Aug 21, · The profitability of Bitcoin mining comes down to hardware acquisition and running costs; most modern miners are currently net positive in terms of daily yields. Since reaching its lowest value of back in March, the price of Bitcoin (BTC) has been on a meteoric uptrend, with the leading cryptocurrency. Dec 01, · Bitcoin mining began as a well paid hobby for early adopters who had the chance to earn 50 BTC every 10 minutes, mining from their bedrooms. Successfully mining just one Bitcoin block, and holding onto it since would mean you have $, worth of bitcoin in your wallet in Aug 13, · Bitcoin mining revenue with the latest generation hardware ranges anywhere from $70/MWh to north of $/MWh depending on price, global hashrate and difficulty." Time will tell, but Rainey did add, Author: Robert Anzalone.
Mining bitcoin profitableIs Bitcoin mining still profitable in ? - Decrypt
Your Money. Personal Finance. Your Practice. Popular Courses. Part Of. Bitcoin Basics. Bitcoin Mining. How to Store Bitcoin. Bitcoin Exchanges. Bitcoin Advantages and Disadvantages. Bitcoin vs. Other Cryptocurrencies. Bitcoin Value and Price. Cryptocurrency Bitcoin. Key Takeaways Bitcoin is mined using computing rigs which include expensive hardware. Miners are rewarded with bitcoin for verifying blocks of transactions to the blockchain network.
As more miners compete for bitcoin rewards, the process becomes more difficult. To determine whether bitcoin mining is profitable for you, consider costs of equipment and electricity as well as the difficulty associated with mining and how the price of bitcoin will impact potential rewards. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.
We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Related Articles. Bitcoin How Bitcoin Works. Partner Links. Related Terms Bitcoin Mining Definition Breaking down everything you need to know about Bitcoin mining, from blockchain and block rewards to Proof-of-Work and mining pools.
The revenue from mining has to outweigh those costs, plus the original investment into mining hardware, in order to be profitable. If you compare this to the revenue of mining a different crypto currency, like Ethereum, which is mined with graphics cards, you can see that the revenue from Bitcoin mining is twice that of mining with the same amount GPUs you could buy for one ASIC. This graph shows you the daily revenue of mining Bitcoin.
It does not take into account the daily electricity costs of running a mining machine. Your baseline costs will be the difference between mining profitably or losing money. 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 system. Bitcoin miners earn bitcoin by collecting something called the block reward plus the fees bitcoin users pay the miners for safely and securely 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 , 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, and halved again to The second source of revenue for Bitcoin miners is the transaction fees that Bitcoiners 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.
Every miner needs to know the relevant tax laws for Bitcoin mining in his area, which is why it is so important to use a crypto tax software that helps you keep track of everything and make sure you are still making enough money after you account for taxes. First of all, Bitcoin mining has a lot of variables. This is why buying bitcoin on an exchange can be a simpler way to make a profit. However, when done efficiently it is possible to end up with more bitcoin from mining than from simply hodling.
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,- in dollars, then you will need to earn enough bitcoin from mining to cover your ongoing costs; and make back your original investment into the machine itself.
Bitcoin price, naturally, impacts all miners. However, there are three factors that separate profitable miners from the rest: cheap electricity, low cost and efficient hardware and a good mining pool. Electricity prices vary from country to country.
Many countries also charge a lower price for industrial electricity in order to encourage economic growth. This means that a mining farm in Russia will pay half as much for the electricity you would mining at home in the USA. In practical terms. These days there are several hardware manufacturers to choose from. The price of hardware varies from manufacturer to manufacturer and depends largely on how low the energy use is for the machine vs the amount of computing power it produces.
The more computing power, the more bitcoin you will mine. The lower the energy consumption the lower your monthly costs. Longevity is determined by the production quality of the machine. It makes no sense to buy cheaper or seemingly more efficient machines if they break down after a few months of running. One useful way to think about hardware is to consider what price BTC would have to fall to in order for the machines to stop being profitable. You want your machine to stay profitable for several years in order for you to earn more bitcoin from mining than you could have got by simply buying the cryptocurrency itself.
Miners also need to factor in their acquisition costs to determine how long it will take to achieve a full return on their investment.
Mining hardware bought closer to its original launch date at or below RRP will often pay for itself faster than those bought later, or at an inflated price. Since most Bitcoin miners run into the thousands of dollars, it's safe to say that most miners won't achieve a full ROI for several months at the very least—but they may be able to recoup some of their initial costs by selling the used miner on when purchasing newer equipment.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice. Read on the Decrypt App for the best experience. For the best experience, top crypto news at your fingertips and exclusive features download now. News Business. By Daniel Phillips 4 min read. In brief Bitcoin has more than doubled in value since March, but halving rewards have also been cut in half.