process that supports the pioneer cryptocurrency.

His research concluded that Bitcoin's requisite hash power of 57 exahash per second, or energy required to confirm transactions, now costs more than $4,000 per BTC in terms of average electricity cost.

The figure excludes individual overheads and machinery wear-and-tear, which could drive costs up to $7,000 per coin to sustain a profitable mining venture.

While Bitcoin may appear to be a poor investment for some, based on its rising mining costs, several reports suggest the digital asset is the first crypto investment for a large part of the population.

While high mining power could mean individual miners seek mining lesser-known altcoins, the incentives for large entities like Antpool and BTC.com to stay honest remain high.

With all the aforementioned costs, Fundstrat's research pegs mining costs-per-coin at $7,300, a substantially higher amount than the current Bitcoin price of $6,268.

Long-term the amount of mining being done will adjust the direction of Bitcoin's market price; mining operations will slow down or the bleed will continue until some miners run out of funds, allowing the process to once again become profitable for the survivors.

Lower Bitcoin prices are more profitable for retail miners, who don't allow the network to face a slow demise or give way for conglomerates to dominate the market or give way for conglomerates to dominate the market.

Still, mining pools are notoriously secretive about their cash flows and it is possible that some of these companies are paying less.