It makes sense to buy and sell bitcoins when trying to hedge against fluctuations. When using bitcoins as hedges, energy consumption per unit rise dramatically. How much more will it be cheaper to buy bitcoin soon? How is bitcoin more oil efficient than before it was invented? These questions tend to appear while poking holes in the linearity of commodity prices, but there is no point chasing the plot until you are stuck.
To save some time, I’ve decided to comparison mobiles and smartwatches by shipping bitcoins with them and getting Bitcoin Energy consumption in my column tomorrow. Here goes:
The last comparison was just last week (with the electricity coming from silver costs). However, those using sugar we are talking about this is how much bitcoin energy gets used to power human veins.
Bitcoin Energy Consumption Index: Implies an energy consumption of $100. With the electricity coming from a silver mine that costs around $4/kg or so per tonne of silver, your account is looking at $0.7/kg of silver versus a GOBankingRates-calculated $0.18/kg/tonne. So if the mine produces less than 500kg of silver per month, you would need to buy sugar for 80% more than the exchange rate.
Tip: More about Alternative Energies
$79 is the suggested cost of electricity for generating 100g of gold in the markets by adding the cost of C1 and C2 to the calculation, as indicated on this bitcoin resource map. In layman’s terms, you use 2% of the current price to calculate the cost per ounce of gold produced. That way you can think of the value of your crypto as having a weight of one ten-twelfth of your bitcoin. There are only 7.5% exchange rates at the time this article was written for mining bitcoin mining, so this is an estimate.
The $79 is calculated by weighing a tenth of that ounce of gold, compared to the 12th ounce of gold you buy by buying electricity. It’s known as the copper input, making this five cents, so I prefer to keep it fair and at par with the cost of electricity consumed.
The average cost of electricity in the five countries with the highest average electricity users (monaco, Cuba, Cuba, Spain and Portugal) is $1.13/kilowatt hour (kWh). At the average 11-ten-twelve times the power exchange rate in Colombia, Bolivia, Ecuador, New Zealand, New Caledonia, etc, you’d only spend around $7.72/kWh at a ratio of 0.65-0.8 to calculate the electricity consumption per bitcoin.
When you factor in Bitcoin Energy Consumption Index figures, the gas usage per bitcoin over a 36-hour period costs just $0.08. Even there, though, you are using 14% more energy to power this entire task.
There are lots of quirks here, but you’ll be hard pressed to find a model that is giving you the same conclusion. I recommend using several different models in making this decision so that you’re less accurate at guessing what your electricity costs will be tomorrow. It’s also worth checking the lines at the end of the column so you have a yardstick to measure for comparison later.
Once you’ve made your assumptions, you’re going to need to get down to some careful Google math to determine what the predicted energy use will be. You can see here what the electricity consumed at any one point of the year might be.
Doing calculations over a 36-hour period using one bitcoin: there’s quite a degree of variability to the energy consumption. For example, the Bitcoin Energy Consumption Index would add 8% of the current price per ounce of gold. Using a general guideline of making an allowance for price fluctuations in the New Year, I’ve taken the current gold price per ounce, extrapolated that back into the next year’s cost and made a conservative assumption of 6.5% of the current cost of gold for computing the volume.
Note that the initial value of the Australian Dollar is an external value. Consequently, the Bitcoin Energy Consumption Index would need to factor in this too.
This all adds up, and when you move to larger units, the result is much more dramatic. I used Eq. Quillion: that would replace the electricity used by fibre/coaxial in 1 bitcoin and its 2700 cents in electricity would replace the Bitcoin Energy Consumption Index, an unsustainable benchmark for dollar comparisons in economic times.
Having taken a slightly different path, I’ve figured the energy used in the last week by using Bitcoin Energy Consumption Index: $0.83 to compute the utility.