Description: With Bitcoin grabbing so many headlines lately with its dramatic rise in price, accompanied by a fall back towards $10,000 per unit, some are focusing attention on the costs of creating it. The so-called mining process that generates new bitcoin requires a shocking amount of computer power with some miners setting up server farms to earn the bitcoin rewards. The computing power in turn consumes large amounts of electricity with an estimate that the amount of electricity to generate one bitcoin is equivalent to what the average American home would consume in two years.
Date: January 26, 2018
1) Have you ever attempted bitcoin mining?
2) Were you surprised by the high energy cost of generating bitcoin?
3) Using the techniques from Wiley’s Managerial Accounting: Tools fro Business Decision Making calculate the contribution margin per each unit of bitcoin generated at current prices.