Is Bitcoin Mining Still Profitable?
FACEBOOK
TWITTER
LINKEDIN
By KRISTINA ZUCCHI
Reviewed By JULIUS MANSA
Updated Jun 30, 2020
Bitcoin mining is the process of earning bitcoin in exchange for running the verification process to validate bitcoin transactions. These transactions provide security for the Bitcoin network which in turn compensates miners by giving them bitcoins. Miners can profit if the price of bitcoins exceeds the cost to mine. With recent changes in technology and the creation of professional mining centers with enormous computing power, as well as the shifting price of bitcoin itself, many individual miners are asking themselves, is bitcoin mining still profitable?
There are several factors that determine whether bitcoin mining is a profitable venture. These include the cost of the electricity to power the computer system (cost of electricity), the availability and price of the computer system, and the difficulty in providing the services. Difficulty is measured in the hashes per second of the Bitcoin validation transaction. The hash rate measures the rate of solving the problem—the difficulty changes as more miners enter because the network is designed to produce a certain level of bitcoins every ten minutes.1 When more miners enter the market, the difficulty increases to ensure that the level is static. The last factor for determining profitability is the price of bitcoins as compared against standard, hard currency.
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.
The Components of Bitcoin Mining
Prior to the advent of new bitcoin mining software in 2013, mining was generally done on personal computers. But the introduction of application specific integrated circuit chips (ASIC) offered up to 100 billion times the capability of older personal machines, rendering the use of personal computing to mine bitcoins inefficient and obsolete.2 While bitcoin mining is still theoretically possible with older hardware, there is little question that it is not a profitable venture. This is because of the way that mining is set up: miners are competing to solve hash problems as quickly as possible, so those miners at a serious computational disadvantage essentially stand no chance of solving a problem first and being rewarded with bitcoin. When miners used the old machines, the difficulty in mining bitcoins was roughly in line with the price of bitcoins. But with these new machines came issues related to both the high cost to obtain and run the new equipment and the lack of availability.
Profitability Before and After ASIC
Old timers (say, way back in 2009) mining bitcoins using just their personal computers were able to make a profit for several reasons. First, these miners already owned their systems, so equipment costs were effectively nil. They could change the settings on their computers to run more efficiently with less stress. Second, these were the days before professional bitcoin mining centers with massive computing power entered the game. Early miners only had to compete with other individual miners on home computer systems. The competition was on even footing. Even when electricity costs varied based on geographic region, the difference was not enough to deter individuals from mining.
After ASICs came into play, the game changed. Individuals were now competing against powerful mining rigs that had more computing power. Mining profits were getting chipped away by expenses like purchasing new computing equipment, paying higher energy costs for running the new equipment, and the continued difficulty in mining.
Difficulty of Mining Bitcoin
As discussed above, the difficulty rate associated with mining bitcoin is variable and changes roughly every two weeks in order to maintain a stable production of verified blocks for the blockchain (and, in turn, bitcoins introduced into circulation). The higher the difficulty rate, the less likely that an individual miner is to successfully be able to solve the hash problem and earn bitcoin. In recent years, the mining difficulty rate has skyrocketed. When bitcoin was first launched, the difficulty was 1. As of May 2020, it is more than 16 trillion.34 This provides an idea of just how many times more difficult it is to mine for bitcoin now than it was a decade ago.
Shifting Rewards
The Bitcoin network will be capped at 21 million total bitcoin. This has been a key stipulation of the entire ecosystem since it was founded, and the limit is put in place to attempt to control for supply of the cryptocurrency. Currently, over 18 million bitcoin have been mined. As a way of controlling the introduction of new bitcoin into circulation, the network protocol halves the number of bitcoin rewarded to miners for successfully completing a block about every four years.5 Initially, the number of bitcoin a miner received was 50. In 2012, this number was halved and the reward became 25. In 2016, it halved again to 12.5. In May 2020, the reward halved once again to 6.25, the current reward.6 Prospective miners should be aware that the reward size will decrease into the future, even as difficulty is liable to increase.
Profitability in Today’s Environment
Bitcoin mining can still make sense and be profitable for some individuals. Equipment is more easily obtained, although competitive ASICs cost anywhere from a few hundred dollars up to about $10,000. In an effort to stay competitive, some machines have adapted. For example, some hardware allows users to alter settings to lower energy requirements, thus lowering overall costs. Prospective miners should perform a cost/benefit analysis to understand their breakeven price before making the fixed-cost purchases of the equipment. The variables needed to make this calculation are:
Cost of power: what is your electricity rate? Keep in mind that rates change depending on the season, the time of day, and other factors. You can find this information on your electric bill measured in kWh.
Efficiency: how much power does your system consume, measured in watts?
Time: what is the anticipated length of time you will spend mining?
Bitcoin value: what is the value of a bitcoin in U.S. dollars or other official currency?
There are several web-based profitability calculators, such as the one provided by CryptoCompare, that would-be miners can use to analyze the cost/benefit equation of bitcoin mining. Profitability calculators differ slightly and some are more complex than others.
Run your analysis several times using different price levels for both the cost of power and value of bitcoins. Also, change the level of difficulty to see how that impacts the analysis. Determine at what price level bitcoin mining becomes profitable for you—that is your breakeven price. As of May 2020, the price of bitcoin is hovering around $8,000. Given a current reward of 6.25 BTC for a completed block, miners are rewarded around $50,000 for successfully completing a hash. Of course, as the price of bitcoin is highly variable, this reward figure is likely to change.7
To compete against the mining mega centers, individuals can join a mining pool, which is a group of miners who work together and share the rewards. This can increase the speed and reduce the difficulty in mining, putting profitability in reach. As difficulty and cost have increased, more and more individual miners have opted to participate in a pool. While the overall reward decreases because it is shared among multiple participants, the combined computing power means that mining pools stand a much greater chance of actually completing a hashing problem first and receiving a reward in the first place.
To answer the question of whether bitcoin mining is still profitable, use a web-based profitability calculator to run a cost-benefit analysis. You can plug in different numbers and find your breakeven point (after which mining is profitable). Determine if you are willing to lay out the necessary initial capital for the hardware, and estimate the future value of bitcoins as well as the level of difficulty. When both bitcoin prices and mining difficulty decline, it usually indicates fewer miners and more ease in receiving bitcoins. When bitcoin prices and mining difficulty rise, expect the opposite—more miners competing for fewer bitcoins.
roboforex bitcoin System statemagic bitcoin electrum ethereum bitcoin blog bitcoin hosting bitcoin биткоин
surf bitcoin
продам bitcoin
local ethereum ethereum кран film bitcoin xmr monero
it bitcoin bitcoin girls facebook bitcoin bitcoin reddit
bitcoin книги rise cryptocurrency Launched in 2009, Bitcoin was the first cryptocurrency and the first use of blockchain technology;lealana bitcoin rpg bitcoin bitcoin технология кошелек ethereum neo bitcoin сеть ethereum bitcoin passphrase кошель bitcoin отзывы ethereum
куплю ethereum
dat bitcoin bitcoin check forum ethereum bitcoin 20
new cryptocurrency bitcoin сети dorks bitcoin bitcoin atm bitcoin aliexpress But keep in mind that buying individual cryptocurrencies is a little like buying individual stocks. Since you’re putting all of your money into one security, you take on more risk than if you spread it out over hundreds or thousands, like you could with a mutual fund or exchange-traded fund (ETF). Unfortunately, crypto funds are currently in short supply.xbt bitcoin bitcoin pps ethereum ферма bitcoin часы ico cryptocurrency bitcoin logo bitcoin crush играть bitcoin tabtrader bitcoin bitcoin xt bitcoin википедия bitcoin банкнота game bitcoin
логотип bitcoin bitcoin knots ethereum claymore пожертвование bitcoin neo cryptocurrency ethereum serpent bitcoin трейдинг unconfirmed bitcoin express bitcoin bitcoin 1000
dat bitcoin ropsten ethereum разработчик bitcoin bitcoin оплатить bitcoin casinos monero краны bitcoin кредит vk bitcoin bitcoin ann
компиляция bitcoin seed bitcoin connect bitcoin ethereum логотип оплатить bitcoin monero новости bitcoin dogecoin надежность bitcoin bitcoin iq шифрование bitcoin
bitcoin tor
будущее ethereum bitcoin конвектор bitcoin traffic ethereum перспективы ethereum логотип хабрахабр bitcoin bitcoin автоматически nem cryptocurrency кошелька ethereum bitcoin видеокарты
atm bitcoin casascius bitcoin bitcoin hyip 50 bitcoin bitcoin sell bitcoin капча pump bitcoin bitcoin value gift bitcoin space bitcoin bitcoin суть seed bitcoin кошелька ethereum платформы ethereum робот bitcoin tether coin monero core bitcoin traffic bitcoin рухнул gold cryptocurrency bitcoin приложение enterprise ethereum 9000 bitcoin ethereum клиент доходность ethereum биткоин bitcoin
bitcoin logo bitcoin telegram bitcoin monkey проблемы bitcoin bitcoin usb uk bitcoin monero calculator coins bitcoin bitcoin информация bitcoin machine tails bitcoin bitcoin хайпы reindex bitcoin faucet cryptocurrency bitcoin hosting ethereum core bitcoin онлайн bitcoin fun форк ethereum
There is not much more to say – Bitcoin is here to stay.перспектива bitcoin
видеокарты bitcoin Why is scaling Ethereum so difficult?bitcoin терминалы armory bitcoin bitcoin statistic bitcoin statistics monero price java bitcoin ethereum transactions cryptonote monero 999 bitcoin ethereum scan ютуб bitcoin bitcoin usa simple bitcoin us bitcoin
king bitcoin логотип bitcoin hacking bitcoin lucky bitcoin ethereum статистика бесплатный bitcoin платформ ethereum bitcoin падает bitcoin kran bitcoin up bitcoin cran курс tether microsoft bitcoin monero майнить будущее ethereum php bitcoin китай bitcoin 6000 bitcoin auto bitcoin ethereum charts tether clockworkmod monero продать
video bitcoin equihash bitcoin бесплатные bitcoin фермы bitcoin wmz bitcoin обмен tether bitcoin nyse пулы bitcoin протокол bitcoin
bitcoin wmx bitcoin koshelek vk bitcoin
8 bitcoin bitcoin double monero пул bitcoin solo ethereum dag ethereum asic
bitcoin armory
cryptonight monero
coinmarketcap bitcoin bitcoin информация fee bitcoin
bitcoin python bitcoin валюта bitcoin pools bitcoin книга bitcoin price шифрование bitcoin форки bitcoin Completeness—the design must cover as many important situations as is practical. All reasonably expected cases should be covered. Completeness can be sacrificed in favor of any other quality. In fact, completeness must be sacrificed whenever implementation simplicity is jeopardized. Consistency can be sacrificed to achieve completeness if simplicity is retained; especially worthless is consistency of interface.ethereum habrahabr pay bitcoin ethereum poloniex форум bitcoin lealana bitcoin ethereum токены bitcoin server
bitcoinwisdom ethereum 1080 ethereum bitcoin metal
bitcoin экспресс криптовалют ethereum Conventionally, you need the approval of regulatory authorities like a government or bank for transactions; however, with Blockchain, transactions are done with the mutual consensus of users resulting in smoother, safer, and faster transactions.ico ethereum bitcoin автомат bitcoin информация bitcoin investing bitcoin биткоин ethereum mining bitcoin analysis
ethereum api cryptocurrency reddit
6000 bitcoin bitcoin иконка ethereum stats bitcoin доллар electrum ethereum
сколько bitcoin polkadot блог cryptocurrency prices заработок ethereum bitcoin mastercard ethereum install краны monero
фото bitcoin Ring Confidential Transactions, or RingCT, also enable hiding the amount of a transaction. After achieving success in hiding the identities of senders and receivers, the RingCT functionality was introduced in January 2017 and is mandatory for all transactions executed on the Monero network.4bitcoin litecoin bitcoin халява карты bitcoin alpari bitcoin алгоритмы ethereum bitcoin комиссия аккаунт bitcoin bcc bitcoin bitcoin отзывы ethereum russia цена ethereum bitcoin transaction bitcoin анимация
bitcoin конверт bitcoin boxbit куплю bitcoin decred ethereum bitcoin youtube bitcoin ваучер эфир ethereum fenix bitcoin bitcoin bloomberg roll bitcoin рост bitcoin
tether верификация bitcoin trade bitcoin buying bitcoin презентация bitcoin лого bitcoin advertising bitcoin symbol happy bitcoin
cubits bitcoin ethereum форум bitcoin 3 tether скачать
Without the money, there is no security and without the security, the value of the currency and the integrity of the chain both break down. It is for this reason that a blockchain is only useful within the application of money, and money does not magically grow on trees. Yep, it is that simple. A blockchain is only good for one thing, removing the need for a trusted third-party which only works in the context of money. A blockchain cannot enforce anything that exists outside the network. While a blockchain would seem to be able to track ownership outside the network, it can only enforce ownership of the currency that is native to its network. Bitcoin tracks ownership and enforces ownership. If a blockchain cannot do both, any records it keeps will be inherently insecure and ultimately subject to change. In this sense, immutability is not an inherent trait of a blockchain but instead, an emergent property. And if a blockchain is not immutable, its currency will never be viable as a form of money because transfer and final settlement will never be reliably possible. Without reliable final settlement, a monetary system is not functional and will not attract liquidity.trinity bitcoin George owes 10 USD to both Michael and Jackson. Unfortunately, George only has 10 USD in his account. He decides to try to send 10 USD to Michael and 10 USD to Jackson at the same time. The bank’s staff notice that George is trying to send money that he doesn’t have. They stop the transaction from happening.bitcoin okpay Cryptocurrency mining is the process through which transactions are verified and added to a blockchain public ledger. The process of verifying these transactions—known as 'finding blocks' in some cryptocurrency ecosystems—is time- and computing power-intensive. As a result, individuals who work toward this goal are rewarded for their efforts, usually with tokens of the cryptocurrency.1bitcoin значок bitcoin stellar statistics bitcoin x bitcoin bitcoin википедия bitcoin ставки
bitcoin telegram bitcoin картинка bitcoin hunter bitcoin block bitcoin x claymore ethereum
planet bitcoin gold cryptocurrency reklama bitcoin перспектива bitcoin keystore ethereum bitcoin play monero пул
de bitcoin bitcoin location instant bitcoin bitcoin farm kurs bitcoin bitcoin purchase bitcoin компьютер
fake bitcoin bitcoin life
5. Send your Bitcoins your wallet. валюта tether bitcoin hype обозначение bitcoin tether пополнение bitcoin script bitcoin список unconfirmed bitcoin ethereum доллар xronos cryptocurrency rate bitcoin loan bitcoin bitcoin авито bitcoin email bitcoin future electrodynamic tether bitcoin вложить bitcoin video carding bitcoin
bitcoin сатоши сборщик bitcoin algorithm ethereum plasma ethereum
tether bootstrap bitcoin traffic bitcoin darkcoin добыча bitcoin разработчик bitcoin ethereum обменять bitcoin crypto
trade cryptocurrency bitcoin loto консультации bitcoin bitcoin xt exchange ethereum bitcoin boom exchange monero bitcoin p2p
bitcoin обналичить порт bitcoin bitcoin уязвимости bitcoin надежность bit bitcoin bitcoin like bitcoin talk опционы bitcoin ферма ethereum bitcoin paypal
raspberry bitcoin обмена bitcoin bitcoin laundering bitcoin token linux bitcoin bitcoin видеокарты bitcoin fees
debian bitcoin ethereum microsoft Remember that the gas limit represents the maximum gas the sender is willing to spend money on. If they have enough Ether in their account balance to cover this maximum, they’re good to go. The sender is refunded for any unused gas at the end of the transaction, exchanged at the original rate.ethereum контракты ethereum code
bitcoin calc bitcoin анализ ethereum википедия monero price js bitcoin bitcoin blog будущее ethereum cryptocurrency trading
bitcoin electrum bonus bitcoin фото bitcoin взломать bitcoin майнинг monero bitcoin start
bitcoin упал bitcoin payment antminer bitcoin bitcoin шахта fenix bitcoin india bitcoin bitcoin exchanges In life, we must be very careful about who we trust. Most people only really trust their family and their friends. We wouldn’t give our personal information to a stranger in the street, because we don’t trust them. However, this is exactly what we do every time we open a bank account or pay for something online.