Bitcoin Mining Costs Real World Money

The active mining of virtual currency in the online world for real world profit is nothing new. This has been a common process in a number of online video games, especially World of Warcraft where an entire economy has sprung up around the mining and selling of in-game currency. With the rising popularity of the digital currency Bitcoin, attempts to digitally mine the currency are increasing all around the world.

According to TechCrunch, the mining of Bitcoins is performed by unlocking blocks of data that "produce a particular pattern when the Bitcoin 'hash' algorithm is applied to the data." Considering that a single Bitcoin can be worth hundreds of dollars depending on the exchange rate, there are number of people all around the world keen on mining the virtual currency. However, reports indicate that as more of the virtual currency is mined, it becomes more difficult to find the next block of coins.

With increasing difficulty as time goes by, TechCrunch reports that many digital prospectors will spend more to find bitcoins than they can ever hope to make back. Reports indicate that bitcoin miners are using 1005.59 megawatt hours of electricity each day in their mining efforts. That works out to about $150,000 in electricity costs per day.

However, despite the high cost of electricity associated with mining activities reports indicate that on average most miners make money overall. Miners are reportedly generating $470,000 in revenue each day. Odds are that a number of large miners are making the bulk of that money. Some users have reported that the cost of electricity to operate a computer that continuously runs a mining algorithm costs more than digitally unearthed bitcoins are worth.

[via TechCrunch]