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Evolution of mining: $0.02 per kWh with direct connection to NPPs

09 Mar, 2023
Evolution of mining

Miners are inventing even more new ways to increase their profits. While some are turning to renewable energy sources, others are buying equipment from bankrupt competitors at bargain prices. TeraWulf took a somewhat different route and launched the first mining centre in the US, which gets its electricity directly from a nuclear power plant and bypasses the distribution grid.

Image source: twitter.com/TeraWulfInc

The Nautilus Cryptomine mining centre is powered directly by Pennsylvania's 2.5GW Susquehanna nuclear power plant. TeraWulf chairman Paul Prager said this has resulted in the lowest rate ever in the industry: 2 cents per kWh for five years.

It's rather difficult to estimate the cost of Bitcoin mining because, in addition to electricity costs, the figure can include capital costs and direct expenses, such as employee remuneration. The MacroMicro portal puts the current average cost of mining at $26,000, which exceeds the coin's value.

Image source: macromicro.me

On the one hand, the high cost is confirmed by the bankruptcy of some mining companies in 2022, including industry leader Core Scientific (Chapter 11 reorganisation proceedings have been initiated). On the other hand, network hashrate is breaking record after record, indicating that new ASICs are being connected and competition is getting tougher.

Image source: coinwarz.com

So industry representatives' claims are the best sources to trust when estimating the cost of Bitcoin mining. For example, Northern Data CEO Aroosh Thillainathan estimated the cost of Bitcoin mining at $11,000 when the latest ASICs were introduced in December 2022 and with electricity costs of $0.03 per kWh (using renewable energy sources).

Image source: StormGain cryptocurrency exchange

The double-digit gap with the current price fully explains the ongoing arms race in the mining market. The mining companies buried in debt (with Core Scientific leading the way in this regard) or that don't have a sound business model are leaving the market and being replaced by more efficient projects.

Nautilus Cryptomine is currently running 8,000 ASICs with a total processing capacity of 1 EH/s and plans to double this by May, giving TeraWulf a combined power of 5.5 EH/s. With the right timing, this would place the miner among the top five largest publicly traded mining companies in terms of computing power.


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