Definition ∞ Mining margin represents the difference between the revenue generated from cryptocurrency mining and the total costs associated with those operations. Revenue primarily comes from block rewards and transaction fees, while costs include electricity, hardware depreciation, and facility overhead. A positive mining margin indicates profitability, whereas a negative margin suggests operations are running at a loss. This metric is central to the economic viability of mining.
Context ∞ News reports frequently analyze mining margins to assess the health and sustainability of the cryptocurrency mining industry. Fluctuations in mining margin, driven by changes in coin price, network difficulty, or electricity costs, directly impact miners’ operational decisions. A shrinking margin can lead to miners selling off assets or shutting down operations, influencing market supply and network hashrate.
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