Daily Profit Mining

Daily Profit Mining – What is Bitcoin Mining? Is bitcoin mining profitable or worthwhile in 2023?

Bitcoin mining started as a well-paying bedroom mining hobby for early adopters who could earn 50 BTC every 10 minutes.

Daily Profit Mining

Successfully mining one block of bitcoins and holding it since 2010 means you have $450,000 worth of bitcoins in your wallet in 2020.

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If you are motivated to learn and want to earn semi-passive income with bitcoins, you need to consider some basics before deciding whether or not you can make money from mining bitcoins.

Miners are rewarded with 6.25 bitcoins. This number will decrease to 3,125 bitcoins after the halving in 2024. The reward (plus transaction fees) is paid to the first miner to solve the puzzle.

This process is repeated approximately every 10 minutes for each mining machine on the network. The puzzle difficulty (network difficulty) is adjusted every 2016 blocks (~14 days) to ensure that one machine solves the puzzle in 10 minutes on average.

Mining rigs are special computers designed exclusively for bitcoin mining. The more powerful and energy efficient your hardware is, the more profitable bitcoin mining is.

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In other words, the more miners (and therefore computing power) have to mine bitcoins and hope for a reward, the harder it is to solve the puzzle. It is a computer arms race in which individuals or organizations with the highest computing power (hashrate) can mine the most Bitcoins.

The more computing power a machine has, the more solutions (and thus block rewards) a miner can find.

In 2009, hashrate was initially measured in hashes per second (H/s) – due to the exponential growth of mining, H/s was soon pre-defined by the following SI units:

To put this in perspective, let’s look at how much 1 TH of power earns from mining bitcoins. As the global hashrate usually increases, the income per TH per miner usually decreases – and the income table for 1 TH/s looks like this:

Reasons Bitcoin Mining Is Profitable And Worth It (2023)

When you consider how many TH/s there are in the entire Bitcoin network, you get a real sense of the scale of the industry:

Regardless of the media hype, it is true that the main cost of mining is the energy used. To be profitable, mining revenue must exceed these costs, plus the initial investment in mining equipment.

As of February 2022, a single Bitcoin mining machine (commonly known as an ASIC) such as the Whatsminer M20S will generate approximately $12 in Bitcoin revenue per day, depending on the price of Bitcoin. If you compare it with the mining revenue for other cryptocurrencies like Ethereum for example, mining with graphics cards, the mining revenue of Bitcoin is twice that of mining with the same number of GPUs you can buy for one ASIC, you can see that they is a lot. . Thirteen AMD RX graphics cards cost the same as one Whatsminer M20s.

This graph shows daily bitcoin mining earnings. It does not take into account the daily cost of electricity to operate the mining machine. Your capital expenditure will be the difference between making a profit or losing money. GPE mining for Ethereum is more efficient than Bitcoin mining with an ASIC machine

How To Calculate Bitcoin Mining Profitability

You can think of it as a decentralized Paypal for miners. Allowing all transactions to be recorded correctly and earning money to run the system.

Bitcoin miners earn bitcoin by collecting so-called block rewards, fees that bitcoin users pay to miners to securely and reliably record their bitcoin transactions on the blockchain.

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About every ten minutes, a certain amount of newly minted bitcoins are awarded to whoever has the fastest mining machine to discover a new block.

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Originally in 2009, Satoshi Nakamoto set the mining reward at 50 BTC and also encoded future reductions in the reward.

The Bitcoin code is predetermined to halve this fee approximately every four years. It was reduced to 25 BTC at the end of 2012, and to 12.5 BTC in mid-2016.

Another source of income for bitcoin miners is the transaction fees that bitcoiners have to pay when they transfer BTC to each other.

This is the beauty of Bitcoin. Every transaction is recorded in an immutable blockchain that copies to every mining machine.

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Bitcoin does not rely on a central bank for record keeping, these records are kept by the miners themselves and they retain a share of the transaction fees.

Of course, although it is not clear whether you will make a profit by mining bitcoins, you have to pay taxes on the mining rewards. Every miner needs to know the relevant bitcoin mining tax laws in their area, so it is important that they use crypto tax software to keep track of everything and make sure they are making enough money even after taxes. .

First, there are many variables to Bitcoin mining. Therefore, buying bitcoins on the stock market can be an easy way to earn money. However, when done effectively, it is possible to earn more than just buying and “farming” (a term used to describe the act of not selling bitcoins).

One of the most important variables for miners is the price of Bitcoin itself. If you’re paying for mining equipment and electricity like most – in dollars – then you’ll need to earn enough bitcoins from mining to cover running costs; and recoup your initial investment in the car.

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The price of bitcoin naturally affects all miners. But there are three factors that separate profitable miners from the rest: cheap electricity, cheap and efficient equipment, and a good mining pool.

So far in this article, I have used the Whatsminer M20S as an example of the machine you will need to mine bitcoins. Today, there are several hardware manufacturers to choose from.

The cost of hardware varies from manufacturer to manufacturer and depends largely on how low the power consumption of the machine is compared to the computing power it produces. The more computing power you have, the more bitcoins you can mine. The lower your energy consumption, the lower your monthly costs.

Profitability is determined by the cost of the machine per TH, how many watts the machine consumes per TH, and the cost of roaming.

How To Mine Bitcoin

The long service life depends on the quality of the machine’s construction. There is no point in buying machines that seem cheaper or more efficient if they break down after a few months of use.

If hosting costs are low enough, it often makes sense to prioritize “cost per TH” over “watts per TH” because your lower operating costs (OpEx) will result in higher machine capacity. ‘covers the losses – and vice versa if your hosting costs are high.

Currently, the manufacturer with the lowest error rate is MicroBT, which makes the Whatsminer M20S and other Whatsminer models.

One useful way to think about hardware is to consider what price BTC would have to fall to before the hardware would stop being profitable. You want your machine to be profitable for many years so that you can earn more bitcoins from mining than from buying the cryptocurrency itself.

Bitcoin Mining Has Never Been Harder

The table below shows that most state-of-the-art machines can remain profitable at a bitcoin price of $5,000 to $6,000. Some machines can cost less than $5,000 if they run on less than 0.05 kWh of electricity.

Unfortunately, most old cars are no longer profitable even in China. Bitmain S9 has been working since 2016 and interestingly they are still used in Venezuela and Iran where electricity is very cheap, which is higher than the risk of confiscation. Eventually, North America could become the dominant source of electricity for less than 2 cents as the use of solar and wind improves.

The only hope for an individual miner to compete with operations with such cheap electricity is to send their machines to these farms. Many farms do not offer this as a service.

Electricity prices vary from country to country. Many countries are also demanding a lower price for industrial electricity to stimulate economic growth. This means that a mining farm in Russia will pay for half the electricity it would mine domestically in the US. In places like Germany, as the chart shows, it’s a different story…

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From a practical point of view. Monthly operation of the Whatsminer M20S costs about $110 per month, assuming your electricity is 0.045 kWh in places like China, Russia, or Kazakhstan. You can see this from the table below

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