Tl; Dr — Just skip to the last paragraph.
I have met with numerous large mining operations in the last two years (in the US, a few countries in Europe and China). I have seen a lot of different ways to set up mining centers.
The miners who pay the least in electricity pay about $ 0.03 per kwh. These are miners based in Washington State and some small operations in the European Alps. Both of these operations use hydro power.
Chinese miners pays about $ 0.04 per kwh. Some pay a little less and some pay a little more.
Some miners are inefficient at cooling and some are very efficient. Using HVAC is the most expensive. The small operations in the Alps are using the natural cool air to cool their miners. This seems to be the most cost-effective. The next most cost-effective is liquid submersion cooling.
Natural air-cooled mining centers are the cheapest to build. They basically just need fans to pull in the cool outside air and exhaust fans to exhaust it. These systems add about 5% in energy consumption for each miner.
HVAC is pretty costly to purchase and adds about 25% in energy consumption to each miner.
Liquid submersion cooling is very expensive to build but it is the most efficient. You can disconnect the cooling fans when the miner is submerged in liquid. This saves about 8% on energy usage per miner. So, liquid submersion cooling actually SAVES energy costs BUT it is crazy expensive to build.
S9 miner = 0.00082 btc per day = $ 6 per day Cost of electricity for each S9 miner = $ 1.25 per day Cost of electricity for each air cooling for each S9 = $ 0.07 per day Cost of electricity for HVAC per S9 = $ 0.25 per day Cost of electricity for liquid cooling per S9 = $ 0 per day
So, the miners who pay $ 0.03 – $ 0.04 per kwh AND spent the millions on liquid submersion cooling are the miners who can remain running the longest when the price drops substantially.
People feel that Bitmain has a distinct advantage in mining because they build the miners AND they run them as well. I have determined that this is NOT an issue at all for large miners who purchased their systems prior to February, 2018. If you purchased your miners before the recent drop really kicked in (around February) then you could have sold them after purchasing for a profit of $ 1,000 (then you would, obviously, immediately re-purchase). This will put your cost of each miner in line with Bitmain. Thus…you are on even ground with them as a competitor.
Most large miners bought their equipment and built their mining infrastructure when the price was rising. This means that most large miners are in VERY good positions because their infrastructure is likely paid off.
So, the best miners are currently making about $ 5 per day in profits for each miner. And the best of the best are making about $ 6 per day.
Bitmain has had the same miner for a long time. There has been no risk in owning this "old tech" for much longer than you'd own a server in a data center without any upgrades.
So, what does it all mean? Well, if the largest miners have already paid for their miners and infrastructure (which they have), then these largest miners can still be profitable at a bitcoin price of $ 2,000 now, which is their cost to mine 1 btc.
The price is pulling towards $ 7300 right now. Some mid-sized miners will start to shut down, temporarily, at about $ 7000 because they did not follow my plan of selling their miners after 3 months of use (then re-purchasing)….and they pay $ 0.11 per kwh for electricity. Oh…and they did not invest in the best infrastructure. So $ 7k-ish is their break-even.
I pay $ 0.00 per kwh for electricity because I built an off-grid, solar operation in the middle of the desert. And my exisiting miners have an average cost of $ 0 since I bought the miners over a year ago and I sold them after about 3 months of use (then I bought new ones from Bitmain). I'm NEVER gonna stop mining, regardless of price. But I only have about 1,000 miners. I think there are about 2 million miners currently working. I am not even noise on the network.
Bottom line: The majority of miners on the network are run by large miners. Mid-sized miners are going to start turning off around $ 6800-7000. I'm curious to see what happens if it drops to this level for a while. SUPER curious. I want to see what happens when it is JUST the few big guys.
**Edited to explain the difference between BIG guys and medium guys. $ 2k is the ACTUAL BREAK-EVEN price for the biggest players. A Bitcoin price of $ 0 is BREAK-EVEN for me but I don't move the needle….however I will keep mining til my equipment dies. For sure.