A couple of weeks ago, we gave you freaks a mining update in which we shared Hut8's Q3 earnings report and commented on their profitability. Well, upon further review of their financial statements from our friend Ceteris Paribus, it seems that their representation of the cost to mine one bitcoin is a bit misleading as it does not include depreciation, expenses and net finance expenses in the calculation. When these costs are taken into consideration, Hut8's cost to mine one bitcoin moves from ~$4,300 to ~$7,100. Ironically, this is where the price is currently hovering around.
Now, this is not to say that Hut8 is trying to be intentionally misleading. It's entirely possible that they're simply executing an accounting strategy that front loads depreciation costs and discounts it over time. With that being said, as Ceteris points out, there is more to the true cost of mining beyond simple production costs. It will be interesting to see how Hut8 fairs in the upcoming quarters as their equipment continues to depreciate and they're forced to begin purchasing and swapping in new miners.
Accounting, man. You let your guard down for a quick second and you forget that it is a system used to manipulate data to paint a particular picture. Another tool of the system that masquerades the truth.
Well, anyway. Don't forget to tell your relatives that Bitcoin mining is actually a net positive for the environment at Thanksgiving dinner this year.
Continue on with this traditionally lazy week with some Marvin Gaye.