COMP90088: Cryptocurrencies and decentralised ledgers Semester 1 2022
Tutorial Sheet, Week 4 Week of March 21, 2022
1. Bitcoin difficulty
a. If the network hash rate is stable at 1.65¡Á1020 H/s, what is the difficulty of finding a
Copyright By PowCoder代写 加微信 powcoder
block? Express difficulty as the expected number of mining trials before a block is found.
b. If the difficulty is stable at 275.5, what is the network hash rate?
c. Bitcoin difficulty adjusts every 2 weeks. Suppose that the difficulty has been 274.02 and 2016 blocks are found in 12.5 days. What will the difficulty be after it is recomputed?
2. Bitcoin mining economics. Suppose you are thinking of mining Bitcoin, using a new A1166 Pro. This mining rig is rated to perform 81 TH/s (81¡Á1012 hashes per second) and requires 3.4 kW of power to operate. Assume that your power company bills $0.10/kWh, the current difficulty is 276.3, and the average reward for finding a block is $420,000 (these values were accurate for the start of Nov 2021 where mining rewards were at their peak).
a. How long do you expect it will take for your rig to find a block?
b. Using your answer for (a), what monthly revenue do you expect that the rig will earn?
c. What will the monthly electricity costs be?
d. At what network difficulty level would your rig exactly break even (monthly electricity cost = expected monthly revenue?)
e. Assuming that all factors stay constant, except for the Bitcoin network difficulty, which compoundingly increases by 5.5% per month (in line with historic growth over the past three years). How long will it take to actually reach the point where your rig should be powered off?
f. Taking into account that your revenue will be decreasing continuously, what is the expected life-time profit of your rig before you power it off?
g. Assuming that you are able to invest in wide-market index ETFs that yield compound returns of 0.8% per month, at what purchase price of the mining rig does it cease to be a good investment? Compare this to the typical market price of $10,000 for this rig.
h. Do you think this is a good investment? What other factors is this analysis ignoring?
程序代写 CS代考 加微信: powcoder QQ: 1823890830 Email: powcoder@163.com