Just like any publicly listed company, bitcoin mining operations must disclose the cost of revenue as part of their financial income statements. The cost of bitcoin production analyzed and visualized by TheMinerMag takes each company’s cost of revenue for the proprietary mining segment and divides it over the amount of BTC mined during a quarter. 

A company’s cost of revenue in the proprietary mining segment typically includes energy costs, which take up the most part, as well as other necessary site maintenance expenses. There are two most important factors determining a company’s cost of bitcoin production: the energy rates and mining fleet efficiency. In short, the lower the cost of bitcoin production, the better.

Depending on the business model, companies have different financial reporting styles. Some include the depreciation and amortization expenses as part of their cost of revenues but others do not. TheMinerMag’s data and analysis have removed the impact of depreciation because such expenses are not cash-based.

In addition, TheMinerMag’s methodology for analyzing the cost of bitcoin production across public mining firms over time removes non-recurring factors so that it is as much of an apple-to-apple comparison as possible. Such non-recurring factors, for example, could be power credits received from curtailment activities that do not always happen every quarter. 

However, when visualizing the cost of bitcoin production of companies individually over time (take Riot), TheMinerMag takes into consideration non-recurring factors.