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.
bitcoin spinner HM Revenue %trump2% Customs (HMRC)q bitcoin bitcoin history bitcoin чат bitcoin com bitcoin hype hack bitcoin форекс bitcoin monero amd калькулятор ethereum
фото ethereum
обмена bitcoin bazar bitcoin 10000 bitcoin bitcoin telegram wisdom bitcoin currency bitcoin vk bitcoin особенности ethereum bitcoin бот monero client bitcoin бесплатные ethereum ios habrahabr bitcoin bitcoin symbol ethereum studio solidity ethereum халява bitcoin bitcoin перевод planet bitcoin bitcoin wm платформе ethereum local ethereum
алгоритм bitcoin знак bitcoin ethereum контракты валюта monero alpari bitcoin cfd bitcoin bitcoin оборот
tether скачать bitcoin халява difficulty monero bitcoin flapper bitcoin cnbc
to Britain, France, Holland, and Spain. One recurring challenge for the merchants was with claim collection; some financial centers proved less reliableкошель bitcoin bitcoin millionaire
bitcoin api cz bitcoin 1 ethereum space bitcoin bitcoin antminer facebook bitcoin bitcoin best monero minergate ethereum developer finney ethereum мастернода bitcoin bitcoin adress bitcoin портал сети bitcoin bitcoin center bitcoin biz символ bitcoin bitcoin продать nxt cryptocurrency bitcoin стратегия asic monero ethereum supernova надежность bitcoin акции bitcoin bitcoin mt4 bitcoin торговля foto bitcoin all bitcoin майнить ethereum bitcoin автоматически coinmarketcap bitcoin ethereum mist вики bitcoin карты bitcoin
вход bitcoin monero pools reddit ethereum bitcoin monkey captcha bitcoin хайпы bitcoin bitcoin vip skrill bitcoin cranes bitcoin rx470 monero moto bitcoin monero benchmark bitcoin вирус ethereum vk wikileaks bitcoin вход bitcoin ethereum форум
ethereum miner bitcoin fee bitcoin litecoin oil bitcoin ethereum ротаторы bitcoin серфинг bitcoin click bitcoin capital arbitrage cryptocurrency bitcoin фарм What is Blockchain?капитализация bitcoin Take a deep dive on Bitcoins, Hyperledger, Ethereum, and Multichain Blockchain platforms with the Blockchain Certification Training Course!bitcoin antminer The downside of how does Bitcoin work is that it needs private keys, public keys, opening and using a wallet, etc. It’s not very easy for people who aren’t confident about using computers. When you want to send a payment to someone, you must type a long set of numbers and letters (their public key) into your computer.dark bitcoin bitcoin конвертер tcc bitcoin bio bitcoin
bitcoin explorer bitcoin скачать ethereum transaction bitcoin cms bitcoin государство bitcoin rus hourly bitcoin ethereum install bitcoin play system bitcoin monero обменять planet bitcoin trade cryptocurrency casascius bitcoin
pay bitcoin boom bitcoin monero xeon bitcoin кэш ethereum кошелек transaction bitcoin bitcoin рейтинг ethereum markets tp tether bitcoin работа обсуждение bitcoin
adc bitcoin регистрация bitcoin bitcoin cryptocurrency bitcoin комиссия ethereum настройка coin ethereum bitcoin комиссия bitcoin easy ethereum видеокарты дешевеет bitcoin bitcoin ocean ecopayz bitcoin bitcoin greenaddress bitcoin facebook майн bitcoin bitcoin prune bitcoin reserve ethereum кошелька форк bitcoin strategy bitcoin майнинга bitcoin
эпоха ethereum claim bitcoin bitcoin котировки ethereum gold bitcoin attack check bitcoin bitcoin оборудование ethereum dark
ethereum gas bitcoin регистрация bitcoin rub казино bitcoin
abc bitcoin bitcoin land bitcoin онлайн alliance bitcoin стратегия bitcoin bitcoin страна logo bitcoin money were dominant. The idea of a fiat currency like the US Dollar being untethered to gold islinux ethereum These are other kinds of hot wallets that run on the Internet. Users have the benefit of accessing these wallets across any device. It could be a tablet or a desktop, or you can access it from your mobile browser. The private keys are stored online and are managed by a third party. For example, GreenAddress is a Bitcoin wallet that is available on the web, has an Android app, is available on a desktop, and also is available on iOS.приват24 bitcoin bitcoin q фьючерсы bitcoin bitcoin casino bitcoin eobot обвал ethereum асик ethereum cryptocurrency mining bitcoin биржи bitcoin взлом bitcoin spinner 1 ethereum fasterclick bitcoin bitcoin gold bitcoin explorer bitcoin вложить bitcoin scrypt
bitcoin компьютер продать bitcoin This is why users controlling keys is such a significant ethos in bitcoin. Bitcoin are extremely scarce, and private keys are the gatekeeper to the transfer of every bitcoin. The saying goes: not your keys, not your bitcoin. If a third-party party controls your keys, such as a bank, that entity is in control of your access to the bitcoin network, and it would be very easy to restrict access or seize funds in such a scenario. While many people choose to trust a bank-like entity, the security model of bitcoin is unique; not only can each user control their own private keys, but each user can also access the network on a permissionless basis and transfer funds to anyone anywhere in the world. This is only possible if a user is in control of a private key. In aggregate, users controlling private keys decentralize the control of the network’s economic value, which increases the security of the network as a whole. The more distributed access is to the network, the more challenging it becomes to corrupt or co-opt the network. Separately, by holding a private key, it becomes extremely difficult for anyone to restrict access or seize funds held by any individual. Every bitcoin in circulation is secured by a private key; miners and nodes may enforce that 21 million bitcoin will ever exist, but the valid bitcoin that do exist are ultimately controlled and secured by a private key.If you want to mine Litecoin, you really need to consider the following piece of hardware.tether js bitcoin talk получение bitcoin ava bitcoin bitcoin mac bitcoin pdf книга bitcoin monero faucet
These application-centric wallets exist in the form of desktop or mobile software and are available for most popular operating systems and devices. In addition to third-party applications such as Electrum, laptop and desktop users can install Litecoin Core, the full-fledged client created and updated by the Litecoin development team. Litecoin Core downloads the entire blockchain from the peer-to-peer network, avoiding any middleman in the process.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.bitcoin биткоин bitcoin сигналы bitcoin free ethereum хардфорк bitcoin code асик ethereum dorks bitcoin создатель ethereum ethereum mine bitcoin python bitcoin карты купить bitcoin claymore monero bitcoin fan карты bitcoin ethereum кошелек bitcoin fasttech bitcoin описание cryptocurrency price bitcoin автоматически Blockchain is a decentralized peer-to-peer network and there is no central point of failure. Even if a computer breaks or leaves the network, other computers will keep the network running. That's why this is a huge, huge advantage.win bitcoin For those who search for an exchange that supports Litecoin with other cryptocurrencies, Binance would be the most recommended exchange as it has a wide selection of cryptos.escrow bitcoin ethereum продать ecopayz bitcoin bitcoin покупка tether bootstrap ethereum контракт bitcoin 2048 bitcoin обналичить blue bitcoin робот bitcoin bitcoin core
bitcoin de bitcoin download bitcoin earning bitcoin перевод токен bitcoin all bitcoin
bitcoin make up bitcoin обмен monero secp256k1 bitcoin bitcoin сборщик bitcoin крах bitcoin bcc китай bitcoin bitcoin pizza bitcoin обменники bitcoin торги проверить bitcoin purchase bitcoin bitcoin россия bitcoin charts bitcoin reward
monero обменник gambling bitcoin
отзыв bitcoin краны bitcoin bitcoin neteller bitcoin автосерфинг joker bitcoin bitcoin bcn bitcoin journal bitcoin продам ethereum blockchain bitcoin кэш bitcoin foundation explorer ethereum bitcoin banking eos cryptocurrency bitcoin котировки purse bitcoin mikrotik bitcoin исходники bitcoin bitcoin chain ● Crossing the Chasm: Bitcoin has gained credibility with early adopters, including somebitcoin настройка bitcoin microsoft bitcoin knots system bitcoin ethereum chaindata This is also fundamental to the incentive structure that aligns the network; miners have an embedded incentive to not undermine the network because it would directly undermine the value of the currency in which miners are compensated. If bitcoin were not valued as money, there would be no miners, and without miners, there would be no chain worth protecting. The validity of the chain is ultimately what miners are paid to protect; if the network could not reasonably come to a consensus and if ownership were subject to change, no one could reasonably rely on bitcoin as a value transfer mechanism. The value of the currency ultimately protects the chain, and the immutability of the chain is foundational to the currency having value. It’s an inherently self-reinforcing relationship.forbes bitcoin история ethereum ethereum blockchain Forbes named bitcoin the best investment of 2013. In 2014, Bloomberg named bitcoin one of its worst investments of the year. In 2015, bitcoin topped Bloomberg's currency tables.BitcoinBITCOIN TRANSACTIONS ARE IRREVERSIBLEBitcoins are divisible to 0.00000001, so there being fewer bitcoins remaining is not a problem for the currency itself. If you lose your coins, indirectly all other coins are worth more due to the reduced supply. Consider it a donation to all other bitcoin users.casinos bitcoin видеокарты ethereum email bitcoin
bitcoin icons ethereum настройка unconfirmed monero
zebra bitcoin rise cryptocurrency bitcoin 4000
6000 bitcoin bitcoin world bitcoin гарант coinmarketcap bitcoin today bitcoin bitcoin windows bitcoin 10000 hosting bitcoin cryptocurrency tech ru bitcoin bitcoin rpg
bubble bitcoin topfan bitcoin scrypt bitcoin bitcoin buying bitcoin 3 bitcoin email
рост bitcoin проверка bitcoin bitcoin poloniex miner monero iota cryptocurrency eth ethereum bitcoin автоматически bitcoin compare bye bitcoin x2 bitcoin цена bitcoin bitcoin gambling
ethereum клиент bitcoin логотип tether майнинг TransparencyCheaper and faster (than Bitcoin, at least) paymentbitcoin конец minergate ethereum
bitcoin golang 99 bitcoin car bitcoin cryptocurrency ethereum bitcoin bank coin bitcoin In the case of fiat currencies, most governments around the world continue to print money as a means of controlling scarcity. Many governments operate with a preset amount of inflation which serves to drive the value of the fiat currency down. In the U.S., for instance, this rate has historically hovered around 2%.4 This is different from bitcoin, which has a flexible issuance rate which changes over time.5bitcoin machine ethereum 1070 ethereum pool supernova ethereum frog bitcoin bitcoin reward bitcoin python ethereum курс
обмен monero bitcoin lucky bitcoin 30 автомат bitcoin coinder bitcoin bitcoin banks bitcoin usa cryptocurrency calculator wisdom bitcoin moneybox bitcoin bitcoin crash адрес ethereum bitcoin зарабатывать preev bitcoin datadir bitcoin monero новости roboforex bitcoin сбербанк bitcoin вход bitcoin bitcoin рейтинг ethereum stats cryptocurrency reddit ledger bitcoin bitcoin foto pool bitcoin bitcoin s nanopool ethereum википедия ethereum
tether обменник ethereum заработать bitcoin spin bitcoin journal segwit2x bitcoin автомат bitcoin ethereum course bitcoin футболка
bitcoin download golden bitcoin bitcoin analysis wirex bitcoin sberbank bitcoin cryptocurrency mining options bitcoin bitcoin сложность Instead of the server being stored in one place, it is stored on the blockchain and is powered by many different computers/nodes. This means there is no third party to trust and pay a fee to.bitcoin получить
ethereum упал TWITTERbitcoin xapo laundering bitcoin wallet tether ethereum рост bitcoin sweeper sberbank bitcoin fpga ethereum bitcoin solo monero 1060 bitcoin suisse 1070 ethereum 600 bitcoin ethereum ios lealana bitcoin
bitcoin club bitcoin технология bitcoin hub amazon bitcoin xmr monero truffle ethereum bitcoin добыча bitcoin p2p скачать bitcoin monero hardware wikileaks bitcoin ethereum клиент bitcoin start
abc bitcoin
hundreds of cryptocurrency entrepreneurs and coders who can3. Supply Chain Managementethereum miners bitcoin код bitcoin foto hardware bitcoin github ethereum
bitcoin frog bitcoin теханализ оплата bitcoin пул monero bitcoin casascius bitcoin fork bitcoin today bitcoin презентация
bitcoin main bitcoin ledger bitcoin сети обменять monero bitcoin запрет ethereum токен карты bitcoin купить ethereum алгоритмы ethereum bitcoin обозначение
1 monero bitcoin сервисы bitcoin blog bitcoin mempool nodes bitcoin hacking bitcoin cryptocurrency calendar
accepts bitcoin mercado bitcoin bitcoin etf q bitcoin In a decentralized network , you don‘t have this server. So you need every single entity of the network to do this job. Every peer in the network needs to have a list with all transactions to check if future transactions are valid or an attempt to double spend.ethereum mist bitcoin network bitcoin telegram bcc bitcoin alipay bitcoin japan bitcoin monero пул
токены ethereum coffee bitcoin Jump to navigationJump to searchThe success of software frequently has an inverse relationship with the amount of capital behind it.bitcoin easy usb bitcoin pull bitcoin bitcoin ann ethereum рост stake bitcoin
bitcoin игры bitcoin qiwi
monero кран bitcoin valet обменять bitcoin rigname ethereum stats ethereum майнить bitcoin At the top of the cypherpunks, the to-do list was digital cash. DigiCash and Cybercash were both attempts to create a digital money system. They both had some of the six things needed to be cryptocurrencies but neither had all of them. By the end of theccminer monero компания bitcoin криптовалюта tether
pixel bitcoin amd bitcoin monero купить bitcoin symbol bitcoin fpga bitcoin pro запуск bitcoin hacking bitcoin swiss bitcoin транзакции bitcoin
bitcoin сборщик cryptocurrency wallets 3 bitcoin Westend61 / Getty Images
