What is shutdown price? How to calculate the shutdown price?

For those who are new to cryptocurrency mining, the term “shutdown price” can be confusing. To put it simply, the shutdown price of mining machine represents the break-even point of mining machine operation and is the safety margin of mining machine.

Electricity is the main operating cost of mining machines because they consume electricity while operating. When profits from mining fail to pay the electricity price, losses will be incurred and miners will have to shut down their mining machines. In this case, the cryptocurrency price is called the shutdown price of mining machines.

Shutdown price is calculated based on specific mining parameters, including power consumption, hashrate, electricity price, network mining difficulty, percentage of miner's fee in the profit structure.

Daily mining income = (hashrate of mining machine *86400/ total network difficulty /2^32) * (Block reward + miner fee reward)

Shutdown price = electricity price * mining machine power consumption *24/ daily mining income

In addition to electricity price, mining also incurs operation and maintenance costs (charged by the mining farm), service fees (charged by the mining pool), machine costs and other costs. As a result, miners must consider a wide range of other costs in addition to the shutdown price when mining cryptocurrencies.

The shutdown price is only a reference to the current market price, and the actual shutdown price will also fluctuate according to mining difficulty and electricity price. The lower the electricity price and the lower the energy efficiency ratio are, the lower the shutdown price of the mining machines will be. At the extreme, if the electricity price is free of charge, the mining machine can never be shut down. In the early days of cryptocurrency mining, people stole electricity to mine cryptocurrencies.

Of course, the shutdown price is for reference only, for mining machines with a low safety margin, such as S9 and S11 mining machines, the reference significance is greater. For machines with a high safety margin, such as Bitmain S19 and WhatsMiner M30S+, this type of machines has a low safety margin as a cushion, so the reference value is not high. The shutdown price of mining machines can be queried directly on many websites.