Article
November 27, 2025
Yesterday, I spoke with one of our customers who hosts Bitcoin miners with us in Ethiopia, Norway, and Finland.
We’ve written before about the unique advantages of mining in Norway and why Finland stands out as a mining destination.
Our customer mentioned that the cost-to-revenue ratio of his machines differed significantly between the three locations — a simple but powerful observation.
That single number captures the financial resilience of a mining operation.
In this article, I’ll explain what the cost-to-revenue ratio is, how to calculate it, and why it’s the most important financial risk metric for Bitcoin miners.
The cost-to-revenue ratio (CRR) measures the relationship between your machine’s operating costs and its mining revenue.
It’s calculated as: Cost-to-Revenue Ratio = Daily Cost ÷ Daily Revenue
Understanding your costs is key — see our breakdown of CapEx vs. OpEx in Bitcoin mining.
For example, if your S21 generates $10 in daily revenue and your operating cost (hosting) is $6, then: 6 ÷ 10 = 0.60
That means 60% of your revenue goes toward operating expenses, leaving a 40% gross margin.
The closer this ratio gets to 100%, the closer your miner is to being cash flow negative.
Our customer’s quick comparison clearly showed how differences in hosting rates and machine models shape the cost-to-revenue ratio.
This customer is a diversified miner — a very thoughtful one.
He operates machines in three countries: Ethiopia, Finland, and Norway, and runs three different machine models, giving his fleet both geographical and technical diversification.
Here’s a summary of his fleet:
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The chart below shows how their cost-to-revenue ratios compare.
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We will now explain the findings from the chart country by country.
The Antminer S21 XP hosted in Norway at 0.72 NOK ($0.072) per kWh has the lowest cost-to-revenue ratio of 46%.
That’s impressive — especially given that Norway is one of Hashlabs’ more expensive hosting locations.
The reason? Efficiency.
The S21 XP is an exceptionally efficient machine, generating high revenue relative to its power consumption.
Even though electricity costs more, its energy-to-revenue conversion is so good that the overall ratio remains low.
The WhatsMiner M63S+ in Finland operates at roughly the same USD hosting rate as Norway, yet its cost-to-revenue ratio is higher, around the mid-50s.
That’s because the M63S+ is slightly less efficient than the S21 XP.
Still, Finland remains a strong performer, with high uptime, stability, and a competitive efficiency-to-cost balance.
In Ethiopia, the customer uses the Antminer S19K Pro hosted at $0.059/kWh.
Despite the lowest power price, this setup has the highest cost-to-revenue ratio at 63%.
The reason is straightforward: the S19K Pro, at 23 J/T, is about 70% less efficient than the S21 XP in Norway.
That massive efficiency gap explains why the Ethiopian setup — despite cheap power — ends up with a higher CRR.
However, Ethiopia also offers the shortest potential payback period, since older and less efficient machines like the S19K Pro are much cheaper to acquire.
For a deeper dive into this concept, read How to Use Payback Period to Evaluate Bitcoin Mining Returns.
For miners willing to accept higher financial risk in exchange for faster payback, this can still be an attractive trade-off.
The cost-to-revenue ratio depends on two main factors:
Many misunderstand this relationship — we broke down a similar misconception in The $65K Bitcoin Mining Myth.
To minimize your CRR, you ideally want the most efficient machine at the lowest possible hosting rate.
However, when looking at return on investment — which we often measure by payback period — it’s not always optimal to chase maximum efficiency.
Highly efficient machines are expensive, so their payback periods can be long.
Cheaper, less efficient machines can offer faster payback, but with higher CRRs and greater exposure to market downturns.
The ideal approach is to find a balance between efficiency and cost that fits your risk appetite and investment horizon.
The cost-to-revenue ratio doesn’t capture every risk — it won’t reflect regulatory, counterparty, or operational issues.
But it remains the core financial risk metric for miners, quantifying exactly how far you are from becoming cash flow negative.
Used across industries for decades — from factories to power plants — it’s the simplest and most effective way to measure financial resilience in Bitcoin mining.
To understand the financial side of mining even better, see our pieces on The Role of Debt in the Mining Industry and How Leverage Impacts ASIC Cash Flow.
Profitability comes and goes, but resilience keeps you alive.
Every miner should know their cost-to-revenue ratio — and manage their operation around it.
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