Must-Read Reports

Exciting technology of digital sense of smell

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“Durian” has a very pungent smell but most Malaysians like the taste

According to a world-famous chef, the “king of fruit”, known in Malaysia as “durian”, has the most fouling smell. Despite that, many Malaysians and a couple of my former Korean neighbours like it so much. Due to its strong odor, the fruit is not allowed into hotels or planes. The bad odor sticks to the fabric of your car for weeks.

We are expecting that people all the world will have the chance to experience the smell of “durian” through digital transmission of smell in the near future.  

This article is the first of two articles on emerging digital olfaction or sense of smell. 

Marketers have been interested to study the impact of olfaction on purchasing decisions of consumers. Buyers of new cars are excited by the smell of new leather in very expensive cars. Cookies are openly baked to allow their smell to waft in a shopping complex.

According to an article in latest MIT Sloan Management Review, despite the economic and commercial importance of olfaction, there are no robust tools to detect, measure, and manage smells in a scientific manner. This is now changing with the emergence of two branches of digital olfaction technology: one focused on the digital detection and analysis of different odors, and the other on the digital transmissions and re-creation of smells. These technologies could alter a range  of industries, from fragrances and food to the environmental and healthcare sectors.

The technology draws on several scientific disciplines., including organic chemistry, silicon engineering, machine learning, data science, photonics, and software engineering. A company. Aryballe (, based in France, uses tiny proteins called peptides grafted into silicon wafers that react to the gas molecules associated with different odors. The various digital signatures are then decoded using machine learning and expressed in the terms that humans use to  describe smells; woody, floral, fragrant, smoky, and so on.

Another company, Aromyx (, based in California in the US, uses the same receptors that are found in the human nose and tongue to identify different odors.

Applications of olfactory detection

The olfaction technology would be able to enhance products’ appeal to consumers. It will also support a variety of uses for improved product quality, as well as human health and safety, in areas as diverse as food, auto maintenance, healthcare, and the environment.

These applications include the following:

Faster and cheaper quality control

Digital olfaction is starting to transform quality control, traditionally a labor-intensive and somewhat subjective activity for many industries. In the fragrance industry, for example, traditionally, teams of  highly trained human testers have to assess the quality of different product batches, but the process is time-consuming and ultimately subjective. Aryballe is using digital olfaction to test different fragrances against a “god standard” for the particular scent. The company noted that a fragrance will usually change as it is exposed to the air or to different conditions. By using digital olfaction, it can track how the perfume changes over time as it is exposed to different kinds of skin types, sweat, air conditions, and so on. Based on this analysis., the company helps to create completely new fragrances that have the desired qualities perceived by consumers.

Digital olfaction can also be used to identify minute variations in the quality of food products and detect pathogens that could endanger human health or lead to foods spoilage during supply chain transport. Digital olfaction can greatly aid the search for better and healthier foods.

Adjusting to regional or local tastes.

Many retailers and manufacturers recognize scent as an important factor influencing the consumer appeal of a product, but the consumer-scent relationship varies significantly by region and country, making it difficult to calibrate and measure. Take the automotive industry, for example. It is well- known that new-car smell influences our decision to purchase, but there are strong regional differences. While the aromas of leather, resins, and plastics tend to captivate Europeans and American car buyers, it is a turnoff in Asia, where consumers prefer a more neutral odor. Digital olfaction can help optimize the new-car aroma for different market and car-makes.

Predictive maintenance

Digital olfaction can be used in a range of industries to detect problems before they become apparent, improving safety and reducing the risk of costly unscheduled repairs. In industrial sectors, olfactory technologies can alert people the presence or buildup of dangerous gases in chemical plants or petroleum refineries.

Early diagnosis and prevention in healthcare

We humans have long believed that our olfactory senses provide important clue to our well-being, both physical and mental. Ancient physicians used to smell a sick person’s breath to identify his/her  illness. More recently, research has established that canines can detect the early presence of diseases such as lung cancer via breath and urine. Electronic noses have been shown to be around 96 per cent accurate in detecting lung cancer in patients. A good news is that recent research has suggested that digital olfaction could provide  a quick and a safe test for the detection of Covid-19.

These developments open up the exciting prospects of low-cost, non-invasive technology to screen for a wide range of diseases and viruses, particularly those that are hard to detect with conventional early-stage screening.  An application could be that of a mask that automatically lights up when coming in contact with the coronavirus.

Reducing environmental impacts

Companies and government agencies spend billions of US dollars every year to control or eliminate noxious odors in the environment. Digital olfaction makes it possible to detect, monitor, and reduce emissions at lower cost. Bio-electronic noses can identify harmful pollutants in factories or urban areas, assess water quality, measure soil contamination, check for chemical or hazardous materials in warehouses and harbours.

The next article will be on digital transmission of scents

Reference: Mark Purdy, Max Klymenko and Mia Purdy. Business scents: the rise of digital olfaction. MIT Sloan Management Review  Summer 2021, Volume 62 (4).

World Unique Innovation

Good news for needle-phobics all over the world

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There are many needle-phobics

The rapid Covid-19 vaccination drive in Malaysia has highlighted that there are a big group of Malaysians who have fear of needles being injected into their arms. Many would be recipients of vaccines missed their appointments. Others have high blood  pressure before receiving their vaccines. One of these needle-phobics is my wife. Fortunately, she had received both Covid-19 jabs after a doctor gave her a medication to calm her down before her injection.

Now there is good news for these needle-phobics. An article in the London Guardian on August 2nd, 2021, reported that people would be able to be vaccinated without using the dreaded needles.         

The sight of a needle piercing skin is enough to put a fear on a quarter of adult Britons and trigger up to 4% into fainting. But hope is on the horizon for needle-phobics as researchers are working on a range of non-injectable Covid vaccine formulations, including nasal sprays and tablets.

Almost every vaccine in use today comes with a needle, and the approved Covid-19 vaccines are no exception. Once jabbed, the body’s immune system usually mounts a response, but scientists in the UK and beyond are hoping to harness the immune arsenal of the mucous membranes that line the nose, mouth, lungs and digestive tract, regions typically colonised by respiratory viruses including Covid-19, in part to allay the fears of needle-phobics.

To understand the role this anxiety may be playing in vaccine hesitancy in the UK and other parts of the world, Daniel Freeman, a professor of clinical psychology at the University of Oxford, and colleagues recruited more than 15,000 adults – representative of age, gender, ethnicity, income and region of the UK population – in a study and found that a quarter of the group screened positive for a potential injection phobia.

Notably, this subset of people were twice as likely to report that they would put off getting vaccinated or indeed never get the jab. Out of the total number of those fearful of needles, 10% were found to be strongly Covid vaccine-hesitant.

Probably about 3% to 4% of the UK’s total adult population were needle-phobic (have an intense fear of medical procedures involving injections), he said. And the fear of needles was more prevalent in younger adults, he added. “So, potentially, needle phobia explains more of the hesitancy in younger people.”

“The fear of needles is the one type of anxiety where actually you can faint and that sort of fear and sometimes the embarrassment about fainting is a powerful driver that people want to avoid.”

This avoidance, among other reasons, has spawned efforts to develop Covid-19 vaccines in the form of inhaled vapours, tablets, oral drops or intranasal sprays.

Dr Stephen Griffin, a virologist at Leeds University, said he was constantly asked by UK healthcare staff when there would be non-injectable formulations of Covid vaccines – not just for patients, “but because there are so many needle-phobic staff”.

Non-injectable vaccines could be gamechangers for many other reasons. Room-temperature formulations could be a boon for countries that don’t have the logistical resources to handle the ultra-cold requirements of existing Covid vaccines. Crucially, targeting mucosal tissues has the potential to produce “sterilising immunity”, or the complete elimination of infection in the body, thereby theoretically thwarting transmission. Current intramuscular vaccines, though dramatically effective in preventing serious illness and death, cannot stop transmission altogether.

But there have been hiccups in the quest for non-injectable vaccines – for instance, an existing nasal spray flu vaccine has been shown to outperform flu shots in young children, but its performance is muted in adults. And in June, the US biotech company Altimmune abandoned its intranasal Covid vaccine project, saying that it generated weaker than expected immune responses in an early trial.

At the moment, there are many researchers in the early stages of developing a non-injectable Covid vaccine. An Oxford/AstraZeneca aerosolised formulation is in development, and the Chinese biotech company CanSino Biologics recently kicked off the development of its inhaled vaccine. Others looking at nasal sprays include a team at Lancaster University, which is expected to report data from animal trials imminently, as well as the US-based Cadogenix and India’s Bharat Biotech. Drugmakers are also looking at oral alternatives, such as the San Francisco-based Vaxart, which has completed an early human study on its tablet.

My wife told me that many of her friends have refused to be vaccinated for Covid-19 due to their fear of needles and other many reasons. Hopefully, they will protect themselves and others from Covid-19 infections if needleless vaccination is available.    

World Unique Innovation

Let us harvest the power of the sun: the pioneers of PV solar technology

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Solar flood light and solar panel

Every day I use solar flood lights to deter wild monkeys from feasting on my ripe rambutans. Hopefully, the flood lights will also deter unwanted strangers from stealing the ripe rambutans. I recharge the solar flood lights using solar panels.

Many are interested to know who invented the solar panels that let us to harvest the sunlight and to be stored in the batteries of the solar flood lights. I purchase the solar flood light from an ecommerce platform at about US$50 a unit. 

Solar panels have experienced rapid reduction in prices thanks to a combination of Chinese  industrial might backed by American capital, financed by European political supports and made possible largely thanks to the pioneering work of an Australian research team.

The solar power history begins with a succession of US presidents and the quest for energy independence. First was Richard Nixon, who in November r 1973 announced Project Independence to wean the US off Middle Eastern oil. Then came Jimmy Carter, who declared the energy transition the “moral equivalent of war” in April 1977 and pumped billion of US dollars inro renewable energy research, which stopped when Ronald Reagan came to power.

By then, Australia took the interest on solar power.

The father of photovoltaic (PV) solar technology: Professor Green

The solar cell was invented when Russel Shoemaker Ohl, a researcher at Bell Labs in the US, noticed   in 1940 that a cracked silicon sample produced a current  when exposed to light. However, little improvement had been made until the contribution of Martin Green, a young engineering professor working out of the University of New South Wales, Australia.

Born in Brisbane, Queensland, Australia, Green had spent some time in Canada as a researcher before going back to Australia in 1974. A year later he had started a PV solar research group working out of a small laboratory built with unwanted equipment sourced from major American firms.    

His first experiments, alongside a single  PhD student, involved looking for ways to increase the voltage on early solar cells.

Professor Green, an important pioneer of the PV industry ,

Not long after, Green and his team began to raise their ambitions.. Having boosted the voltage, the next step was building better quality cells. The early efforts broke the world efficiency record in 1983. The team continued to achieve efficiency records in the next 38 years.

In the very early years of the PV industry, the received wisdom had been that a 20 per cent conversion rate marked the hard limit of what was possible from PV solar cells. Green, however, disagreed in a paper published in 1984. A year later, his team built the first cell that pushed past that limit, and in 1989 built the first solar panel capable of running at 20 per cent efficiency.

It was a moment that opened what was possible from the industry, and the new upper limit was set at “25 per cent”—another barrier Green and his team would smash in 2008. In 2015, they built the world’s most efficient solar cell, achieving a 40.6 per cent conversion ion rate using focused light reflected off a mirror.    

Enter the sun king

Out of this activity, the Chinse solar industry would be born largely thanks to a ambitious physicist named Zhengrong Shi. Born in 1963, Shi had earned his master’s degree and come to Australu in 1988. He had spotted a flyer advertising a research fellowship and talked to Green into bringing him as a PhD student in 1989. Shi would finish his PhD in just two and half years. He stayed on a as a researcher.

Dr Shi, who kick-started the Chinese PV solar industry

With time, the university was increasingly looking to commercialize its world leading solar cell technology and reached a partnership agreement with t Pacific Power, an Australian power generator in 1995. The Pacific Power invested US$47 million into a new company called Pacific Solar. A factory was set up in the Sydney suburb of Botany and Shi was made the deputy director of  research and development.

Shi worked in the company for a few years. In November 2000, he was made an offer. At a dinner held at his home , four officials from the Chinese province of Jiangsu suggested the 37-yaer-ol researcher and Australian citizen return to China  and build his  own factory there. After some consideration, Shi agreed and ended settling in the small city of Wuxi where he founded SunTech with US46 million in start-up funding from the municipal government.  

Shi’s arrival caused a stir in China. The ability to cheaply build conventional solar panels  with 17 percent efficiency was far beyond what his competitors  were capable off. Shi was quoted; “The first reaction was: that’s the future. Everybody said that’s the future. But they also said it was one step too early. What they meant was that there was no market for it yet. In China, at that time, if you mentioned solar, people thought of solar hot water”.

All that change when Germany passed new laws encouraging the uptake of solar power. Quickly it became clear there was a massive global demand and the world’s manufacturers were struggling to keep up with supply.

Spying an opportunity for investment, a consortium that included Actis Capital and Goldman Sachs  came knocking to pitch Shi on taking the company public. When the company listed on the New York Stock Exchange in 2005, it raised US$420 million and made Shi an instant billionaire. A year later he would be worth an estimated US$3 billion and crowned the richest man in China, earning him the moniker “the Sun King”.

As Shi had shown the way, the Chinese PV solar industry began a massive expansion. SunTech alone boosted its production capacity from 60 megawatts (MW) to 500MV, and then 1 gigawatt in 2009. The company grew so fast, its supplies of glass, polysilicon and electronic systems needed to build its panels came under strain, forcing it to invest heavily in local supply chains.

Around 2012 the world market was flooded with solar panels, sending the price plummeting through the floor, leaving SunTech vulnerable. Already under intense financial pressure, disaster struck when an internal investigation found a takeover bid it had launched had been guaranteed by Euro560 million in fake German government bonds. Upon discovering the bonds didn’t exist, Shi was removed as CEO of his company and a year later SunTech would file for bankruptcy protection when it couldn’t repay US$541 million loan that fell due in March 2013.

Chinese manufacturers dominate the PV solar industry

Between 2008 and 2013, China’s fledgling solar panel industry dropped the world’s prices by 80 per cent, a stunning achievement in a fiercely competitive high technology market. Today, the PV solar industry is worth US$100 billion a year.

As a result, China has eclipsed the leadership of the US solar industry, which invented the technology, still holds many of the worlds’ patents and led that industry for more than three decades. Now China dominates nearly all aspects of solar use and manufacturing.

I can now buy Chinese solar flood lights at cheap prices to light my garden at night. Thank you Professor Green and Dr Shi for your pioneering works on  the PV solar technology.


Royce Kurmelovs. Insanely cheap energy: how solr power continues to shock the world.  The Guardian, April 24th, 2021.

John Fialka. Why China is dominating the solar industry. Scientific American, December 19th, 2016.


The Language of Crypto Traders

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Shiba inu, the latest most popular crypto coin created in August 2020

Crypto currencies, especially bitcoins and ethereum, have been in many people’s minds. The prices of bitcoin has been on fluctuating widely. This phenomenon is logical. The more people want something, the more value you can attach to it. It is supply and demand, which is the oldest rule in thew economics textbook. But when everyone wants something because some people on Reddit say they want it, that is when you get the sort of price fluctuations that would make a Venezuelan finance minister smiles widely.  

Crypto currency operates through a decentralized peer-to-peer transaction, a way for people to lend, borrow and spend without using traditional banks or money, up the revolution, boo the central banks and al that.

The idea that any old former Microsoft/Google/Apple employees or other IT geeks can just invent their own digital money and convince other people to buy it is rather baffling.  As of last month, it is reported there were more than 4,000 cryptocurrencies, each with their own fan clubs promising high returns.       

New cryptocurrencies or tokens such as dogecoin and Siba inu token are attracting the attention of crypto  traders. The crypto traders have developed their own language. Among the popular terms are:


Fer of missing out.


Fear, uncertainty and doubt


Hold on for dear life


Any crypto coin that is not bitcoin


As in, we are going to be millionaires. When a coin rises sharply, it is said to be mooning.


Theoretically less volatile coin tied to something tangible such as the US dollar.


An investor with enough crypto to manipulate the price with large transactions.


Understanding Covid herd immunity

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This week I had two close relatives succumbed to Covid in less than 5 days of being tested positive. In Malaysia, this week also witnessed a high infection rate of over 7,000 daily and a death rate of over 100 patients.

Other countries, such as Britain, are considering lifting restrictions. In the country, three milestones were announced last week in Britain’s bid to beat the coronavirus: zero Covid deaths were reported on Tuesday, three-quarters of adults had received a first dose by Wednesday, and half of all adults had been fully jabbed by Thursday.

Yet, at the same time, doubts are increasing among scientists and politicians that the remaining social restrictions should end as scheduled on June 21st, so-called Freedom Day. So why, with vaccination going so well, are we still in a pandemic? The answer, as ever, lies in the numbers.

New variant, new danger
Britain’s current rules on social distancing, combined with immunity in the population, might have been enough to control the original virus and even the more infectious Kent variant. Unfortunately, the Indian variant appears to be up to 70 per cent more infectious. This means it “out-competed” the Kent variant to become the dominant strain in Britain, which is why the weekly growth rate in Covid cases has risen in the past seven days from 13 per cent on May 22 to 35 per cent on May 29 with more than 4,000 cases a day.

Herd immunity is further away
The goal of British governments wrestling with a pandemic is “herd immunity”, where so many people have protection the virus has nowhere to go. The safest way to get there is through vaccination.

Under the original Wuhan strain, one infected person passed it to three others: scientists say it had a natural R value of 3. If two out of those three people, or 67 per cent, are vaccinated or become immune through infection, the virus stops growing. This is called the “herd immunity threshold”.

The Kent variant was a third more transmissible, meaning one person gave it to four others. If the Indian variant is 50 per cent more transmissible again, one infected person would infect six others.

This means five out of six people, about 83 per cent, would need to be protected through vaccines or prior infection if we want the virus to die out. Britain is  getting closer: the Office for National Statistics thinks that about 75 per cent of adults now have Covid antibodies. But because just 79 per cent of people are adults, we may need to vaccinate teenagers to reach population immunity. That is now firmly on the government’s agenda after the Pfizer vaccine was approved for children on Friday.

The race to double-jab
Last week the British government celebrated vaccinating almost 40 million people with one dose, that’s 75 per cent of adults, or about 60 per cent of the UK population.

However, a Public Health England report on May 22 suggested that one dose may only be 33 per cent effective against the Indian variant after three weeks.

Getting two vaccine doses is vital. Only 40 per cent of the UK population has been double-jabbed, leaving some 40 million people with a degree of vulnerability.

The good news is that protection after two doses does seem to be enough to ward off any variants. In another Public Health England report, on Thursday, just 3.8 per cent of Indian variant cases were among twice-vaccinated people. This could have a significant effect on unlocking society.

Young spreaders
The UK rightly prioritised older people because they were at greater risk of death or needing hospital treatment. However, adults under the age of 40 account for 39 per cent of Covid cases even though they make up only 29 per cent of the population, mainly because they are more likely to mix socially.

So far less than half of adults under 40 have received a first dose and less than 20 per cent are fully vaccinated. Getting vaccines to more people in this group bracket this month will help reduce Covid transmission. Immunity, though, takes a few weeks to build up: we will not see the effect until July.

Why do rising infections matter?
Even though most vulnerable people are protected, a more transmissible virus means more people will need hospital treatment.

About 98 per cent of Covid deaths occur in people aged over 50: 700,000 of them have not been vaccinated and these people threaten to put pressure on Britain’s National Health Service (NHS).

Vaccines are not 100 per cent effective at stopping hospitalisation, even after two doses. There is some evidence that the Indian variant has mutated enough to “escape” the protection offered by existing vaccines.

This variant may not only be more transmissible. Last week Public Health England said the risk of hospitalisation could be up to 2.6 times higher than the Kent variant.

Source: The Times London, June 6th, 2021


We would like to dedicate this article to our uncle, Pak Cik Aziz, and our sister- in-law, Norfidah Ahmad. Both passed away so sudden this week due to Covid.    


Now is the time for Bitcoin mining

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Whatsminer M20S is a popular ASIC mining machine

The UK Financial Conduct Authority has noted that some young people are taking big risks by putting money into cryptocurrencies (Bitcoin), foreign exchange and other volatile investments. It warned recently that “some investors are being tempted into buying higher-risk products that are very unlikely to be suitable for them”.

Bitcoin )BTC) is the most prominent of the private cryptocurrencies. Its price rose 300 per cent in 2020 and, though it has since fallen, it almost doubled again in this quarter. For most investments, popular enthusiasm would normally be taken as a sign to sell. Bitcoin doesn’t even meet that criterion, however, because there is no time and no price at which it should be bought in the first place. The optimal amount of Bitcoin in an efficient portfolio is always zero.

Why? Because while it certainly has a market price, Bitcoin does not have any intrinsic value. It’s not like holding shares, which pay dividends (or notionally could do in future out of today’s retained earnings). Nor bonds, which pay interest (and, even in the recent phenomenon of negative yields, provide diversification benefits). Nor property, which pays a notional rental income.

These genuinely are assets, whose value lies in the future cash they generate for the holder. Bitcoin is pure speculation, where you hope someone else can be persuaded to buy at a higher price. Its adherents maintain that the cap on ultimate supply (which is limited to 21 million Bitcoins by the technology that underpins it) will support prices, but this is not true. It’s like the unfortunate woman who sank her life savings into a painting by Rolf Harris: if there’s no market, it doesn’t matter what the scarcity is.

Despite this warning, the price of 1 BTC is currently hovering at US$56,000. Bitcoin’s innovation lies in its ability to coordinate trust and facilitates the transfer of value without relying on  a centralized authority. The enabler is proof-of-work mining, a mechanism that adds new Bitcoin to the money supply and protects the network against nefarious actors attempting to spend the same Bitcoin more than once.

Through economic incentives, miners voluntarily secure the network by verifying “blocks” of transaction that proves that a miner has executed a costly computation. In exchange for providing the processing power that is critical to the network’s security, miners are rewarded with newly minted Bitcoin and transaction fees. 

The economics of Bitcoin mining

Bitcoin mining (mining) began as a well- paid hobby for early adopters who had the chance to earn 50 Bitcoin every ten minutes, mining from their bedrooms or basements.  Successfully mining just one Bitcoin block, and holding onto it since 2010 would mean the miner has US$450,000 worth of Bitcoin in 2020. This has further increased at the moment when the price of 1 BTC is US$56,000.

Ten year ago, the miner needed a reasonably powerful computer, a stable internet connection and the foresight of Nostradamus. These days, thanks to industrial bitcoin mining operations, it is not such a level playing field and for a lot of people it makes more sense to simply buy some Bitcoin on an exchange like Coinbase.

Mining is the backbone of all proof-of -work blockchains and can be described with three key concepts:

  • Transaction records

The verification and addition of transactions to the public blockchain ledger. This is where every single transaction that has ever occurred in the history of blockchain can be viewed.

  • Proof-of-work calculations

The energy-intensive puzzle that each Bitcoin mining machine solves every ten minutes. The miner that completes the puzzle before anything else adds the new block to the blockchain.

  • Bitcoin block reward

Rewarded with 6.25 Bitcoins. This number will reduce to 6.25 Bitcoins after the halving in May 2020. The reward plus the transaction fees are paid to the miner who solved the puzzle first.  

The process repeats approximately every 10 minutes for every mining machine on the network. The difficulty of the puzzle (network difficulty) adjusts every 2016 blocks (about 14 days) to ensure that on average one machine will solve the puzzle in a  10 minute period. Network difficulty is calculated by the amount of hashrate  contributing to the Bitcoin network.


Hashrate is a measure of a miner’s computational power. In other words, the more miners (and therefore computing power) mining Bitcoin and hoping for  a reward, the harder it becomes to solve the puzzle. It is a computational arms race, where the individuals or organizations with most computing power (hashrate) will be able to mine the most bitcoin.

The more computing power a machine has, the more solutions (and hence, block rewards) a miner is likely to find.

In 2009, hashrate was initially measured in hash per second (H/s). Due to the exponential growth of mining, H/s was soon commonly pre-fixed with the following SI units:

KilohashKH/s (thousands of Hashes per second)
MegahashMH/s (millions of Hashes per second)
GigahashGH/s (billions of Hashes per second)
TerahashTH/s (trillions of Hashes per second)
PetahashPH/s (quadrillions of Hashes per second)

The cost of Bitcoin mining

The underlying cost of Bitcoin mining is the energy consumed. The revenue from Bitcoin mining has to outweigh those costs, plus the original investment into mining hardware, in order to be profitable.

Mining revenue

In 2020, one modern Bitcoin mining machine (commonly known as ASIC), like the Whatsminer M20S, generates around US$8 in Bitcoin revenue every day.  You can think of it as though the miners are a decentralized Paypal, allowing all the transactions to be recorded accurately and making a bit of money for running the subsystem.

Bitcoin miners earn Bitcoin by collecting something called the block reward plus the fees Bitcoin users pay the miners for safety and accurately recording their Bitcoin transactions onto the blockchain.

Roughly every ten minutes a specific number of newly-minted Bitcoin is awarded to the person with a mining machine that is quickest to discover the new block.

Originally, in 2009, Satoshi Nakamoto set the mining reward at 50 BTC, as well as encoding the future reductions to the reward. The Bitcoin code is predetermined to halve this payout roughly every four years. It was reduced to 25 BTC in late-2012, and halved again to 12.5 BTC in the middle of 2016. Most recently, in May 2020, the third Bitcoin halving reduced the block reward to 6.25 BTC.

The second source of revenue for Bitcoin miners is the transaction fees that Bitcoin susers have to pay when they transfer BTC to one another. This is the beauty of Bitcoin. Every transaction is recorded in an unchangeable blockchain that is copied to every mining machine.

The profitability of Bitcoin mining

Bitcoin mining has a lot of variables. When done efficiently it is possible to end up with more Bitcoin from mining than buying bitcoin on an exchange.

One of the most important variables for miners is the price of Bitcoin itself. If like most people, you are paying for your mining hardware, and your electricity bills, then you need to earn enough Bitcoin from mining to cover your ongoing costs, and make back your original investment into the machine itself.

Bitcoin price impacts all miners. However, there are three factors that separate profitable miners from the rest: cheap electricity, low costs and efficient hardware and a good mining pool.

  • Cheap electricity

Electricity prices vary from country to country. Many countries also charge a lower price for industrial electricity in order to encourage economic growth.

According to, the most expensive household electricity price is in Germany, followed by Denmark whilst the cheapest electricity is in Qatar.

The following shows the electricity prices in the cheapest countries in 2020.

No.CountryElectricity rate (US$ per kwh)
2Saudi Arabia0.05
11South Africa0.13

Based on Bitcoin mining calculator,, mining at the price of 1 BTC of US$56,218.41 on March 28, 2021, the profit per year of Bitcoin mining in the countries with the cheapest electricity is as follows:

No.CountryElectricity rate (US$ per kwh)Profit per year (US$)
2Saudi Arabia0.054,032.23

Bitcoin mining operations, as expected, are concentrated in three countries, namely, US, Russia and China. In China, the Bitcoin miners are located in Sichuan Province due to the cheaper source of electricity and incentives from the local government.  Recently, miners are locating in Iceland and Canada due to cheaper electricity from hydropower.

  • Efficient hardware  

There are several hardware manufacturers to choose from to mine Bitcoins. The price of hardware varies from manufacturer to manufacturer and depends  largely on how low the energy use is for the machine versus the amount of computing power it produces. The more computing power, the more Bitcoin you will mine. The lower the energy consumption, the lower the monthly costs.

When choosing which machine to invest in, miners should think about the machine’s profitability and longevity. Profitability is determined by the machine’s price per TH, how many watts the machine uses per TH, and the hosting costs.  Longevity is determined by the production quality of the machine. It makes no sense to buy cheaper machines  if they break down after a few months of running.

The manufacturer with the lowest failure rate is MicroBT, who make the Whatsminer M20S and other Whatsminer models.

A list of income estimation of ASIC miners is shown the website,, which is updated every minute.

  • Reliable mining pool

These days, every miner needs to mine through a mining pool. Whether you are mining with one machine, or several thousand, the network of Bitcoin mining machines is so large that your chances of regularly finding a block (and therefore earning the block reward and transaction fees) is very low.  Mining pools make mining profitability more consistent and reliable.

The oldest two pools are Slush Pool ( and F2Pool ( F2Pool is now the largest mining pool and they support around 20 per cent of the entire Bitcoin network.

Example of mining pool pay-out method

According to, F2Pool’s method is called PPS+. PPS+ pools take the task away from miners, as they pay out block rewards and transaction fees to miners regardless of whether the pool itself successfully mines each block. Typically PPS+ pools calculate how much to pay out to miners in their pool. An example is shown below.

If the Bitcoin Network Hashrate is at 85 EH/s (85,000,000 TH/s), a Whatsminer M20S ASIC miner with 68 TH/s will earn around 0.000702 BTC per day before pool fees.

0.000702 BTC is calculated by 68 (miner hashrate) divide by 85,000,000 (network hashrate) times 144 (number of blocks per day) time 6.25 (block reward).

Pool fees are normally 2.50 to 4.00 per cent. So let use 2.50 per cent for the example, the net mining revenue is therefore 0.00068445 BTC.

It BTC is priced at US$56,000 (price on March 28th, 2021, than this MS20S has a daily revenue of US$38.33.     

Thomas Hueller, Global Business Director at F2Pool, which was quoted in, suggested that choosing the right mining pool is very important, as you will receive your mined bitcoin sent from the pool pay-outs every day. It is important to choose a pool that is reliable, transparent and offers the right suite of tools and services to help you optimize your mining operations.   

Fees when selling Bitcoin

Another variable of mining profitability is the fees one pays to sell the Bitcoin one mines. If you are a small time miner, you may have to sell the Bitcoins on a retail exchange like kraken or Binance. Sometimes your fees are low but sometimes your fees are high. It depends on the fee structure of the exchange and the state of the orderbook at the moment.

However, if you are a professional miner like F2Pool, you likely have advantageous deals with OTC desks to sell your coins at little or no fees, depending on the state of the market. Some miners are even paid above spot prices for their coins. Either way, professional mining operations deal with Bitcoin at a large scale and they have more leverage to secure deals that are good for them.


It is common knowledge that it has become very difficult for individual miners to get access to the best machines and the cheapest electricity rates. Bitcoin farms that operate at scale use these advantages to maximize their returns.

As the current price of Bitcoin is hovering around US$56,000, the Bitcoin mining industry is enjoying a boom in profits. It is to be noted this mining activity is clean, unlike the conventional commodity mining industry of iron ore and gold.

Source of references

  1. Malcolm Cannon and Jordan Tuwiner at www.
  2. ARK Invest Research. Bitcoin Mining: The evolution of a multibillion dollar Industry
  3. Various other articles