The Bitcoin mining breakdown: Is mining still profitable?

We provide an updated estimation of the energy consumption of the Bitcoin network, and a calculation of the evolution of the production cost of Bitcoin over time. Using these data, we conclude that since June 2018 Bitcoin mining is no longer profitable for commodity miners without access to electricity prices below 0.14 $/kWh. This phenomenon explains why many Western miners have dropped out of the circuit, further increasing the centralization of mining activity in China. In addition, we estimate that the marginal cost of the production of bitcoin is around 1,952 US dollars. Below this price the cost of mining would not be profitable, even with the most efficient equipment and the lowest possible price for the energy required. This could lead to a massive exit of the biggest mining players, with unpredictable consequences for the future of this cryptocurrency. (C) 2019 Published by Elsevier B.V.