Is Bitcoin mining profitable?
Nowadays you need professional equipment that can handle enormous computing power to even make it worthwhile. This means you need to invest heavily in equipment, cooling, and storage. And by storage, we don’t mean the size of your hard drive alone but also quite a lot of physical space. It is no coincidence that entire warehouses are stuffed with computers that mine Bitcoin 24/7. So we have to answer Is Bitcoin Mining Profitable?
This is because nowadays the process of mining bitcoin is not exactly profitable anymore for anyone at home. Before you even ask yourselves “should I invest in Bitcoin mining”? You need to consider the following factors:
- Cost of Electricity: How much electricity is required to run a profitable miner? Note that energy rates change depending on the time of day, the year or other factors. Check your electricity bill for details on those.
- Cost of initial investment: What is the price of the computer system or miner that is required to mine Bitcoin with a profit? You need to look at specialized hardware called ASIC-miners for that. Home desktops don’t cut the deal anymore.
- Power consumption: Your miner uses up power, so you need to check how much – as each miner consumes a different amount of electricity. Find out the exact power consumption in Kilowatts.
- Bitcoin value: How much is Bitcoin worth in dollars or your official currency? Note that mining Bitcoin at the height of a rally might not be a smart idea.
- The effectiveness of your miner: Measured in hash rate. A hash is a mathematical problem your miner needs to solve. The hash rate of your miner thus refers to your miner’s performance.
- Time: Determine how long you will spend mining. Will you run your Bitcoin miner 24/7 of only at set times?
- Difficulty: This represents how hard it is to mine bitcoin given the total amount of processing power that is being contributed to the Bitcoin blockchain. Note that it is difficult to predict the number of active miners in 10 days, 10 weeks or 10 years from now.
- Bitcoin block reward: This is the number of Bitcoins that are rewarded to those that helped solve the cryptographic puzzle and successfully mined Bitcoin. At set times this amount halves. Currently, the number of Bitcoins awarded per block is 12.5 – the next halving is scheduled is 2020.
As you can tell, that are quite a lot of factors to account for. Luckily there exist handy little calculators that can determine with the help of the factors above the estimated profit of mining bitcoin. An example of a website that provides a good calculator is BuyBitcoinWorldwide.
The sad truth, however, which you will find out after you fill in the calculator as well, is that mining bitcoin is profitable only under very specific circumstances.
Is Bitcoin mining profitable, or is Bitcoin a good investment? Some options exist to measure the potential of an investment, such as a SWOT-analysis or ROI measurement. In this article you will learn the basics so you can answer yourself: are bitcoins safe to invest in?
What is Bitcoin mining?
Bitcoin mining is the method where Bitcoins are rewarded to you from the blockchain for using computational power known as ‘hash rate’, possible straight from your computer. The way it works is you let your computer verify and compile recent transactions on the blockchain into blocks and then try solving cryptographic puzzles with your computer. Participants get a part of newly minted Bitcoin in exchange for lending their PC’s processing power.
Lots of people around the world simultaneously do this – and the more processing power of your computer contributed to solving the “puzzle” the more Bitcoin you get in return. Back in the days, this was the easiest way to get bitcoins. You didn’t have a lot of exchanges which were considered safe to use them.
The early days of mining Bitcoin are often referred to as a gold rush, in which especially hackers, tech-minded libertarians or other like-minded individuals took part in. The process of mining Bitcoin can be done anywhere basically, from a dusty old laptop you still have lying around in the cellar to your own home desktop pc. This basically meant you printed money just for having your computer on.
Now before you rush off and look up how to become a Bitcoin miner you must realize that the creator of Bitcoin came up with a couple of rules in mining Bitcoin. The more mining power is contributed to the Bitcoin blockchain, the harder it is to solve the cryptographic puzzle. This is also referred to as the ‘mining difficulty’. The more people participate, the higher the difficulty and thus, the more processing power is required to create Bitcoin. This basically renders your dusty old laptop obsolete. You need to invest in powerful equipment to stand a chance of running a profit with mining Bitcoin. And so, we ask ourselves: “is Bitcoin mining still profitable in 2018?”
Best Bitcoin investment strategy
Only those with specialized high-end equipment can turn a profit with mining bitcoin. Fret not however as you can still capitalize on this. These days it is possible to invest in a company that mines for you. Instead of putting in the money and work yourself you can let professionals take most of your risk away.
The main premise of investing in a mining operation is that you lend out your money and in return that money is invested to mine Bitcoin for you. When you invest in bitcoin mining this way you don’t have to deal with all the costs and requirements to set it up. There is no minimum bitcoin investment needed. Even a small investment would net a return in the form of Bitcoin.
So yes, mining can be very profitable depending on certain factors and most of these are all met by Elite Mining Inc., one of the more reputable companies offering such services. EMI is a dynamic Bitcoin mining operation that enjoys one of the best electricity rates in the world. The company also deals with low operational overhead due to its structure. This way EMI can provide a higher return on investment for mining bitcoin than similar other mining companies. You can look at it as if you invest in a Bitcoin stock, as you can buy and sell at every given moment. They’re fully transparent about everything. You can check their performance, rigs and your return on investment real-time 24/7.
In closing, if you want to know one of the better bitcoin investment sites I would suggest looking at EMI as a benchmark in researching other mining companies. Fact is, as small-time consumers mining bitcoin is not profitable for us anymore. Investing in a mining operation that can reduce operational costs will likely net a higher return and lets you avoid doing it on your own.