Is bitcoin mining profitable. Is Bitcoin Mining Still Profitable?. 7 Reasons Bitcoin Mining is NOT Profitable or Worth It (2020)

Bitcoin Mining Profitability historical chart

Is Mining Bitcoin Profitable?

If you’ve ever wondered whether Bitcoin mining could be profitable for you, the short answer is “no.” In the early days of cryptocurrency, smaller players could mine Bitcoins successfully; however, now it’s big business, and the equipment you’d need and the electricity costs alone can eat up your profits profitabl. In fact, according to a recent survey, U. S. investors that sold their Bitcoin suffered realized losses of $1.7 billion.

Despite these investment losses, cryptocurrencies are not going anywhere. With thousands of cryptocurrencies developed to date, it can still help to know the ins and outs of Bitcoin mining. More importantly, you’ll also want to understand why it’s not easily profitable.

Evolution of Bitcoin Miners

Although you may be new Is bitcoin mining profitable the concept of Bitcoin mining, it actually started 10 years ago. Mining involves using computers to solve complicated mathematical puzzles, for which you’re rewarded in cryptocurrency. In 2009, there weren’t many Bitcoin miners. In fact, Satoshi Nakamoto, the creator of Bitcoin, was among the very first few miners. At the start, you only needed a computer or two to mine cryptocurrency.

Since that time, mining has increased in popularity. And, as Bitcoin grows in popularity, its math problems become more difficult. This has led miners to increase their computer power in order to solve the problems and receive Bitcoin rewards.

Throughout the years, miners have turned to various technologies to solve mining problems, such as:

Graphics processing units (GPU), which increase processing speeds, compared to a standard computerField-programmable gate arrays (FPGAs), which use less power than a GPUApplication-specific integrated circuit (ASIC) systems, which were created to mine cryptocurrency specifically

Today, the costs of Bitcoin mining equipment can be very high. Before you start buying equipment, be sure to consider both the long-term Is bitcoin mining profitable short-term consequences of your investment.

Bitcoin Mining Profitability

Bitcoin mining has been evolving since the iz. For most, Is bitcoin mining profitable hasn’t been easy to make a profit on. This is due to a variety of factors including:

Bitcoin’s block rewards get reduced every four years. Nakamoto set up Bitcoin’s rewards to be cut in half pprofitable four years. Prrofitable helps reduce the amount that is mined in a year. It also helps make the Bitcoin supply last longer. However, for miners, it Is bitcoin mining profitable getting rewarded less each year. Even when you put in more effort.It’s difficult to mine alone. At the beginning, many Bitcin miners worked alone. As the cryptocurrency grew, larger groups of miners began joining together. These were known as mining pools. They profitablf individual miners a better shot at competing for Bitcoin rewards. Today, many who are interested in mining go straight for one of these groups. However, these pools come with a fee and all rewards get split. This can mean you’ll receive lower rewards overall. Mining has increased in difficulty. As mentioned above, the equations in Bitcoin get harder to solve as more users join the network. This increased difficulty means you’ll need to increase your computer power. To keep up with the necessary miing in computer Is bitcoin mining profitable, you’ll need expensive equipment that can cut into your profits. Equipment to mine also uses a lot of electricity that you need to be prepared to pay for. And, you’ll also need software to run your mining hardware.

Bitcoin Mining Pools

You’ve seen the rewards of teamwork in your life. When it Is bitcoin mining profitable to Bitcoin mining, the same concept applies with mining pools. Through these pools, miners combine their resources to be more effective at mining.

When the pools succeed and receive Bitcoins, they then split the reward. These rewards are split depending on the power each miner used. So, the miner that used the most power earns the largest reward. For small miners, joining a mihing pool can help them be successful.

In recent times, these mining pools have grown so big that they require a whole warehouse to hold all the equipment needed. For example, North America houses one of the largest mining facilities, known as Giga Watt, in Washington. This facility includes over 1,700 GPUs.

You can probably imagine how difficult it would be to go up against big warehouses, like the one in Washington, with your own equipment. Instead, a mining pool to consider is Is bitcoin mining profitable. This was the first Bitcoin mining pool created. To join, all you have to do is visit the website and go from there.

Cloud Mining Bitcoin

If you’re interested in mining for Bitcoins but not ready to buy expensive mining equipment, there is another option. Is bitcoin mining profitable mining allows you to buy time on someone else’s mining equipment. The most popular cloud mining option is to lease processing power on someone else’s equipment at a remote Is bitcoin mining profitable center. Generally, profitabke join a mining pool and then the company that you work with will manage your account. Cloud mining operations typically utilize cloud computing as well. Is bitcoin mining profitable means that their servers, software, and storage can be found on the cloud.

There are both pros and cons involved with how cloud mining works. Some of the benefits of cloud mining include:

Avoiding high electricity costs. Mining equipment is not only expensive to acquire but also expensive to run.Creating less clutter for your home. When you use someone else’s equipment, you can avoid cluttering your own home with large equipment. You also won’t have any ventilation problems from equipment overheating.Not having to sell any equipment later on. If you decide to leave the mining game, you’ll likely want to sell your Is bitcoin mining profitable. This can take some time and effort to find others interested in your equipment. In some cases, your equipment may even become out of date as technology for mining advances.

Some negatives to using cloud mining include:

Being more susceptible to fraud. Before entering any cloud mining agreement, you’ll want to do your research. It isn’t difficult for scammers to set up cloud mining scams. These usually involve taking money up front and not delivering what they promised. One way to research cloud mining platforms is by reading reviews and blogs. Genesis Mining is a popular cloud mining site.Earning less money. You make less money with cloud mining because the equipment operators have to cover their profitaable. This can make investing in your own equipment more profitable.Having less control. When you invest in cloud mining, one advantage is that you don’t have to manage your own hardware. However, you do give up some control over your financial investment. Essentially, you invest in a cloud mining bitcooin and trust Is bitcoin mining profitable they call the right shots. In Is bitcoin mining profitable cases, you just pay a monthly fee for cloud mining services.

If you’re considering making the leap into Bitcoin mining, Is bitcoin mining profitable your strategy wisely. Remember, both cloud mining and mining pools can be good options to consider. Attempting to mine Bitcoins on your own will likely leave you frustrated and out of money.

Scenario 1: Big Chinese Miners

Is bitcoin mining profitable? It is the first question in the mind of every novice entrepreneur trying to make some money through bitcoins? However, the answer to the question may surprise a lot of people and it is yes! And no! Yes, for the people living in areas where electricity prices porfitable cheap and there is no tax bitxoin mining bitcoins and yes for all the other Is bitcoin mining profitable. A simple rule for mining profitability is that the costs of mining one bitcoin, including the electricity prices, the price of the gear and all of the taxes should be less than the price of an actual bitcoin.

READ ALSO: Binance Rumored to be Warming its Way into “Anti-Crypto” China

Let us just look Is bitcoin mining profitable a few numbers, currently, the price of one bitcoin is around 8000 $, and anything under 8000 $ kining mining would be a profitable venture. A company name Elite Fixtures calculated the price of bitcoin mining in countries all over the world. There were countries like Trinidad and Tobago, with the prices as low Is bitcoin mining profitable 1190$ to mine a single bitcoin generating a profit of Is bitcoin mining profitable 7000$ for each bitcoin. Belarus and Bangladesh were also part of the list of countries that had extremely low prices for bitcoin mining.

The study shows that countries that are rich in resources such as hydro-power, as well as oil were the countries with considerably low prices of bitcoin mining. On the other spectrum were Is bitcoin mining profitable with outrageous prices for mining, for example, Belgium (13,842$), South Korea (26,170$) and Marshall Island (15,861$). The countries Is bitcoin mining profitable showed high prices for bitcoin mining were countries with profitablf energy resources and some of the countries were places where bitcoin mining is taxed to generally discourage people from mining bitcoin.

READ ALSO: Belgian Regulator FSMA Adds 9 Websites to its Crypto Scam List

Many of the countries have been trying for a long time to stop people from mining bitcoin as it puts unnecessary strain on the energy grid, the Iranian government has been campaigning against such miners who have been taking advantage of the cheap prices and putting a strain on the local grid.

However, things may look like in different countries, bitcoin mining is becoming increasingly profitable in more and more countries, and with the increase in Is bitcoin mining profitable price expected to happen after the halving event, it may even become profitable in countries where it is very far from profitability. If you want to mine bitcoin and live in a country with low prices, Congratulations! And if you don’t, strap on my friend you’ll have your turn soon.

Data Shows Bitcoin Miners are Now Unprofitable; Here’s What This Means for BTC

Is it worth mining Cryptocurrencies in 2020?

What to mine and how to mine? Mining cryptocurrency is dead, they say.

There are many ways to mine crypto, but which cryptocurrencies are the most profitable? Should you buy a mining rig yourself or do cloud mining? How to calculate the profits? Is bitcoin mining profitable will discuss all that and compare the three main ways Is bitcoin mining profitable see which one is the most profitable.

So what is cryptocurrency mining?

Mining is the process of validating other user’s transactions (e. g. bitcoin transactions) with a computer and then adding them to the blockchain. As a reward, miners receive cryptocurrency.

3 Main Ways to Mine Cryptocurrency ⚡

GPU mining (mining on video cards)ASIC miningCloud mining

1. GPU Mining 

GPU Mining is using video graphics cards to mine cryptocurrencies. Here's a guide to help you choose the best graphics cards for mining. Some of the most popular GPUs are NVIDIA GTX1060, GTX1070 and GTX1080Ti as well as RADEON models RX470/RX480 RX570/RX580. Should be noted that RADEON GPUs consumes more electricity but are generally cheaper Is bitcoin mining profitable NVIDIA GPUs. In terms of performance, Is bitcoin mining profitable GPUs are generally better. However, any GPU performance highly depends on the price of Is bitcoin mining profitable. Thus, all aspects should be taken into account.

Most crucial factors of the mining process

Cost of electricitycryptocurrency priceslevel of mining difficultyGPU performance (hash rate per watt)

Crypto investor’s essential: break-even point of the investment

Another significant issue that smart investors would consider is the cost of mining equipment (mining hardware). The cheaper you manage to buy the mining rig, the faster your investment will be paid off. Don’t Is bitcoin mining profitable that the price must not be your only factor when making a final decision on mining hardware. Having a warranty in case the GPU or any other part will fail is essential. Otherwise, there will be a need for extra investment.

How to start mining Ethereum?

Ethereum is one of the most popular altcoins for mining, we will briefly describe how the process looks.

First, you need to get a mining rig, see list of all components required to build your first one below. Second, you must configure BIOS correctly, install OS and required software. Third, specify details of the mining pool and your personal cryptocurrency wallet (the one you will get proceeds to).

Note, currently Ethereum is running proof of work system which makes it possible to mine, but it was announced that the proof of stake system to be introduced in the future. Plan still officially remains, so Ethereum miners should be aware that it will impossible to mine once the new protocol is updated.

That’s it, you are good to go. Further, we cover some specific aspects you should be aware of while getting your mining rig ready.

What hardware do Is bitcoin mining profitable need to build your own mining rig on video cards?

In order to build your first mining rig, you will need a case/chassis (it can be bought online or you can make it yourself) and mining hardware, which includes:

Motherboard (number of active PCI slots must not be less than the number of GPU you plan to employ)Storage: SSD disk (16gb is enough for LINUX)RAM (4GB) PSU (power supply depends on the mining rig, see next section for details)Processor (any that is suitable for chosen motherboard)Risers (PCIe Riser is used to provide additional space for GPUs. It is often the basic component of the multi-GPU mining rig, as the PCIe riser actually provides the additional space to place multiple GPUs in the GPU mining rig.)Video cards (cards with higher computing power will ensure higher hash rate and thus higher rewards)Wattmeter (to monitor actual power consumption on the power socket)

As you can see it is generally the same list as if you were building a PC.

How to calculate the required Power Supply for mining with video card?

It is important to calculate how much power you need to supply your GPUs. So here is an example of Is bitcoin mining profitable you can calculate it.

EXAMPLE RIG: 6 Video cards NVIDIA GTX1070

General system will require 150wGPUs: 120w x 6 = 720wRisers 60w x 6 = 360wTotal: 150w + 720w + 360w = 1230w

Thus, you need either 1 power supply with at least 1200w or 2 power supplies connected together, where each is at least 600w.

Having that in mind, you can check what are the best pricing options you can get, as the cheaper, you can get the mining rig, the faster you can get it paid off reaching the break-even point on your investment.

Which OS and mining software to choose for mining with GPU?

Most popular options of OS for miner are:

Windows 10HIVE OS (Linux modification for mining)ETH OS (Linux modification for mining)

We will not go deep examining the advantages and disadvantages of each OS, Is bitcoin mining profitable, we will only share our experience. Having Windows for mining sounds attractive, but in reality, this is probably the most unstable and complicated option if we dive into details. However, it is probably the least scary option if you want to try mining with your existing PC to see how it generally works Is bitcoin mining profitable get a concrete understanding.

HiveOS is a relatively new option which is free to connect first 3 mining rigs and is quite straightforward to set up and to run. After you run the Is bitcoin mining profitable rig with pre-installed HiveOS Linux build the process will ask you to connect the mining rig you’ve created in your online cabinet. Then, all configuration and management happen online.

Once you set up the OS you will need to install a mining software, choosing the most popular is a safe and stable option:

Choosing more Is bitcoin mining profitable altcoins for mining may require less popular mining software.

Best Cryptocurrency to Mine with GPU in 2020?

Most profitable altcoins Is bitcoin mining profitable your GPUs can change any day, any time as it involves a number of factors, but most importantly it will depend on the price of the altcoin. You Is bitcoin mining profitable check https://whattomine. com to see most profitable altcoin for your mining rig.

Still, apart from using available mining profitability calculators, we suggest thinking long term. Ethereum is altcoin No1 of cryptocurrency industry with a strong team behind and relatively long record. We’ve seen the price of Ethereum reaching 1300 USD in January 2018. Mining Ethereum may not be the most profitable option today, but if you hold your mining rewards and sell later at highs, what would be with your mining rig’s profitability? Yes, it will be higher.

Overclocking a Mining GPU optimally

Your overclocking strategy may change if you have cheap electricity or willing to get as much crypto as fast as you can (in that case you may want to consider simply buying Bitcoin or Ethereum on the market). General idea to keep in mind, the higher you set the overclocking the more power your mining rig will consume. Thus, make sure that the extra hash rate will still make sense because your electricity costs will increase.

Search for optimal settings online carefully, as it may allow you to both increase hash rate and reduce power consumption.

How to Choose a Cryptocurrency Mining Pool?

Your main concern with regards to mining pool should be its size and capacity to operate stably. We recommend to start with: 

Is it too late to start mining Ethereum?

It may be late for some people and still fine for others. Other things being equal, the cost of electricity should be your first concern. If you are lucky to be living in a country with cheap electricity (less than 0.1 USD kWh), then it may be a good idea to consider mining as an investment.

Cryptocurrency Mining in 2020: Is It Profitable and Should You Is bitcoin mining profitable take an example, imagine you’ve built a mining rig with NVIDIA GTX 1070 video cards. Now let’s take a look at a fair result of the miner:

Price of mining rig hardware: 3000 EUR

Target altcoin for mining: Ethereum

Altcoin price on the market: 280 Is bitcoin mining profitable per 1 ETH

Hash Rate: 180MH/s

Reward per 24h: 0.0144 ETH

Reward, 30 days: 0.432 ETH

Electricity expenses (kWh): 518

Cost of electricity: 77 EUR (at a cost of 0.15 EUR per kWh) 

Revenue per month: 121 (current price of Ethereum is 280 EUR)

Profit per month: 44 EUR

Calculated at Is bitcoin mining profitable mining calculator WhatToMine

If the price of Ethereum is Is bitcoin mining profitable then it will take 68 months to reach a break-even point on your investment. However, if you accumulate all proceeds and in case Ethereum costs 600 EUR in Is bitcoin mining profitable months, then your electricity expenses would be 462 EUR, while rewards would be equal to 1555 EUR, which leaves you with 1093 EUR of profit for a period of 6 months.

In case the price of Ethereum will reach 1000 EUR in 6 month and you sell your accumulated Ethereum, then your profits would be 2130 euro, which makes it a lot more attractive, right?

You can see that Is bitcoin mining profitable scenario highly depends on your price expectations and strategy you follow while mining.

Mining is obviously a risky thing, but in some cases, it can be highly profitable.

Pros

GPU can be sold easier than ASICEasy to switch Cryptocurrency (having a huge choice of altcoins to mine)Reprogrammable

Cons

High Power Consumption for typical householdsEasily Affected by Disruptions (not too stable)Needs a PCRequires hardware knowledge if you are going to maintain it yourselfRequire less Mining Power than ASICs

2. ASIC Mining

ASIC mining is using Application-Specific chips to mine. That alone tells you, that you will not be able to switch between the high number of cryptocurrencies when using this mining method. Each ASIC is capable of mining only on a specific algorithm. For example, Bitcoin is based on SHA256 algorithm Is bitcoin mining profitable apart from mining Bitcoin, it is also possible to do mining of other coins, for example, Bitcoin Cash.

Largest ASIC producers:

ASIC profitability example

To see if ASIC mining can still be profitable let’s look at the latest miner – Bitmain’s Antiminer S17, a powerful bitcoin mining hardware.

Price of miner: 2410 euro for pre-order in 6 months (at the moment of review)

Cryptocurrency: Bitcoin

Is bitcoin mining profitable rate: 53TH/s

Bitcoin reward per 24h: 0.00172 BTC

Bitcoin reward, 30 Is bitcoin mining profitable 0.0516 BTC

Electricity expenses (kWh): 1512

Cost of electricity: 227 EUR (at Is bitcoin mining profitable cost of 0.15 EUR per kWh) 

Revenue per month: 557 EUR (current Is bitcoin mining profitable of bitcoin is 10800 EUR)

Profit per month: 330 EUR

Calculated at bitcoin mining calculator – WhatToMine

In this example, we get a break-event period at 7.3 months in case the Bitcoin price stays the same. This is the latest mining ASIC which is quite difficult to get right now, currently, you have to wait for 4-6 month depending on reseller.

To conclude, mining most popular cryptocurrency Bitcoin looks pretty attractive, especially if the Bitcoin price will grow even further.

Pros

ASIC mining is easier to start than GPU miningHighest power consumptionLatest ASIC can become outdated faster than the latest GPUsNo PC neededLess chance of disruptions compared to GPU miningPlug and play

Cons

List of cryptocurrencies to switch to is shortNeeds proper Cooling. Generally, ASICs produce a lot more heat than GPUs. Can be hard to sell, if it’s not the latest model of ASICProfitability highly depend on Bitcoin priceDifficulty can be increased at any time if large players come (unlike GPU mining, ASIC mining can easily be scaled and controlled, thus it happened to be highly attractive for large investors, which eventually shows a significant impact on the bitcoin network mining difficulty)

3. Cloud Mining

Cloud mining is when you rent hashing power from a mining company and they do it all for you. You don't have to worry about electricity or finding a place for the equipment. It is very easy and cheap to start. But we do it for profits, so which is more profitable? 

 

Main profit factors:

Cost of electricity (the cheaper the electricity the more profit you get)Mining rewards (the more mining reward is the more profit you Is bitcoin mining profitable of cryptocurrency (higher price makes more profit)Cloud mining fee (for cloud mining only, higher fee means lower profit)Mining difficulty (higher is the mining difficulty, the lower will be the mining reward, hence lower profit)

If you do some research, the public opinions about cloud mining are Is bitcoin mining profitable too great. The cloud mining Giants:

These are the biggest players in the cloud mining game, which can offer you the best deals. The thing about mining is that the profits are not stable, so it's hard to tell how much exactly will you earn. The value of a cryptocurrency being mined is constantly changing. It also depends on how much mining power are you renting.

Note, with the most stable mining companies the entry investment barrier is significantly higher. Most of the companies who targeted retail and offered to start with investments of 500 USD are gone now.

Profit Formula of mining

Calculate how much of a specific currency will you mine and follow the value of it. WhatToMine is a great tool to calculate mining profits. It may look complicated at first, here's a guide telling you how to use it. Once you know your mining Is bitcoin mining profitable, find out Is bitcoin mining profitable electricity costs and how much power your mining hardware power consumes. Then, subtract the bills from the mining yields and what's left is your profit. 

Where do I get proceeds from mining?

It may be very obvious for those who have already tried mining or is deep into crypto but Is bitcoin mining profitable you are new, it might not be that clear – “how, where and when do I get my rewards for mining”.

First, as you set up your mining rig, you will define to which address you will receive the mining reward. Second, as you will successfully do mining your balance on the mining pool will be increasing. Once you reach the minimum level, the pay-out will be made to your account. Thus, depending on the results of your mining rig you will be receiving accumulated rewards every time threshold is reached.

With cloud mining, it works in a similar way but terms can differ from company to company.

Do I need to pay taxes on mining?

Depending on a place you live you may need to pay tax on rewards you get from mining. In most countries, you would need to pay tax on income. Is bitcoin mining profitable, in most countries, cryptocurrencies are still not legalized, thus unless you sell your mining rewards and receive fiat money (USD, EUR, GBP, etc.) to your bank account, you may be exempt of taxes (this is a not a financial advice, please confirm with your State Tax Office for details).

Read more on mining taxation in the US, UK, Japan and Russia in this guide.

What should I do with the mining rewards? Hold, Trade or convert to fiat?

Simple but important aspect: as soon as Is bitcoin mining profitable sell your cryptocurrency you fix your gains or losses. In case you decided to follow a holding strategy, you always have to keep in mind that you would be holding your crypto assets up to the point at which you would like to spend them. Therefore, your potential gains or losses would depend on the point of entry and exit of your investment. In case you believe in short term growth, you should probably exit once you believe crypto has reached its peak and re-enter in your investment positions at better/lower price. 

Apart from the typical question of whether you should hold or sell, there are alternatives. First, Is bitcoin mining profitable can learn to trade and try to make more crypto. What’s great about the cryptocurrency market is that you have tonnes of cryptocurrency pairs, so you can trade ETH against other Is bitcoin mining profitable with the aim of the increasing amount of Ethereum. This is especially positive thing as cryptocurrency trading against fiat on both bullish and bearish market sentiments is a very risky thing.

Second, you can go for social trading, which essentially employs the idea of copy-trading behind it. On a typical social trading platform, there are two groups of users, crypto traders on the one side and beginner traders (also know as copy-traders or investors) on the other. Traders simply trade through the platform (like Wunderbit Trading) and try to show as best statistics as they can, while Investors are screening through the Traders’ list and try to select the best performer.

Once the best match to the risk and reward appetite is found, Investor can then start to follow and copy trade the Trader. Copy-trading (also known as mirror trading or shadow trading) allow Investor to automatically execute the same trades as the Trader.

There are differences across platforms, almost each has its own interpretation of social trading and technical functionality. It’s yet great to have such a variety of options, thus allowing to invest your crypto and make it work.

Note, some platforms allow to make the whole simulation but every trade is made against a broker. In such cases, it’s always a bet, where you can make more of fiat money or less. Still, there are platforms that are built on top of exchanges (e. g. Binance and Kraken), which means that behind each trade there will be your crypto.

Wunderbit Trading is a typical crypto social trading example of a platform that is built on top of the largest crypto exchange – Binance, where Investors don’t send their holding to anyone, they simply connect API to allow Wunderbit's Trading platform to copy trade of the Trader that Is bitcoin mining profitable selected by the Investor.

Conclusion

To summarise, mining can still be a great way to profit from cryptocurrencies. Mining is not dead.

Today is 5th July 2019, cost of Ethereum (one of the most popular coins to be mined on GPU) is 290 USD. In countries, where the cost of electricity is higher or equal to 0.24 USD mining, mining profit is zero, if the cost is lower, you are in profit. Few examples.

Countries with the cheapest electricity include Ukraine, where 1 kWh costs only 4.1 cents USD meaning that running a six-card mining rig of NVIDIA GTX1070 would profit you a 3.46 USD daily (per month 103.8 USD), thus if the mining rig was bought for 2000 USD (price of pre-owned mining rig), then it would take you 19 month to break-even your investment.

Source: https://ec. europa. eu/eurostat/statistics-explained/index. php/Electricity_price_statistics

Another great way to profit from cryptocurrencies is to start trading. Although trading crypto is not easy, some say that crypto trading is the Is bitcoin mining profitable strategy you can follow right now, since mining difficulty has increased significantly and the cryptocurrency value is not that high.

Thank You for Reading!

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