Calculating Bitcoin Mining Profitability | How to Calculate Bitcoin Profit.
Bitcoin (BTC) mining profitability is something that is always in flux. With Bitcoin Core having such a high difficulty and large total hashrate, at times profitability can come down or go up, in both, Bitcoin profitability can be calculated.
The first needed set of data used for discovering if Bitcoin Core mining is profitable for you or not is the following but not limited to:
- cost of Bitcoin Core ASIC miner(s)
- cost of electricity to power miner (how much you are charged per kwh)
- cost of equipment to run the miner(s)
- costs of other supporting gear like shelving, racks, cables, etc.
- cost of building or data center if applicable
- cost of PSU (power supply unit)
- cost of network gear
- cost of internet access
- key value of BTC over the life of the miner
If the above factors are taken into account, it will give you a rough return on investment (ROI) date, which is the date by which all the components are paid for by your mining earnings.
Several are reoccurring though like electricity costs, internet access, and building or data center costs if applicable.
As noted the key to achieving Return on Investment (ROI) is the value of Bitcoin Core, as we all know it is has high volatility, sometimes with extreme swings.
This can make calculating profitability problematic at times.
How To Calculate Mining Profit: The Easy COMPLETE Guide!
Your goal is to mine bitcoin at its current value as efficiently as possible. This means buying the most up to date equipment when you are buying it unless you can get some ASIC that is a generation or so back that is cheap enough that still makes more in bitcoin than is costs in electricity.
Newest gen Bitcoin Core ASIC miners are usually more powerful using less power per gh/s.
With the rising difficulty it can also cut into your profits if you are taking less of a share of the block rewards due to rising total hashrate. The difficulty goes up or down based on how fast or slow block times are. Block times are the time it takes for a transaction set to be recorded and the hash created on the blockchain.
Bitcoin Core targets for a ~10 minute block time and will reset roughly every two weeks based on the average time to solve (process) a block.
If in the time period more miners are added to the network that allows a block to be solved in less than ~10 minutes it means that the difficulty will go up to slow the block generation to ~10 minutes.
If enough hashrate has left the network and blocks are being solved in more than ~10 minutes the difficulty will drop allowing the miners to process blocks in roughly ~10 minute intervals.
You will want the hashrate to be fairly stable as that will keep the amount of bitcoin you receive for mining roughly the same. If the BTC value holds steady or goes up as well it will help as well.
How Bitcoin Mining Profitability Works
As you can see Bitcoin Core profitability is a moving target so be vigilant in monitoring your costs each month to mining rewards and their value at the time of receiving.
Keep an eye on mining pool fees as some are free and others are not with a percentage or more added into the cost of your mining.
The higher BTC’s value goes the longer you can run your mining gear profitably as long as the total hashrate does not keep going up as well causing the difficulty to keep your earnings even or even down as time goes by.
While running your own mining equipment can be fun and at times profitable it is not always something you can do at home.
Miners generate plenty of heat and noise. That needs to be taken into account for where you are going to place your miners.
Most cannot be run in the house unless you have a garage, basement or room that can handle the heat and noise. In this case you may want to host your miners in a data center or some other suitable place.
If you want to be able to mine without the hassle of the physical miners themselves you can use a cloud mining or hosting service.
Kingsley Odia is a serial Blogger, Writer, and Digital Marketer in Nigeria with interest in creating solution to wide ranges of searches from internet users across the globe.