estimating the marginal industry cost of extracting bitcoin within its network: implications for evaluating the expected profitability of individual farms

With the expansion and greater acceptance of the bitcoin network, a more in-depth economic understanding of it becomes necessary. one of the needed dimensions being chosen as a goal in this research is the evaluation of bitcoin mining industry costs. due to the similarity of bitcoin mining to exhaustible natural resources, paying attention to the main factors of mining and their associated costs at the industry level, which is far less uncertain and more inclusive rather than farm or one miner, is needed. with the information obtained about the cost of mining bitcoin industry, the expected cost of the individual farm engaged in this activity will be presented. from 60 sample miners whose publication dates were from the beginning of 2019 onwards as representative blocks, the average hash rate and the average time to create each 2016 blocks in the period from the beginning of 2019 to the 20th of june 2024, were used to evaluate the cost of bitcoin industry. the difference between the price and the marginal costs of miners (called economic rent of bitcoin production) was also evaluated. this was in contrast to previous studies assuming price was equal to marginal cost of mining cost. the findings showed that a significant part of the costs in the bitcoin industry was related to energy use, while capital services costs covered a smaller share of the industry's costs. one possible area of further research would be to investigate the role of social industry costs.