Two miners have the same hashrate. One pays much less for electricity and uses more efficient equipment. What follows for profitability?
Correct answer
Answer D: The more efficient miner can be more profitable because both revenue and operating costs matter.
Quick explanation
The same hashrate does not automatically mean the same profit. Expected mining revenue must be compared with costs; electricity price, equipment efficiency, difficulty, fees and the Bitcoin price all affect the result.
Detailed explanation
A miner earns revenue when its operation or pool receives a share of valid blocks. Block revenue consists of the subsidy and transaction fees in bitcoin. Its value in a national currency also depends on Bitcoin's market price. An operation's expected share depends on factors including its proportion of total hashrate and the pool model used.
Against this are costs: electricity, cooling, staff, location, financing and hardware purchase or depreciation. More efficient devices produce more hashes per unit of energy. If total hashrate and difficulty rise while one's own power stays unchanged, the expected share of block revenue falls.
This does not establish a technically guaranteed price floor. If market price falls, inefficient miners may shut down or defer investment; hashrate may change and difficulty adjust later. Production costs thus respond to price, competition and technology. They do not automatically determine market price. Hashprice, in simplified terms, is expected revenue per unit of computing power and time.
Example or everyday application
Two miners have equally fast devices but pay different electricity prices. At the same Bitcoin price, the cheaper operation may be profitable while the other shuts down.
Sources used
PLOS ONE - Energy and cost efficiency of Bitcoin mining endeavor
Check original sourceBitcoin Developer Guide - Mining
This source is mainly intended for developers. The relevant information may therefore be harder to find.
Check original source