Money can be made, but no method guarantees profit
By Emanuele Pagliari - 12 Sep But how much does it cost to mine a bitcoin? What is the profit margin of miners? According to a recent study , the price of bitcoin in recent weeks allows most miners to generate substantial profits , given that the real cost of mining a bitcoin has been estimated at between and dollars , which is well below the current 10 thousand dollars per BTC. This cost obviously depends on the equipment used for BTC mining, as there are different solutions with different degrees of efficiency.
Another important factor is certainly the cost for energy, which in the study was set at 0. The most expensive solution in terms of electricity costs is certainly the old Bitmain Antminer S9. It has been estimated, in fact, that mining a bitcoin with such a device costs more than 7 thousand dollars in electricity, assuming a cost of 0. As reported by those who carried out this study, the estimate is based on the use of a single ASIC for the mining of a BTC , an operation that, depending on the model, could require up to two years.
The devaluation costs of the device over a month lifespan are also taken into consideration, so as to obtain an even more realistic estimate. By opting for more modern products, thus more efficient and with higher hashrates, the cost of mining a bitcoin naturally drops considerably, but the one relative to the devaluation of the device increases. After all, today the old Antminer S9 devices are sold for less than dollars , while the latest high-efficiency ASICs are close to dollars.
However, considering the reduced energy consumption with the same number of hashrates, the cost in terms of electricity falls significantly, falling below 3 thousand dollars for the most recent and efficient models.
As a result, the total cost necessary for bitcoin mining decreases, which can easily reach only dollars. This study is obviously only an estimate.
There are in fact too many factors to consider, including the cost of electricity, which in many parts of the world is much higher than that analysed 0. While in countries such as China, South America and many other Asian locations, electricity can cost even less than cents per kWh, significantly raising profits for the miners. Finally, the study takes into consideration that the ROI, i. Telecommunications engineer with a strong passion for technology.
His adventure in the world of blogging started on GizChina. Emanuele is in the world of cryptocurrency as a miner since and today he follows the technical aspects related to blockchain, cryptography and dApp, also for applications in the Internet of Things.
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Emanuele Pagliari Telecommunications engineer with a strong passion for technology. Related posts More from author. The Cryptonomist Italia. More Stories.
In the midst of the recent bitcoin fever, many have been tempted to take their savings from under the mattress and join the ranks of crypto-investors. Other crypto-enthusiasts have acquired the necessary equipment to start mining bitcoin from home. The idea of just plugging your computer or a specially designed mining farm into the internet and creating money out of thin air sounds extremely attractive for many people across the world. But what expenses can arise out of mining process? How much does it cost to mine bitcoin, and where on Earth can we find the cheapest place to start mining?
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Cookies are used on this Website. This is necessary in order to remember your preferences, as well as to collect analytical data about visits to the Website. Use of our Website means that you agree to the use of all cookies and analytics of Website visits in accordance with Bitnewstoday. According to the analytical publication Elite Fixtures, which published the calculation of current cost of mining Bitcoin, it takes about 18 months to extract one coin using AntMiner S9 equipment, while the energy costs will be about 18 thousand kW; on AntMiner S7 BTC will be created within more than 4 years, energy costs will be about 46 thousand kW; on Avalon 6 Bitcoin mining may occur over 6 years, energy costs will account for over 55 million kW. This way, to calculate the cost of mining 1 Bitcoin, you should consider the cost of electricity. If a cryptocurrency miner uses AntMiner S7, then he will have to pay Usage of Avalon 6 can completely ruin a miner as he will have to pay In this case, the profitability of Bitcoin mining remains extremely doubtful, as the price of a coin is much less than the costs incurred. We have examined several countries and now can draw conclusions on the cheapest country for Bitcoin mining — and this is Uzbekistan see the table at the end of the article.
Calculating Mining Profitability
The world's most popular cryptocurrency by market cap is now most often mined by what does it cost to mine bitcoin or large-scale operations running multiple rigs. Many individual miners have found that the cost of building a computing rig powerful enough to keep up in the process is simply unfeasible. Nonetheless, some areas have emerged as mining hubs for various cryptocurrencies, thanks in large part to available space and the cost of electricity.
Now, one recent study, cited by bitcoin. The results showed that, depending upon where the mining happened, the total cost of mining for one bitcoin might vary dramatically. Given that the price of bitcoin was significantly higher than this rate throughout January ofone might expect to be able click at this page earn a profit off of bitcoin mining in countries such as.
Many island nations have a high cost associated with mining for bitcoin, likely because of associated high costs of electricity in those areas. South Korea is the country with the highest cost. The United States is the 41st-cheapest country for bitcoin miningfalling just behind Russia.
However, within the United States, the price associated with mining varies from state to state. In sum, the report shows that there are areas of the world that are absolutely favorable for mining bitcoin, as well as other areas where the practice is likely not sustainable at all. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions.
Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained. As of the date this article was written, the author owns bitcoin and ripple.
Your Money. Personal Finance. Your Practice. Popular Courses. Login Newsletters. News Markets News. Image: Elite Fixtures. Compare Investment Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Related Articles. Bitcoin How to Buy Bitcoin. Trade With Mexico? Partner Links. Related Terms Blockchain Explained A guide to help you understand what blockchain is and how it can be used by industries.
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Bitcoin Mining. Forget mining. When total hashrate rises, the Difficulty of POW hashing adjusts upwards — and the inverse also applies. Aaron Hankin. As reported by those who carried out this study, the estimate is based on the use of a single ASIC for the mining of a BTCan operation that, depending on the model, could require up to two years. Those virtual miners perform a crucial function within the blockchain, or the decentralized ledger technology that underpins most cryptocurrencies, by solving complex problems to validate transactions on the network, In exchange for this function, which powers miners are rewarded with bitcoins. The photo below is a makeshift, home-made mining machine. MarketWatch Partner Center. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Cryptocurrency mining is painstaking, costly and only sporadically rewarding. It adjusts to hashrate to ensure that blocks are found roughly every 10 minutes. Popular Courses. However, if there are one million mining rigs competing to solve the hash problem, they'll likely reach a solution faster than a scenario in which 10 mining rigs are working on the same problem.