Vitalik Analyzes the Cost Structure of Bitcoin Mining and AI Inference

Ethereum co-founder Vitalik Buterin pointed out that about half of the costs of Bitcoin mining come from capital expenditures on computing power equipment, while the other half comes from electricity consumption; in contrast, the costs of AI inference are almost entirely dominated by capital expenditures on computing power. This reflects the different cost structures of the two computing businesses. Bitcoin miners need to continuously pay for electricity, and their profit margins are affected by mining machine efficiency, cryptocurrency prices, and network difficulty; AI inference, on the other hand, relies on expensive hardware investments such as GPUs, as well as equipment utilization rates and computing efficiency. As the demand for AI computing power grows, some Bitcoin mining companies have begun to shift their electricity resources and data center facilities towards AI and high-performance computing businesses, attempting to transform from pure mining to computing infrastructure services. Some mining companies have already utilized the electricity capacity prepared for mining to enter the AI data center market. However, transformation does not mean that cost pressures disappear: mining operations are directly affected by fluctuations in electricity prices and Bitcoin prices, while AI computing businesses must bear risks such as GPU procurement, depreciation, and underutilization. Both types of businesses compete for electricity and computing resources, and profitability depends on how these resources are converted into revenue.

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