The early days of Bitcoin mining are often described as a gold rush. Those with a strong interest in such things, namely cypherpunks, cryptographers, technically-minded libertarians and assorted hackers, were first to stake their claim. But is there still gold in them thar hills? Bitcoin mining has grown from bitcoin mining pc specs handful of early enthusiasts into a cottage industry, into a specialized industrial-level venture.
The easy money was scooped out a long time ago and what remains is buried under the cryptographic equivalent of tons of hard rock. A new block is created on average every ten minutes. This is the cryptographic work which miners perform in order to find the solution which allows them to define a new block. PoW hashing ensures the proper function of the Bitcoin blockchain. There are no shortcuts in this process, which can only be solved with raw computational power.
The number of newly-created bitcoins, awarded to whichever miner creates a block. This number was initially set to 50, halved to 25 in late-2012, and halved again to 12. 210,000 blocks, until all 21 million bitcoins are created. Hashrate is the measure of a miner’s computational power. In early 2017, Bitcoin’s collective hashrate reached nearly 4 Exahash. D of such hardware, and electrical expenditure.
With hashrate shooting up over the years, it would seem blocks would be found by miners ever more rapidly. Bitcoin’s Difficulty measure is what prevents this from happening. It adjusts to hashrate to ensure that blocks are found roughly every 10 minutes. Note how closely Difficulty matches Hashrate in the 2 charts above. Watts per hashrate per second. Electricity is the major on-going cost of Bitcoin mining. The price paid per Watt will greatly influence profitability.
Bitcoin mining for your circumstances. This is due to the ever-changing nature of the Difficulty modifier and the BTC price, in particular. To begin, we must select a suitable ASIC mining rig. It’s pretty much the cutting edge of mining tech so we’ll select it for our example. 120 or so to the price. Note that the Hardware Costs field does not seem to influence the final calculation. Chinese industrial area or one in which electricity is subsidized.
Smaller pools will generally offer lower or even no fees, but keep in mind they will seldom find blocks. As a large miner would be able to negotiate a lower unit price on each S9, we can assume they’ll research profit even sooner. It’s not looking so great now. 1348 a year, assuming difficulty and price hold steady.
In other words, the unit will pay for itself within a year. This is a dangerous assumption! Therefore, any calculations should be regarded skeptically, as likely best-case scenarios. Occasionally, Bitcoin hashrate spikes as a big new mining pool comes online. It’s quite possible that even some big, corporate miners found their profit margins under threat from the resulting steep spike in competition. Also bear in mind that the rate of obsolescence in Bitcoin mining hardware is quite fast! New, more efficient mining hardware may be released at any time, although we are reaching the technological limits of improved efficiencies.
Such downside risks must always be factored into any sound business plan. The average home miner will struggle to be profitable or recoup the cost of mining hardware and electricity. Profitability is highly unlikely given the current circumstances. That, coupled with cheap, hopefully sustainable power solutions may once again make Bitcoin mining profitable to small individual miners around the world. This would also greatly improve the decentralization of the Bitcoin network, hardening it against legislative risk. Please forward this error screen to 158. We are currently getting too much traffic!
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