Bitcoin Mining Profitability: Is it Viable?

Bitcoin Mining Profitability is what every investor wants to know, especially those in the Cryptocurrency sector. Those who started early had the chance of earning 50 BTC every 10 minutes. Most of the early miners did it as a hobby and are now ripping huge rewards.

For those who mined Bitcoin and have been holding it since 2010, it’s now ripe. In 2020, it meant you have $469,000 worth of Bitcoin in your wallet. 10 years ago, Bitcoin Mining needed a powerful computer, stable internet, and patience.

Today’s Bitcoin Mining world is not a level playing field. Hundreds of industrial crypto miners have flooded the market, raising mining expenses. It now makes more sense to buy and sell on a reliable and trustworthy Bitcoin exchange.

You can also join reliable crypto mining companies for a chance to mine profitable coins. Thanks to the years they have put in, these mining companies provide a more feasible option. Join hundreds of successful miners who rip huge benefits through crypto mining companies. It’s high time you took advantage of industry professionals and make money with Crypto mining.

About Bitcoin Mining Profitability

To learn more about Bitcoin Mining, you need to know the basics. You can earn semi-passive income out of mining Crypto by understanding the fundamentals. Mining crypto is the backbone of all proof-of-work blockchain. It is described in three concepts;

Bitcoin block reward

After halving in May 2020, the block reward dropped significantly. The reward is the prize the miner gets from solving puzzles minus the transaction fees. After every ten minutes, this process repeats with every machine mining on the network.

Network difficulty will adjust after every 2016 block (14 days), give or take. This helps to ensure that at least one machine solves the puzzle within the 10-minute timeline. To calculate network difficulty, you need to know the hash rate amount available on the network.

Proof of work calculations

This is the energy-intensive puzzle that each machine uses to solve blocks every ten minutes. The miner that completes the puzzle first adds new blocks to the blockchain.

Transaction records

You have to add and verify all transactions on the blockchain ledger. The ledger is where you can view every transaction that occurs in the blockchain. You can even retrieve all transactions in the history of mining.

Hash Rate in Bitcoin Mining Profitability

A hash rate is the miner’s computing power. The more miners, the harder it becomes to solve puzzles and earn rewards. It’s basically an arms race using your computing power as ammunition. Those with the most computing power (hashrate) eventually win the race.

How to Calculate Bitcoin Mining Earnings

Despite the claims that mining bitcoin is expensive, the results outweigh the cost. Most media outlets will sing songs about how bitcoin mining raises electricity costs. You have to be fully invested when mining crypto.

Bitcoin mining machines, commonly referred to as ASIC, generate a $10 daily profit. When you compare this to Ethereum mining, Bitcoin is highly profitable. An example is the Whatsminer M21S which currently generates $10 in daily profit.

Ethereum mining uses graphics cards; thirteen of these cards cost the same as one Whatsminer M21S.

Is there any tax on Bitcoin Mining profitability?

Profiting in Bitcoin isn’t certain, just as like any other investment. You have to pay taxes for your Bitcoin reward. As a miner, you have to know the Bitcoin taxes in your area. Using Crypto tax software helps keep track of the current market conditions. To profit from Bitcoin mining, you have to understand the variables fully.

One of the most important aspects of Bitcoin is the product itself. You have to know the Bitcoin price as it affects all miners. Here are the important factors that separate profitable miners from the rest.

Having an efficient mining hardware

The price of mining hardware depends on the manufacturer. It also depends on the energy the miner uses and the computing power it brings to the table. A miner with more computing power means more bitcoin mining. With low energy consumption, you get low running costs.

When thinking of buying a new miner, you should check the machine’s longevity and profitability. Longevity is the quality of the miner, while profitability is the machine’s price per Terahash.

Once you see that the hosting cost is low, it makes sense to price over electricity expense. The low operational cost will help mitigate the low efficiency of your machine.

Second-hand miners are no longer profitable, and it’s best to go for brand new mining machines. If you want to compete with large-scale miners, it’s best to join them. Just send your machine to them and earn profit without any running expense.

Know the electricity rates in your area

Electricity rates vary with each country or region. Most first and second-world countries charge less for industrial electricity. Industrial electricity is low to foster economic growth in the country. That’s the reason to join a reputable mining pool, as this is ideally an industrial setup.

A mining farm in Russia will probably pay less in terms of electricity than in the United States. In places search as Germany, the electricity is high than in almost all European countries.

Running a Whatsminer M21S a month will incur an electricity cost of $240. There are areas where the electricity rate is high, and using this miner makes no sense.

Using reliable mining pools

Today’s mining world requires that you join a reputable mining pool. Whether you mine using one machine or several, joining a mining pool is profitable. With the network of Bitcoin mining machines increasing, it also increases the chances of finding a reward.

Some of the most reliable mining pools are F2Pool and SlushPool. These two also happen to be one of the oldest mining pools we have in the industry.

Selling your coins

One area where most miners overlook is the aspect of selling the minable coin. As the owner, you will incur fees for selling Bitcoin. A small-time miner will have to sell coins at retail exchanges. These exchanges have varying transaction fees depending on the market conditions.

Professional miners will take advantage of deals with OTC desks. Depending on market conditions, they will sell coins at little to no fees. These professionals have leverage as they deal on a large scale.

The Professional vs. the Amateur

It’s becoming ever difficult for individual miners to get their hands on profitable mining equipment. Most miners will face problems competing with established miners. That’s why we recommend joining mining companies or mining pools.

Verdict of Bitcoin Mining Profitability

For the average home miner, profiting with Bitcoin is highly unlikely. If in the future ASIC mining hardware reaches the diminishing point, the situation might improve.

You can try and use cheap and sustainable power solutions and lower electricity costs. Miners are now turning to solar panels and other cost-effective power solutions.

If more and more small miners enter the mining arena, it will increase decentralization. After all, that’s the original intention of Bitcoin inventor Satoshi Nakamoto.

Why CPU Mining is not profitable

CPU mining has never been profitable, and only the first miners got the chance to earn small profit margins.

It would be best to have an ASIC miner stand a chance of profiting from Bitcoin Mining.

A proven alternative is joining a crypto mining company that offers the chance of mining Crypto. Get a head start and use the best Crypto mining companies. At no running cost, you get to reap the benefits once the market favors your invested coin.

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We wish everyone a happy and profitable mining experience.