Bitcoin Farm Model - Excel Template
Originally published: 16/04/2021 08:23
Last version published: 05/10/2021 09:39
Publication number: ELQ-52787-7
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Bitcoin Farm Model - Excel Template

Financial model of a BTC (Bitcoin) cryptocurrency mining farm in Microsoft Excel.

Description
This model allows to model a BTC mining farm.
It accounts for the following factors:
- BTC current price and price predictions
- BTC mining difficulty and its growth
- Mining pool fees
- Electricity prices
- ASICs prices
- Other capital expenditures
- Stuff salaries
- Rent expenses
- Provision for any ASIC (hash rate, electricity consumption, degradation rate)

The model allows to asses the mining project:
- required capital expenditures
- farm revenue in BTC and $
- operational expenditures (electricity, rent, salaries)
- net cash flow
- payback period
- internal rate of return

Info about bitcoin mining:
Bitcoin mining is the process by which new bitcoins are entered into circulation, but it is also a critical component of the maintenance and development of the blockchain ledger. It is performed using very sophisticated computers that solve extremely complex computational math problems.

Cryptocurrency mining is painstaking, costly, and only sporadically rewarding. Nonetheless, mining has a magnetic appeal for many investors interested in cryptocurrency because of the fact that miners are rewarded for their work with crypto tokens. This may be because entrepreneurial types see mining as pennies from heaven, like California gold prospectors in 1849.

Miners are getting paid for their work as auditors. They are doing the work of verifying the legitimacy of Bitcoin transactions. This convention is meant to keep Bitcoin users honest and was conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping to prevent the "double-spending problem."

This Best Practice includes
1 Excel File

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  • Eduardo Smith(last updated: 10/09/2021 15:58)
  • Kevin O'DC(last updated: 27/05/2021 06:03)
    Practical and Easy to understand
    Practical and Easy to understand

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Discussion feed for Bitcoin Farm Model - Excel Template

The user community and author are here to help. Go ahead!

  • Kevin O'DC
    Hi there,

    I hope this message finds you in the best of health.

    In the Electrical Consumption box on sheet "Mining Farm" the following equation is set "=3250*24/1000".

    What did you choose to divide the power consumption by 1000?
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    • Alex Martyanov
      Hi Kevin,

      Thanks for using my model.
      Total monthly electrical consumption of one ASICs in kWh may be calculated by:
      [ Electricity consumption in W ] * [ Number of hours in month (24 * 30) ] / 1000 (transforming Wh to kWh)
      I've made these steps more straightforward in the updated version of the model. It should be available very soon after review by the site administration.
      arrow_drop_uparrow_drop_downReply reply
      • Kevin O'DC
        Hi Alex,

        Thank you for the updated version.

        The model assume the flat price prediction of 57k. What do you think of Bitcoins Stock to flow model as a future price predictor? https://stats.buybitcoinworldwide.com/stock-to-flow/

        Is the 5% degradation for the Antminer S19 PRO arbitrary, or does this data come from a specific source (Same for other ASICS on the list).
        arrow_drop_uparrow_drop_downReply reply
        • Alex Martyanov
          Hi Kevin,
          I believe the current bitcoin price is mostly affected by its degree of acceptance (through PayPal, Visa) and its regulations (tightening by China government). Both factors are hard to model as we need to predict the amount of BTC-related payments in the first case, which is complicated, range of predictions will be too broad. Future government decisions (in a few main countries) could vary to a high extent too. So with the two unknowns, it is a tricky task to guess the right price.
          Bitcoins Stock to Flow model could be useful in the long run, when the BTC supply/demand are balanced. Currently, they are not balanced, and a change in acceptance/regulations could dramatically change the balance.
          I've not seen any trustworthy S19 PRO degradation rate info. The 5% for S19 PRO is an arbitrary rate.
          arrow_drop_uparrow_drop_downReply reply
    • Raul Terroba
      Hey is there any way to have this made in Sheets format. I downloaded it and my chromebook can only open sheets & some of the formulas will stop working....
      arrow_drop_uparrow_drop_downReply reply
    • The Engineer
      Hi Alex,

      I have downloaded the sheet. Great work. Highly appreciated. I have to submit one mode as a part of my Master degree, so please if you can help in what factors/inputs should I change and also how to update the bitcoin prices to the sheet other than manual typing. thank you
      arrow_drop_uparrow_drop_downReply reply
      • Alex Martyanov
        You need to fill input cells (orange ones) at the "Mining farm" sheets based on current BTC price, BTC mining difficulty, parameters of chosen ASICs, and electricity price.
        arrow_drop_uparrow_drop_downReply reply
        • The Engineer
          * deleted *
          • The Engineer
            Thanks Alex, if I'm using ASIC with electricity consumption of 3.25kwh and I assume the that the power which I will have in the mining farm is 1,800,000kwh, so how many ASICs can I use? thanks
            arrow_drop_uparrow_drop_downReply reply
            • Alex Martyanov
              Your ASIC has power consumption of 3.25 kW, i.e. it consumes 3.25 kW per hour or 24*3.25 per day (24h). If you have an available power source with 1,800,000 kW, then you can use 1,800,000/3.25=553846 ASICs. Because the number of ASICs is too big, I assume there could be issues with kW and W or/and with kW and kWh.
              arrow_drop_uparrow_drop_downReply reply
      • Arthur Williams
        Hey Kevin,

        Great work. Well done. Is there an action button to import my data from the mining company if I would like to use it? Also, is there a tab or info that calculates when a miner is deprecated and is ready to sell back to market? Depreciation, I mean.
        Thanks
        arrow_drop_uparrow_drop_downReply reply
        • Alex Martyanov
          Hi Arthur,
          The model is very flexible and these features can be relatively easy added to the model manually.
          arrow_drop_uparrow_drop_downReply reply
        • Noah Ward
          Does this model work for other crypto mining ie Ethereum?
          arrow_drop_uparrow_drop_downReply reply
          • Alex Martyanov
            The current version of the model works only for BTC mining.
            arrow_drop_uparrow_drop_downReply reply


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