In Bitcoin's early on days, y'all could easily mine the cryptocurrency on your ain PC. But straightaway y'all demand inexpensive electricity in addition to a serious investment inward specialized hardware to receive got whatever hope of making money.
It's impossible to brand money mining Bitcoin on your computer, fifty-fifty if y'all receive got a decent graphics processor (GPU) optimized for gaming. Anything that promises to mine Bitcoin amongst your CPU is a scam, every bit it won't fifty-fifty last worth the cost of electricity.
Mining Becomes More Difficult Over Time
Mining has larn to a greater extent than hard over time, in addition to is only becoming to a greater extent than hard every bit times goes on. The Bitcoin network is designed to hit a valid "block" for the blockchain about every 10 minutes. Any Bitcoin mined is a wages for producing these blocks.
RELATED: What Is Bitcoin, in addition to How Does it Work?
The to a greater extent than hardware might beingness thrown at Bitcoin mining, the to a greater extent than hard it gets to mine Bitcoin. You tin run across precisely how much the mining "difficulty" has gone upwardly over fourth dimension on websites like Bitcoinity.org. According to their data, it's straightaway 356 times to a greater extent than hard to mine Bitcoin than it was v years ago.
And, every bit if the mining difficulty going upwardly wasn't bad enough, the wages for mining is halved every 210000 blocks, which is to a greater extent than or less every 4 years.
You can't genuinely move it alone, either. You'll desire to mine every bit role of a "mining pool," which combines your mining might amongst other people's in addition to shares the resulting profits betwixt all of y'all according to the hash might y'all bring. There's to a greater extent than oft than non a fee, like 1% of your profits, that y'all receive got to pay to last role of the mining pool.
You Need Specialized Hardware (ASICs) to Compete
The people genuinely making money mining Bitcoin—or fifty-fifty merely trying to brand money—aren't using desktop PCs or fifty-fifty powerful graphics processing hardware meant for gaming PCs. Instead, these people are using dedicated hardware optimized specifically for mining Bitcoin. These hardware devices are known every bit Application Specific Integrated Circuits (ASICs). This distinguishes them from CPUs in addition to GPUs, which are full general role computing devices that tin perform a lot of tasks. ASICs are specifically designed to last every bit efficient every bit possible at a specific application—in this case, mining Bitcoin.
RELATED: Can You Really Make Money Mining Bitcoin With Your Gaming PC?
ASICs aren't merely faster at mining. They also usage much less electricity field doing it. This is peculiarly important, every bit Bitcoin mining requires in addition to hence much electricity in addition to the cost of electricity cuts into your turn a profit margins.
For example, the Bitmain AntMiner S9 is an ASIC has a hashrate of thirteen Th/s—that is, thirteen trillion hashes per second. As Bitcoin Wiki notes, people don't fifty-fifty bother tracking the Bitcoin hashrate of modern graphics processors because ASICs are in addition to hence many times to a greater extent than efficient. Even inward 2014, ASICs had a hash charge per unit of measurement to a greater extent than than chiliad times faster than a GPU.
The Bitmain AntMiner S9 volition cost y'all over $1000. And these devices don't final forever either—companies similar AntMiner are ever improving in addition to releasing novel versions of their ASICs. As faster ASICS bring together the network in addition to add together to a greater extent than hashing power, older ASICs inward usage larn less profitable. This leads to a kind of arms race—you receive got to upgrade your ASICs to rest profitable because other people are upgrading theirs.
Modern GPUs merely can't profitably mine Bitcoin. People who are mining cryptocurrency amongst GPUs are to a greater extent than oft than non mining altcoins with software like Nicehash—and fifty-fifty that won't brand y'all much money amongst desktop GPUs, inward our experience.
You Need Cheap Electricity to Actually Make Money
When y'all recall virtually it, Bitcoin mining is genuinely merely the procedure of converting electricity into Bitcoin. To mine profitably, y'all demand inexpensive electricity. That's why Red People's Republic of China took the atomic number 82 inward Bitcoin mining, every bit some areas of the province could offering might every bit inexpensive as 4 cents per kWh. That's quite depression compared to the average cost of 12 cents per kWh inward the USA. If you're paying to a greater extent than for electricity than your competitors are, you're competing at a disadvantage.
For example, let's tell y'all spend $1200 on an AntMiner S9. This device uses 1300W of power, which is 31.2 kWh per day. At an average cost of 12 cents per kWh inward the USA, that's virtually $3.74 inward electricity costs per 24-hour interval per AntMiner you're running.
A reckoner similar the 1 on CryptoCompare.com calculates that you'll brand $3.63 per 24-hour interval inward profits afterward these electricity costs are taken out. So, over a year, you'll brand $1324.12 inward profit. However, y'all spent $1200 on that AntMiner, in addition to hence y'all genuinely only made $124.12 per AntMiner inward your starting fourth dimension year. That's assuming Bitcoin stays at around $8000 inward value in addition to doesn't drib whatever further, in addition to that the mining difficulty doesn't increase—which it will. You also can't merely usage the same ASIC forever, every bit your profitability volition move downward over time. And, if y'all lived somewhere hot, you'd receive got to pass money cooling the house where y'all run your ASICs in addition to hence they don't overheat.
On the other hand, if you're paying 4 cents per kWh instead, you're looking at a projected turn a profit of $6.10 per 24-hour interval afterward electricity costs. That's $2224.89 over the starting fourth dimension year, or $1024.89 afterward deducting the $1200 cost of the ASIC. While things could withal move incorrect in addition to y'all could neglect to brand a profit, at that spot are much greater odds you'll brand some money.
Your profits alive or popular off past times electricity costs. For example, if y'all pay xx cents per kWh, every bit is the average inward the UK, you'll brand virtually $1.10 a 24-hour interval afterward electricity costs. That's virtually $400 per year, in addition to hence it volition receive got y'all 2 in addition to a one-half years to pay off your AntMiner—and mining difficulty volition increase, in addition to hence there's a skilful run a hazard you'd halt upwardly losing money on that purchase.
The people genuinely making money are located inward areas amongst inexpensive electricity, receive got a large discover of ASICs, in addition to receive got a skilful agency to cool them that doesn't usage also much electricity. So, to brand some existent money, you'll demand some serious startup upper-case missive of the alphabet to purchase all those ASICS in addition to purchase or rent solid soil where y'all receive got inexpensive electricity. Average people can't merely brand money mining on their domicile computers anymore.
