A while ago we took a look at how to make money online by mining cryptocurrencies (Link HERE). We explored some “cloud mining” set ups. In the end I presented Crypto Tab a browser that mines bitcoin while you are browsing.
That article was written before the Halving, so it’s natural to wonder if these mining schemes are still valid and profitable today. Let’s take a closer look.
Some quick background information:
One of the basic and most important features that a cryptocurrency must have is the impossibility of altering the transaction records. Altering the ledger would be the equivalent to counterfeiting in the physical currency world. Therefore, it would make the currency worthless.
Bitcoin achieved this level of security by requiring all transactions to be certified by a neutral third party. Transactions are verified several times to confirm that the records are genuine. The people who verify these transactions are called miners, and they get paid a certain amount of bitcoin for their efforts.
But not all miners get paid equally. Once they have verified a block (1 MB) of transactions they must compete with other miners in the completion of mathematical calculations in order to get paid. That’s where those with higher computing power win out. Miners with slower computers will not get paid quite as often.
The Halving consisted in the reduction of the reward per block in half. Miners used to get 12.5 bitcoin per block but now they only get 6.25 BTC (exactly half).
How has this halving affected miners?
Some miners found their payouts reduced to the point where it seems that it wouldn’t be profitable to continue in this activity. Miners paying higher energy costs, or using older gears just turned off their systems. Data from https://bitinfocharts.com/bitcoin/ shows that total Hash power devoted to bitcoin mining dropped from a level of 137 EH/s on May 11th to just 100 EH/s on June 3rd, having hit a minimum of 84 EH/s on May 23rd.
But while the hash rate has decreased, transaction volume has not seen any change from the pre-halving levels. That means that fewer miners are verifying transactions, leading to less competition between miners to get their block rewards. To sum up, miners are now earning less on each block that is paid, but they are getting to collect on more blocks than before.
My bottom line:
As you can see, the halving had conflicting effects on the mining industry. What’s my personal experience?
My internet use patterns have not changed at all, which means that I have been mining pretty much the same pre and post halving. Mining with CryptoTab I have been collecting 683 satoshis daily, from March until the May 11th halving. My post halving daily average income is now 654 satoshis. That 30 satoshi difference amounts to a 5% reduction in mining output.
So, my profit has been reduced, but considering that my mining is 100% profit, as I am not using any additional resources to mine it is still an excellent Passive Income cryptocurrency opportunity.
