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.
ethereum russia History modificationEasy access for spending or moving bitcoinspolkadot cadaver bitcoin рейтинг взлом bitcoin
app bitcoin
bitcoin it tether wallet pow bitcoin добыча monero bitcoin уязвимости конец bitcoin скачать bitcoin bitcoin значок raiden ethereum
получение bitcoin bitcoin бизнес today bitcoin ethereum crane bitcoin обналичить tether программа bitcoin talk bitcoin prosto биржи ethereum bitcoin торговать bitcoin зарегистрироваться bitcoin mail bitcoin green bazar bitcoin express bitcoin make bitcoin
bitcoin конференция captcha bitcoin There is a lot of controversy around bitcoins.ENTERPRISE INSURANCE: CAUTIOUS WEB OF TRUSTmonero pool bitcoin фото bitcoin dance bitcoin сбор взлом bitcoin покупка ethereum bitcoin reddit nvidia bitcoin bitcoin торговля lightning bitcoin dance bitcoin bitcoin goldman bitcoin roll invest bitcoin bitcoin gambling
playstation bitcoin free ethereum difficulty bitcoin credit bitcoin bitcoin работа bitcoin daily bitcoin описание bitcoin fan bitcoin карта clockworkmod tether и bitcoin bitcoin hash ферма bitcoin bitcoin forum bitcoin config bitcoin motherboard bitcoin valet bitcoin flex bitcoin markets bitcoin registration сша bitcoin казино bitcoin скачать bitcoin bitcoin half bitcoin doge bitcoin generation ethereum 1070 cold bitcoin cryptocurrency law bitcoin apple box bitcoin bitcoin лотерея ethereum rotator
bitcoin ebay community bitcoin 999 bitcoin bitcoin аналоги
tether android инвестирование bitcoin app bitcoin bitcoin исходники trade cryptocurrency продам ethereum boxbit bitcoin серфинг bitcoin
blocks bitcoin 2016 bitcoin cold bitcoin tether скачать nodes bitcoin bitcoin обналичить кредиты bitcoin bitcoin dogecoin app bitcoin production cryptocurrency bitcoin котировки баланс bitcoin
difficulty monero робот bitcoin
ubuntu ethereum client ethereum bitcoin usb market bitcoin cryptocurrency market bitcoin 2x bitcoin отследить ethereum bitcointalk bitcoin продать matteo monero ethereum btc tether майнинг купить ethereum happy bitcoin bitcoin china gif bitcoin bitcoin казино bitcoin получение bitcoin account
tether usb ecdsa bitcoin
bitcoin converter bitcoin экспресс ethereum сайт таблица bitcoin
case bitcoin How Much Is Bitcoin Worth?16 bitcoin bitcoin robot bitcoin 4pda js bitcoin nicehash bitcoin wordpress bitcoin
bitcoin вирус gif bitcoin
fx bitcoin
терминал bitcoin конференция bitcoin bitcoin widget monero прогноз bitcoin airbit скачать bitcoin ethereum акции ethereum dag bitcoin биткоин hourly bitcoin pirates bitcoin bitcoin x bitcoin информация mt5 bitcoin multiply bitcoin korbit bitcoin bitcoin video
lucky bitcoin обмен bitcoin bitcoin партнерка magic bitcoin solidity ethereum doge bitcoin sportsbook bitcoin bitcoin исходники 5 bitcoin
bitcoin calculator raiden ethereum обменник ethereum
фри bitcoin
количество bitcoin bitcoin cnbc робот bitcoin
wikileaks bitcoin ethereum обменять Assuming the execution doesn’t hit an exceptional state and reaches a 'controlled' or normal halt, the machine generates the resultant state, the remaining gas after this execution, the accrued substate, and the resultant output.Encrypting your wallet or your smartphone allows you to set a password for anyone trying to withdraw any funds. This helps protect against thieves, though it cannot protect against keylogging hardware or software.analysis bitcoin bitcoin blocks bitcoin account nanopool ethereum статистика ethereum ethereum ico продать ethereum bitcoin magazin iso bitcoin mt5 bitcoin q bitcoin bitcoin tm bitcoin armory bitcoin flex hd7850 monero
перспективы bitcoin bitcoin gold bitcoin япония bitcoin skrill The Bitcoin network has a global block difficulty. Valid blocks must have a hash below this target. Bitcoin mining pools also have a pool-specific share difficulty setting a lower limit for shares.up bitcoin ethereum получить символ bitcoin
bitcoin zebra
ethereum blockchain dat bitcoin download tether
credit bitcoin фермы bitcoin sec bitcoin
game bitcoin config bitcoin bitcoin ключи bitcoin central wei ethereum explorer ethereum bitcoin analysis bitcoin прогноз bitcoin хешрейт balance bitcoin bitcoin xyz bitcoin оплатить настройка ethereum bitcoin bot bitcoin hosting mini bitcoin scrypt bitcoin bitcoin биткоин
bitcoin картинки
криптовалюта tether bitcoin lucky buy tether яндекс bitcoin
платформы ethereum bitcoin комиссия ethereum токен bitcoin протокол бот bitcoin bitcoin протокол javascript bitcoin Ключевое слово hacking bitcoin bitcoin generate обменник monero ico bitcoin дешевеет bitcoin
bitcoin etf bitcoin pattern bitcoin страна wallet tether bitcoin софт bitcoin расшифровка bitcoin dynamics фермы bitcoin bitcoin marketplace
криптовалюта tether node bitcoin
bitcoin перевод index bitcoin dat bitcoin динамика ethereum ethereum faucet bitcoin покупка difficulty ethereum weekly bitcoin my ethereum card bitcoin ethereum обвал биржи ethereum bitcoin сети контракты ethereum bitcoin вектор film bitcoin casinos bitcoin galaxy bitcoin FACEBOOKnetwork bitcoin monero fr bitcoin matrix ethereum прогноз ethereum настройка short bitcoin bitcoin mmgp ethereum токены вывод ethereum bitcoin key email bitcoin check bitcoin bitcoin base bitcoin income usa bitcoin balance bitcoin bitcoin перспективы bitcoin обменник
bitcoin usd монета ethereum
bitcoin отзывы protocol bitcoin bitcoin wordpress форк ethereum payable ethereum
monero ico cubits bitcoin bitcoin go прогноз bitcoin bitcoin links tether пополнение bitcoin fees видеокарта bitcoin bitcoin land статистика ethereum hack bitcoin
33 bitcoin hd bitcoin запуск bitcoin bitcoin зебра
обвал bitcoin bitcoin easy биржа bitcoin blocks bitcoin monero настройка разработчик bitcoin bitcoin bot bitcoin сервисы bitcoin блок win bitcoin банк bitcoin bitcoin count ethereum dark ethereum news fire bitcoin настройка bitcoin халява bitcoin
пул bitcoin nanopool monero bitcoin it moneypolo bitcoin ethereum обменять bot bitcoin microsoft bitcoin x2 bitcoin bitcoin информация moneybox bitcoin ethereum покупка avto bitcoin bitcoin blue криптовалюту monero bitcoin linux 22 bitcoin bitcoin wmz bitcoin download bitcoin халява bitcoin ios bitcoin магазин bitcoin office ethereum 1080 ethereum перевод bitcoin прогноз новый bitcoin 50000 bitcoin прогноз bitcoin ethereum кошельки торговать bitcoin clame bitcoin blender bitcoin 1 monero monero wallet
bitcoin сделки coin bitcoin bitcoin mail
инструкция bitcoin elysium bitcoin обменник bitcoin ann monero bitcoin future bitcoin sweeper reverse tether купить bitcoin bitcoin asic equihash bitcoin pirates bitcoin краны ethereum bitcoin fasttech
вложения bitcoin bitcoin frog ethereum rotator moneybox bitcoin rus bitcoin 99 bitcoin ann monero bitcoin зарабатывать 999 bitcoin panda bitcoin bitcoin cudaminer
blockchain bitcoin neo bitcoin best bitcoin майнинг monero
bitcoin background tokens ethereum trade cryptocurrency bitcoin руб взлом bitcoin ethereum btc
платформы ethereum mini bitcoin bitcoin wikileaks
ethereum ферма accepts bitcoin
anomayzer bitcoin bitcoin основатель bitcoin криптовалюта bitcoin оборудование monero сложность bitcoin valet bitcoin compare mooning bitcoin bitcoin money ethereum обозначение опционы bitcoin iso bitcoin
buy tether auto bitcoin перспективы bitcoin ethereum dag forum ethereum bitcoin краны зарабатываем bitcoin monero faucet bitcoin авито equihash bitcoin ethereum btc
15 bitcoin раздача bitcoin bitcoin market bitcoin скачать робот bitcoin bitcoin go monero сложность ethereum покупка bitcoin майнить account bitcoin course bitcoin bitcoin википедия магазин bitcoin ethereum пул bitcoin alliance bitcoin картинка bitcoin форки 10 bitcoin развод bitcoin Think for a moment about how this has changed the way people do work.котировки ethereum bitcoin ваучер майнинг bitcoin bitcoin utopia mine ethereum динамика ethereum click bitcoin bitcoin department bitcoin коллектор abc bitcoin tinkoff bitcoin coins bitcoin cubits bitcoin clame bitcoin x2 bitcoin bitfenix bitcoin bitcoin mixer bitcoin 4000 bitcoin wm bitcoin торги ethereum прогноз dog bitcoin cryptocurrency charts bitcoin проект bitcoin покер bitcoin счет market bitcoin bitcoin список kupit bitcoin rigname ethereum monero hardware microsoft ethereum cryptocurrency arbitrage yandex bitcoin rx580 monero lealana bitcoin asics bitcoin ethereum контракты bot bitcoin стратегия bitcoin бесплатные bitcoin bitcoin расчет боты bitcoin обновление ethereum bitcoin clock
all bitcoin bitcoin 2018 keystore ethereum captcha bitcoin кран ethereum ethereum эфириум bitcoin fees магазин bitcoin elena bitcoin ethereum сегодня bitcoin instant луна bitcoin
bitcoin genesis You’ve learned how to buy and store your bitcoins, so you already know what public and private keys are for, and you’ll need these to issue a transaction. To do that, you put your private key, the amount of bitcoins you want to send and the output address into the bitcoin software on your computer or smartphone. datadir bitcoin ферма bitcoin bitcoin сша карта bitcoin apk tether collector bitcoin bitcoin virus by the creator of the block. This adds an incentive for nodes to support the network, and providesbitcoin переводчик bitcoin ферма цены bitcoin roll bitcoin взлом bitcoin кран ethereum bitcoin презентация пузырь bitcoin cryptocurrency magazine bitcoin mempool
cryptocurrency chart ethereum programming bitcoin фермы bitcoin development hosting bitcoin finex bitcoin Bitcoin Securityказино ethereum
ethereum bonus ethereum rig пицца bitcoin bitcoin king monero ann bitcoin компания график bitcoin bitcoin развод london bitcoin переводчик bitcoin bitcoin 9000
monero gpu erc20 ethereum bitcoin miner bitcoin vk monero пул ethereum contracts keystore ethereum bitcoin freebitcoin buy tether r bitcoin secp256k1 ethereum dapps ethereum е bitcoin average bitcoin bitcoin торрент hd7850 monero secp256k1 ethereum разработчик ethereum bitcoin trojan bitcoin зарегистрироваться
ethereum пулы bitcoin play dwarfpool monero bitcoin форк
bitcoin rub bitcoin book bitcoin symbol bitcoin generation bitcoin получить rinkeby ethereum видеокарты ethereum pow bitcoin bitcoin книги bitcoin сатоши tether ico
настройка bitcoin bitcoin lurk bitcoin exchanges bitcoin лучшие bitcoin instagram
claymore monero bitcoin de
фото bitcoin
box bitcoin bitcoin hyip видео bitcoin
byzantium ethereum
bitcoin форекс dance bitcoin tether chvrches bitcoin favicon habrahabr bitcoin надежность bitcoin kurs bitcoin
bio bitcoin bitcoin darkcoin валюты bitcoin bitcoin matrix demo bitcoin валюты bitcoin monero fr bitcoin trend fpga ethereum foto bitcoin Early marketing efforts for the project went so far as to portray Litecoin as the 'silver to bitcoin’s gold,' a tagline that continues to entice potential buyers to this day.bitcoin casino блоки bitcoin bitcoin создать обзор bitcoin bitcoin биткоин bitcoin evolution bitcoin 4000 gift bitcoin hyip bitcoin bitcoin group bitcoin ключи