I've been involved in crypto mining for nearly ten years. I mined Ethereum profitably for five of those years, and for the last five years, I’ve been focused on Bitcoin. My preferred approach has been to purchase ASICs and host them in dedicated data centers, paying a monthly hosting and electricity fee.

While I’ve successfully accumulated some BTC through this method, I’ve long had a nagging suspicion: "would I actually have been better off simply buying Bitcoin directly on the spot market?"

To test this hypothesis, I ran a simulation. I modeled what would have happened if I had instead used the same capital each January from 2021 to 2025 to buy the latest generation Bitmain Antminer and run it continuously for three years in a hosted environment at $0.07/kWh. I then compared this to a strategy where I simply purchased BTC with the upfront capital cost on January 1st, and used the monthly hosting fee to dollar-cost average (DCA) into BTC at prevailing prices.

The simulation includes conservative forward projections for 2025/6/7 difficulty increases for the more recent models. I then annualised the outcomes for easier comparison: annualised BTC mined, annualised BTC bought, and total annualised costs (including capital and hosting). The results are summarised below:

In every case, the BTC accumulation is greater through a buy-and-hold strategy than through mining. In 2021, for example, I would have ended up with roughly 25% more BTC through DCA. The difference becomes even starker in later years, with mining yielding less than half the BTC that could have been purchased using the same funds in 2023, 2024, or 2025.

So why mine at all?

The reality is that mining is profitable — just not necessarily for the miner. Hosting companies typically earn a small but consistent margin on both the electricity they sell and the ASICs they provision, often sourced directly from manufacturers at wholesale prices.

But for individual miners, the justification must go beyond pure ROI. Mining contributes to Bitcoin’s decentralisation and network security. For many, this ideological benefit is a core motivation.

Additionally, mining offers privacy. The BTC you mine is sent directly to your wallet — untouched by centralised exchanges or KYC procedures. This BTC is often referred to as "pristine" — not tainted by any transaction history that might flag it in future regulatory frameworks. While Bitcoin is fungible, it's not inconceivable that future restrictions could create informal tiers of BTC based on origin and history.

Finally, there may be tax or jurisdictional benefits to acquiring BTC via mining instead of purchasing on an exchange — though this depends heavily on local regulation.

While I admit some of these arguments stretch beyond hard economics, they do offer valid reasons why someone might still choose to mine despite underperformance in BTC accumulation terms.

What’s clear, though, is that anyone considering mining today needs to understand the full picture. Mining may still be a personal or strategic choice — but it’s no longer the straightforward financial win it once was.