How long can a Bitcoin mining machine mine?

The physical life of a Bitcoin miner

The life of a mining machine can be divided into “physical life” and “economic life” of a mining machine. The physical life of a mining machine refers to the time that has elapsed since the mining machine was put into use in a completely new state until the mining machine is damaged and scrapped. Explained in vernacular, it is how long the mining machine will be completely scrapped due to irreparable failures, wear, aging, damage and other reasons.

There are two main factors affecting the physical life of a mining machine: the quality and operation and maintenance of the mining machine.

The quality of the mining machine is closely related to the factors such as the mining machine manufacturer and the structural design of the mining machine. For example, the Antminer, which is famous for its low power consumption, uses a series circuit to supply power to the hash board. If one of the hash board circuits or chips fails, the entire hash board will be unusable.

The operation and maintenance level will also affect the physical life of the miner. A large amount of heat is emitted during the operation of the mining machine. If the cooling is not timely or the fan on the mining machine is damaged, the continuous high temperature will cause the mining machine to stop and even cause a short circuit inside the mining machine. In addition to temperature and humidity, if the air is too humid, it may cause rust and corrosion of the mining machine. In addition, in mines in Xinjiang, Inner Mongolia and other places, because there is a lot of sand and dust, it is necessary to regularly check the dust condition of the mining machine. If the dust is not cleaned in time, the physical life of the mining machine will be affected.

Under normal circumstances, the physical life of a mining machine can reach 5-10 years. For miners, what is more important is the economic life of the mining machine.

Economic life of Bitcoin miners

The economic life of a mining machine refers to the useful life of the mining machine from the perspective of costs and benefits. Simply put, just look at the two indicators of the “electricity expense” and “mining output” of the mining machine (because the maintenance cost of the mining machine is less than the electricity expense).

When the mining output of a mining machine cannot cover the cost of electricity, the economic life of the mining machine ends. Under normal circumstances, the economic life of the latest mining machine can reach more than three years.

First, the mining output of the mining machine is greater than the electricity cost expenditure, the mining machine can always run

The mining output of a mining machine can be divided into block rewards and fee rewards. Take Bitcoin as an example, the current block reward is 12.5 BTC, and the handling fee is about 1.4% of the block reward. During the bull market, the Bitcoin network is easily congested and the handling fee will increase. The commission reward is up to 10BTC or more.

The mining competition is very cruel. The sum of the daily mining output of all miners is basically determined. The higher the computing power involved in mining, the lower the output of unit computing power.

At present, Bitcoin’s entire network computing power is about 109EH / s. Based on the average daily output of 1800BTC, the unit of computing power per TH / s per day is about 0.00001624BTC. If you have a computing power of 55TH / s (such as an ant T17 miner), then your daily mining output is about 0.000891 BTC.

The output per TH / s computing power is inversely proportional to the entire network computing power. If the computing power of the entire network increases, the output per TH / s computing power will decrease, and vice versa. Generally speaking, the computing power of the entire network rises quickly in a bull market, and it may even stagnate or fall in a bear market.

In addition, in the long run, the iterative upgrade of the mining machine will continuously improve the performance of the new mining machine. In the process, the old mining machine with low performance will gradually be eliminated. Slowing down the increase of the computing power of the entire network can appropriately extend the economic life of the new mining machine.

Second, the low electricity cost extends the economic life of the mining machine

Electricity cost has a greater impact on the economic life of the mining machine.

The electricity used in the mine is mainly thermal power and hydropower. Thermal power is mainly concentrated in Sichuan and Inner Mongolia, and prices are relatively stable. Hydropower is mainly concentrated in Sichuan, Yunnan and other places. Due to the influence of seasons, Sichuan and Yunnan have high and low water periods. .

During the dry season, some mines will be shut down and sealed. When the flood season, if the mining can continue to make profits, the miners will restart the mining machine.

Different miners have different electricity costs. Electricity costs are also the core competitiveness of miners. Therefore, the economic life of the same mining machine is also different. For example, because of the low currency price, many small miners had high electricity costs and had to shut down the Ant S9 miner and sell the miner to a large miner with the advantage of electricity bills.

At present, some domestic miners are also transporting mining machines that will be phased out, such as the T9 +, to countries with lower electricity costs such as the Middle East.

Third, Bitcoin halving every four years has an important impact on the economic life of the mining machine

Due to the block reward halving mechanism, Bitcoin’s block reward will be halved approximately every four years. In May this year, Bitcoin will usher in the third block reward in history, which is halved from the current 12.5BTC to 6.25BTC.

After bitcoin is halved, miners will bear the brunt, because the mining output of mining machines will be directly reduced by half (regardless of the commission reward), and some old mining machines with low performance will face the fate of shutdown.

Fourth, the progress of technology makes the economic life of mining machines longer and longer

The current mainstream mining machine is 7nm, and it is expected that 5nm mining machines will appear around March 2020. As the chip process of the miner is getting closer to the physical limit, Moore’s Law gradually fails, and the upgrade of the chip becomes more and more difficult.

The iteration of the chip is gradually slowing down, and the subsequent enhancement of software and hardware has a limited increase in the power consumption ratio of the miner, which may extend the economic life of the existing miner.

summary

The life of the miner is divided into the physical life and economic life of the miner. As a miner, we need to pay attention to the economic life. The main factor that determines the economic life of a mining machine is the electricity cost and mining output of the mining machine. When the electricity cost exceeds the mining output, the economic life of the mining machine expires.

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