Imagine a graph where the x-axis represents the size of your mining farm (from small to big), and the y-axis the percentage of the mining income spent on operating costs.
For small values of X the curve is close to zero. As we move to the left the curve suddenly jumps, and then decreases and decreases but without ever coming back close to zero.
This illustrates my point: small miners have operating costs close to zero, above a certain size you suddenly start needing to spend quite a bit on operating costs (first rack, first A/C unit, etc), and as you scale up and up yes there is some amount of economy of scale, but never enough to reduce your operating costs close to zero.
I say "economies of scale do not exist" but what I mean more precisely is that they are not sufficient to cause big miners to push small miners out of the market.
For small values of X the curve is close to zero. As we move to the left the curve suddenly jumps, and then decreases and decreases but without ever coming back close to zero.
This illustrates my point: small miners have operating costs close to zero, above a certain size you suddenly start needing to spend quite a bit on operating costs (first rack, first A/C unit, etc), and as you scale up and up yes there is some amount of economy of scale, but never enough to reduce your operating costs close to zero.
I say "economies of scale do not exist" but what I mean more precisely is that they are not sufficient to cause big miners to push small miners out of the market.