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Hashprice

Mining revenue per unit of hashpower over time

Contents

What is Hashprice?

Hashprice is the expected revenue a miner earns per unit of hashpower per day, expressed in USD (or BTC). It's the primary metric miners use to assess:

  • Current mining profitability
  • Break-even analysis vs electricity costs
  • ROI projections for hardware purchases
  • Market timing for mining operations

The metric was popularized by Luxor Technologies and is now an industry standard tracked by major mining publications and analysts.

The Formula

Hashprice can be calculated from first principles using difficulty and BTC price:

Hashprice (per PH/s per Day) $$\text{Hashprice}_{USD} = \frac{H_{day} \times R_{block}}{D \times 2^{32}} \times P_{BTC}$$
Where
$H_{day}$
Hashes per day at 1 PH/s = $10^{15} \times 86400 = 8.64 \times 10^{19}$
$R_{block}$
Average block reward (subsidy + fees) in BTC
$D$
Current difficulty
$2^{32}$
≈ 4.295 billion (difficulty scaling factor)
$P_{BTC}$
BTC price in USD

Simplified Form

The formula simplifies to:

Simplified Hashprice $$\text{Hashprice}_{USD} = E_{blocks} \times R_{avg} \times P_{BTC}$$
Where
$E_{blocks}$
Expected blocks per day at 1 PH/s = $\frac{H_{day}}{D \times 2^{32}}$
$R_{avg}$
Average reward per block (BTC)

Step-by-Step Derivation

Step 1: Probability of Finding a Block

Each hash has a probability of finding a valid block:

Per-Hash Probability $$P_{hash} = \frac{1}{D \times 2^{32}}$$

Step 2: Expected Blocks per Day

At 1 PH/s, a miner computes $10^{15}$ hashes per second, or $10^{15} \times 86400$ per day:

Expected Blocks (1 PH/s) $$E_{blocks} = P_{hash} \times H_{day} = \frac{10^{15} \times 86400}{D \times 2^{32}}$$

Step 3: Expected BTC Revenue

Multiply expected blocks by the average reward:

Daily BTC Revenue (1 PH/s) $$\text{BTC}_{daily} = E_{blocks} \times R_{avg}$$

Step 4: Convert to USD

Final Hashprice $$\text{Hashprice}_{USD} = \text{BTC}_{daily} \times P_{BTC}$$
Example Calculation

Given: Difficulty = 100 trillion ($10^{14}$), BTC Price = $100,000, Block Reward = 3.125 BTC

Expected blocks at 1 PH/s:

$E_{blocks} = \frac{8.64 \times 10^{19}}{10^{14} \times 4.295 \times 10^9} \approx 0.000201$ blocks/day

Daily revenue:

$0.000201 \times 3.125 \times 100000 \approx \$62.81$ per PH/s per day

Units & Conventions

Format Unit Typical Range
$/PH/day USD per petahash per day $40 - $150
$/TH/day USD per terahash per day $0.04 - $0.15
BTC/PH/day Bitcoin per petahash per day 0.0005 - 0.002
ELEKTRON Convention

We display hashprice in $/PH/day as this is the most common industry standard. To convert to $/TH/day, divide by 1,000.

Driving Factors

Hashprice is influenced by three main factors:

1. BTC Price ($P_{BTC}$)

Direct linear relationship. When BTC price doubles, hashprice doubles (all else equal).

2. Difficulty ($D$)

Inverse relationship. Higher difficulty means fewer expected blocks per unit of hashpower. Difficulty tends to follow hashrate growth with a ~2 week lag.

3. Block Rewards ($R_{avg}$)

Includes both the subsidy (currently 3.125 BTC) and transaction fees. Fees can vary significantly during high-demand periods.

Block Reward Components $$R_{avg} = R_{subsidy} + R_{fees}$$
Halving Impact

Each halving (every ~4 years) cuts $R_{subsidy}$ in half. If price doesn't compensate, hashprice drops by approximately 50% at each halving.

Mining Profitability Index

ELEKTRON calculates a Mining Profitability Index that normalizes hashprice against its historical trend to show relative profitability:

Profitability Index $$\text{MPI} = \frac{\text{Hashprice}_{current}}{\text{Hashprice}_{MA200}}$$
Interpretation
MPI > 1.0
Above-average profitability (good conditions)
MPI = 1.0
Average profitability (equilibrium)
MPI < 1.0
Below-average profitability (challenging conditions)
MPI < 0.5
Mining distress (miner capitulation likely)

Security Budget Metric

Related to hashprice, we track the "security budget" — the total USD value paid to miners per day to secure the network:

Daily Security Budget $$\text{Security Budget} = B_{daily} \times R_{avg} \times P_{BTC}$$
Where
$B_{daily}$
≈ 144 blocks (expected blocks per day)

This represents the economic incentive for honest mining and is a key metric for assessing network security.