Operating Expenditure

Operating expenditure, or opex, is the ongoing cost of running a business, as distinct from capital expenditure, the upfront cost of acquiring long-lived assets. In bitcoin mining, opex is dominated by electricity, with hosting, labor and maintenance making up the rest. A machine consuming 3,500 watts costs about $4.20 per day to power at 5 cents per kilowatt-hour.

Why it matters

The opex-capex split determines mining strategy and geography. Hardware is a sunk cost once purchased, so day-to-day mining continues as long as revenue exceeds opex, which is why revenue crashes idle old machines rather than new ones. Electricity's dominance pushes miners toward stranded hydro, flared gas and curtailed renewables, and turns them into unusually flexible load for power grids. Public miners' disclosed production costs vary widely with power contracts, hardware efficiency and network difficulty.

In the gold vs bitcoin debate

Gold mining carries the same cost structure at larger scale, with industry all-in sustaining costs averaging in the region of $1,300 to $1,500 per ounce in recent years. In both cases production cost forms a soft floor under price psychology, though neither asset's price is bound to it. The difference is the supply response: when gold prices rise, miners expand output and add supply, while bitcoin's difficulty adjustment ensures more mining spend produces no additional coins, only more security.