21 Mar 2022
Hashprice: The king of bitcoin mining metrics
The business model of mining is producing hashes that are "sold" to the Bitcoin network. How much are these hashes worth, and how has that value developed over time?
The king of mining metrics - the hashprice – shows miners' daily revenue per unit of hashrate production, Terra Hash per second (TH/s). The hashprice is the same for all bitcoin miners, and we can use it to calculate their revenues.For example, the mining rig Antminer S19j Pro produces 100 TH/s. The current daily hashprice is $0.19 per TH/s. To calculate the daily revenue of this mining rig, we multiply $0.19 with 100 to get $19 per day.Since its November peak, the hashprice has plummeted, pressuring the margins of bitcoin miners. The lower margins are reflected in the share prices of public miners, as most of them are down more than 50% since November.Two factors affect the hashprice: The Bitcoin difficulty and the bitcoin price. Increased difficulty means that each hash has a lower probability of solving a block – reducing the bitcoin denominated value of a hash. A lower bitcoin price further reduces the fiat denominated value of the hash.The takeaway is that all bitcoin miners have the same revenue potential, earning the same amount for each hash they produce. Therefore, minimizing costs is the only thing a bitcoin miner can do to gain a competitive advantage, which we explain further in this article.