24 rows · Dec 22, · Cryptocurrency Mining Profitability Results The following list of . Dec 01, · BTC is calculated by 68 (miner hashrate) ÷ 85,, (network hashrate) × (number of blocks per day) × (block reward). Pool fees are normally –%, so let’s use % for the example; the net mining revenue is therefore BTC. If BTC is priced at $9,, then this M20S has a daily revenue of $ The Bitcoin mining profitability results and mining rewards were calculated using the best BTC mining calculator with the following inputs. A BTC mining difficulty of 18,,,,, a BTC mining hashrate of TH/s consuming 3, watts of power at $ per kWh, and a block reward of BTC at $23, (BTC to USD).
Btc profitability7 Reasons Bitcoin Mining is Profitable and Worth It ()
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. Unfortunately most older machines are now no longer profitable even in China. The Bitmain S9 has been operational since and interestingly enough they are still being used in Venezuela and Iran where electricity is so cheap that it outweighs the risk of confiscation.
There may, eventually, be more reputable sources of sub 2 cents electricity as the access to solar and wind improves in North America. For the individual miner, the only hope of competing with operations that have access to such cheap electricity is to send your machines to those farms themselves. Not many farms offer this as a service though. These days, every miner needs to mine through a mining pool.
Whether you are mining with one machine, or several thousand, the network of Bitcoin mining machines is so large that your chances of regularly finding a block and therefore earning the block reward and transaction fees is very low. With one block per 10 mins they may have to wait 16 years to mine that one block.
The oldest two pools are Slush Pool and F2Pool. Here comes the science part…. Pool fees are normally 2. Choosing the right mining pool is very important, as you will receive your mined bitcoin sent from the pool payouts every day. An often overlooked facet of mining profitability is the fees one pays to sell the Bitcoin one mines. If you are a small time miner, you may have to sell your coins on a retail exchange like kraken or binance.
Sometimes your fees are low but sometimes your fees are high - it really just depends on the fee structure of the exchange and the state of the orderbook at the moment. However, if you are a professional miner like F2 or Bitmain, you likely have really advantageous deals with OTC desks to sell your coins at little to no fees - depending on the state of the market.
Some miners are even paid above spot price for their coins. If you think you have what it takes be mine profitably, we suggest you make sure first by using our mining profitability calculator. Bitcoin farms that operate at scale use these advantages to maximize their returns. As the difficulty of mining bitcoin increases, and the price lags behind, it is becoming harder and harder for small miners to make a profit. It all comes down to scale and access to cheaper prices.
Whichever machine guesses the target number first earns the mining reward , which is currently 6. They also earn the transaction fees that people spent sending bitcoin to each other. Just like winning the lottery, the chances of picking the right hash is extremely low. However, modern bitcoin mining machines have a big advantage over a person playing the lottery. The machines can make an awful lot of guesses. Trillions per second. Each guess is a hash, and the amount of guesses the machine can make is its hashrate.
Other cryptocurrencies, like Litecoin , that use mining to support and secure their networks can be measured in hashrate. However, different coins have different mining algorithms which means that the chance of a mining machine guessing the target, writing the block onto the blockchain and getting the reward is different from one cryptocurrency to the next.
We can still compare the amount of hashrate between two different cryptocurrencies, and the Bitcoin network has a lot more computing power than all the other currencies put together. So when we talk about the hashrate of the Bitcoin network, or a single Bitcoin mining machine, then we are really talking about how many times the SHA algorithm can be performed.
The most common way to define that is how many hashes per second. When Satoshi gave the world Bitcoin back in , it was easy enough to measure hashrate in hashes per second because the computing power on the Bitcoin network was still relatively low.
You could mine Bitcoin on your home computer and it was quite possible and likely that you would occasionally earn the then 50 BTC block reward every so often. Today the block reward is only 6. The machines are simply hashing away locally and then communicating to the network usually via a pool when they have found the latest block.
It's hard to accurately measure the hashrate of all machines in the network. Hashrate charts are reverse engineered by comparing block frequency and network difficulty. The oscillations exist because difficulty is constant in two weeks but block frequency varies greatly. At F2Pool, we find that estimated Network Hashrate is best represented as a moving average. For a refresher on what difficulty is in the Bitcoin blockchain, read our explainer on difficulty or take a brief look at the video below:.
The daily estimation of hashrate is calculated by comparing the number of blocks that were actually discovered in the past twenty four hours with the number of blocks that we would expect would be discovered if the speed stayed constant at one block every ten minutes.
Bitcoin is programmed to mine a block about every 10 minutes. In short, it becomes more difficult for miners to find the target. The Tweet below is a good example of the kind of confusion hashrate data can create when it is not presented as a moving average. Look at this Bitcoin chart. Why is the BTC hash rate oscillating so much? The amplitude seems to have increased in recent months, does that imply hash rate centralization? Or are Bitcoin PoW pools gaming the difficulty calculation?
The chart below shows Bitcoin Hashrate as a three day moving average vs the price of Bitcoin itself, without the wild oscillations. Compared to the entire Bitcoin network that one machine is a drop in the ocean. There are millions of machines, in multiple countries hashing away trying to discover the next block. Mining is a margins game, where every cent counts. If you ran an M20S on its own then probabilistically you would earn a single block every 16 years. Another aspect of the mining business that affects revenue is taxes.
Every miner needs to know the relevant tax laws for Bitcoin mining in his part of the world, which is why it is so important to use a crypto tax software when calculating profits. As the hashrate on the Bitcoin network increases, the chances of earning a reward through solo mining decreases.
To increase their chances of earning mining revenue, miners connect to a mining pool to pool their computing power and proportionately share the block rewards of any block mined by the pool based on the amount of hashrate they contributed. When Satoshi created Bitcoin and gave it to the world, he took the idea of hashrate and used it to ensure that Bitcoin would remain decentralized and secure. In Bitcoin, a proof-of-work is just a piece of data - or more precisely a number - which falls below a predetermined difficulty target that is continually and automatically readjusted by the Bitcoin protocol.
For miners competing in the Bitcoin network, finding or generating this number involves repeatedly hashing the header of the block until the hashing algorithm spits out an output that falls below the aforementioned pre-set difficulty target. Miners expend computational energy and compete to find the proof-of-work because finding the proof-of-work is the only way to validate blocks, and validating blocks is how miners in the Bitcoin network make their living. The first miner to validate a block gets to create a unique transaction, called a coinbase transaction, whereby the miner rewards himself with a set amount of newly minted bitcoins.
The process of hashing is, in fact, quite simple but requires an enormous amount of computational energy. Put simply, hashing is the transformation of a string of characters the input into a usually shorter, fixed-length value or key the output that represents the original string.
The trick with hashing is that, while running the same input through the same hashing algorithm always gets us the same output, changing only the smallest bit of the input and running it through the same algorithm changes the output completely.
In order to find the proof-of-work, miners must repeatedly change the input which is consisted of the block header - the part that stays the same - and a random number called a nonce - which is the variable that miners change to get a different output and run it through the SHA cryptographic algorithm until they find a hash that meets the preset difficulty target.
Using sophisticated mining hardware called ASICs Application-Specific Integrated Circuits , miners can make hundreds of thousands of these calculations per second. It takes the entire network of miners roughly 10 minutes to find and validate a new block of transactions.
The ever-changing difficulty target ensures that the Bitcoin protocol runs smoothly and that a new block is validated and added to the Bitcoin blockchain roughly every 10 minutes on average. This minute interval between blocks is better known as block time.
Difficulty matters for more than just protocol security. Maintaining a stable block time has substantial monetary implications. Maintaining a low, fixed and predictable inflation rate is essential for a scarce digital asset such as Bitcoin. Briefly, the Bitcoin difficulty determines how much work a miner needs to put in to solve the complex mathematical problem that will allow them to add a new block of transactions to the blockchain.
This difficulty is either increased or decreased after every blocks, or roughly every 14 days, depending on how quickly the previous blocks were found. If the previous blocks took less than 14 days to discover, then the difficulty increases, whereas it decreases if it took more than 14 days to discover—all with the goal of returning the average block discovery time to 10 minutes.
Because the hash rate tends to increase over time, so too does the block discovery difficulty—which, in turn, makes it harder for miners with older hardware to keep up as their proportion of the total hash rate reduces over time.
However, since the price of Bitcoin also tends to rise following an increase in the hash rate, the increasing difficulty doesn't always mean reduced profitability. There are also a handful of steps miners can take to quicken their return on investment ROI and maximize profits. The best way to stay on top of the difficulty curve and maximize the odds of achieving profitability is by acquiring the latest, most efficient mining hardware at a fair price.
Those looking to turn a profit by investing in new mining hardware will need to consider the price and shipping cost and any potential delays , import taxes, and electricity costs involved in acquiring and operating their new hardware. The ideal Bitcoin miner is both energy efficient and offers excellent bang for the buck terms of hash rate output.