Various factors determine the profitability of Bitcoin. Some of these factors include the cost of electricity you are likely to incur in the mining process and the computer mining system’s cost, among other factors.
Though advanced hardware and software technology has been introduced to improve find more info regarding the cost implications remain rocket high.
To measure Bitcoin mining’s profitability, you will have to compare cost implications related to mining and the volume of Bitcoin you are likely to mine. So, is Bitcoin mining profitable? We put various aspects into perspective.
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Profitability Today
Mining Bitcoin is indeed profitable for some individuals. Depending on how you approach it, you can still generate impressive income from mining Bitcoins. The advantage is that mining equipment can easily be acquired anywhere across the world.
In a bid to lower the costs of mining, Bitcoin mining manufacturers have come up with advanced equipment that allows miners to adjust energy settings. This helps reduce the high cost of the energy you may incur in Bitcoin mining.
Before purchasing mining equipment, it is important to conduct cost/benefit analysis to determine their breakeven price. This helps miners ascertain the cost implication related to mining.
The following are a few factors you have to factor into your plan before procuring Bitcoin mining equipment.
- The value of Bitcoin-You needs to ascertain the value of Bitcoin against fiat currencies.
- Duration-You to know the timeframe you are likely to use in mining.
- Efficiency-You need to know the amount of power the equipment is likely to consume
- Cost implications of electricity-You need to ascertain the cost you are likely to incur in the power supply.
Calculate profitability
Many tools are available online to help you calculate the profitability of Bitcoin mining. Cyrptocompare is one of the critical tools you can use to conduct a cost analysis of crypto mining.
You can sometimes run the analysis using different prices for both the value of Bitcoin against the cost of power. The level at which the price level of Bitcoin appears profitable is your breakeven price.
Reward in blockchain mining
Typically, Bitcoin mining can be rewarding for serious miners. Currently, the price of Bitcoin stands at
$ 8000.Miners who successfully mine a block are entitled to a reward of 6.25 BTC. Additionally, a reward of $ 50,000 is given to miners who manage to complete a hash. However, the reward is likely to change due to the volatility of Bitcoin.
Generally, the profitability of Bitcoin is determined by cost implications involved in the mining process. This is why pool mining is becoming popular among serious miners. If you plan to achieve the best out of Bitcoin mining, it is recommended that you rather join a pool of miners to share the rewards rather than single mining which is less effective.
A shift in rewards
The supply of Bitcoin is highly controlled to reduce supply. This makes it effective to sustain better Bitcoin prices. With the supply of Bitcoin expected to be capped at 21 million, the demand is likely to increase big time. The approach has greatly helped stimulate the crypto industry that’s gradually gaining momentum across the world.
To suppress the supply of Bitcoins,the blockchain technology halves the number of bitcoins rewarded to miners. Previously, the total number of Bitcoins rewarded to miners stood at 50.later, in 2012 the number was reviewed downwards to 25.
So far, the number of Bitcoins reward to miners stands at 6.25.The reward is likely to be reviewed further downwards soon.
The strategy is to control the number of Bitcoin available in the crypto market and sustain an impressive value. The same applies in every economy to curb the oversupply of currency which may have severe implications on monetary value.
Conclusion
If you are a dedicated miner, before opting to choose Bitcoin mining as a method of earning Bitcoin, its necessary to review various factors enlisted in this article to ascertain whether mining is a worthwhile venture.
The bottom line, the control aspects put in place to suppress the oversupply of Bitcoins are a great deal in retaining the currency’s value. Whether you opt to mine or use whichever methods to acquire Bitcoin, you need to factor in the cost implications. Either way, bitcoin mining can be extremely costly for miners who have little or no knowledge about the costs involved.
