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Is Bitcoin Mining Profitable or Worth it?

By Teresa1995 | DigiLife | 29 Mar 2021


Bitcoin mining began as a well paid hobby for early adopters who had the chance to earn 50 BTC every 10 minutes, mining from their bedrooms.

Successfully mining just one Bitcoin block, and holding onto it since 2010 would mean you have $450,000 worth of bitcoin in your wallet in 2020.

Ten years ago, all you needed was a reasonably powerful computer, a stable internet connection and the foresight of Nostradamus. These days, thanks to industrial bitcoin mining operations, it’s not such a level playing field and for a lot of people it makes more sense to simply buy some bitcoin on an exchange like Coinbase.

 

If you’re motivated to learn, and you want to get a semi-passive income of bitcoin, then there are a few basics to get your head round, before working out if it’s even possible for you to profit from bitcoin mining.

Mining is the backbone of all proof-of-work blockchains and can be described with three key concepts:

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Transaction Records

The verification and addition of transactions to the public blockchain ledger. This is where you can view every single transaction that has ever occured in the history of the blockchain.

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Proof-of-Work Calculations

The energy-intensive puzzle that each Bitcoin mining machine solves every ten minutes. The miner that completes the puzzle before anything else adds the new block to the blockchain.

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Bitcoin Block Reward

Rewarded with 6.25 bitcoins. This number will reduce to 6.25 bitcoins after the halving in May 2020. The reward (plus transaction fees) are paid to the miner who solved the puzzle first.

This process repeats approximately every 10 minutes for every mining machine on the network. The difficulty of the puzzle (Network Difficulty) adjusts every 2016 blocks (~14 days) to ensure that on average one machine will solve the puzzle in a 10 minute period.

 

What is Hashrate?

Hashrate is a measure of a miner’s computational power.

In other words, the more miners (and therefore computing power) mining bitcoin and hoping for a reward, the harder it becomes to solve the puzzle. It is a computational arms race, where the individuals or organizations with the most computing power (hashrate) will be able to mine the most bitcoin.

The more computing power a machine has, the more solutions (and hence, block rewards) a miner is likely to find.

Kilohash KH/s (thousands of Hashes/second) Megahash MH/s (millions of Hashes/second) Gigahash GH/s (billions of Hashes/second) Terahash TH/s (trillions of Hashes/second) Petahash PH/s (quadrillions of Hashes/second)

 

Software and Services Related to Cryptocurrency Mining Software

 

Cudo Miner provides a simple-to-setup, highly profitable way to mine cryptocurrency, with features unmatched by other leading mining software.

BTC-Miner allows you to mine Bitcoins right in your Browser and multiply your income by using our referral program.

MinerGate is a mining pool created by a group of cryptocoin enthusiasts. It is the first pool which provides service for merged mining. This means that while mining on our pool you can mine different coins simultaniously without decrease of hashrate for major coin

BetterHash is a cryptocurrency miner. It uses the power of your PC to validate cryptocurrency transfers. You may think of it like a "virtual notary". Depending on your CPU and video adapter performance, you can earn hundreds of dollars each month.

 

Conclusion

The average home miner is unlikely to recoup the cost of mining hardware and electricity. Profiting on your own is highly unlikely.

The situation may improve in the future once ASIC mining hardware innovation reaches the point of diminishing returns. That, coupled with cheap, hopefully sustainable power solutions that retail customers can access in some shape or form, may once again make Bitcoin mining profitable to small individual miners around the world.

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