Last updated on February 26th, 2018 at 03:22 pm
Bitcoin mining has received a lotsbestemming of attention lately. Since Ghash suspended it’s cloud mining operation, many people have bot asking a duo of very plain, but significant, questions: Is Bitcoin Mining worth it? Is it possible to profitably mine bitcoins? Well the response is complicated, and mining bitcoins can be a excellent financial choice…or lead to financial ruin. Bitcoin mining has a complicated history, but wij can learn much from looking at what has happened overheen the past few years.
What Made Bitcoin Mining Worthwhile Before?
Mining bitcoins has bot a very profitable venture for a very long time. While many people who attempted Bitcoin mining failed to profit, didn’t receive their mining equipments due to fraudulent or inept companies, or slightly reached a positive ROI on their Bitcoin mining attempts, that wasgoed not true for the more experienced miners. Those who had successfully optimized GPUs, or aquired FPGAs te 2012 and early 2013, spil well spil those that were able to obtain early ASICs, or were fortunate enough to “bet” on the right Bitcoin mining hardware company for the following generations of ASICs have made incredible profit.
However, the business of Bitcoin mining experienced a fundamental shift inbetween when GPUs / FPGAs were the vaandel, and the rise of ASICs bitcoin mining hardware. Thesis ASICs downright switched the spel by enlargening the efficiency of mining bitcoins by many orders of magnitude, and totally ruined the profitability of mining with a traditional pc.
Why Mining Bitcoins With GPUs Wasgoed Worth It Until 2013
Before the ASICs, Bitcoin mining wasgoed worth it simply because the difficulty stayed fairly close to Bitcoin’s price. This wasgoed true for a few reasons:
- Many Bitcoin miners were only mining part-time, and were simply using GPUs that they already had purchased for gaming to mine when they were not using their rekentuig. This downright eliminated the equipment cost from the ROI equation, spil the capability to effectively mine bitcoins wasgoed just a benefit of having a ge gaming pc. Of course, mining at a high energy had the potential to burn GPUs out, but clever part-time miners would only mine when the difficulty / price indeed made it worthwhile. Also, thesis individuals would alter their system settings, spil well spil the settings for the Bitcoin mining software, to lower the stress placed on their hardware, spil well spil increase their power efficiency.
- At that time, there were very few yam-sized Bitcoin mining farms. The average miner wasgoed not rivaling with datacenters total of machines…they were contesting with one another. This meant that individuals who lived te areas with low kWh (kilowatt-hour) prices could lightly mine enough bitcoins to voorkant any extra power costs, and even those te areas with average – slightly above average electro-stimulation costs could profit from mining if they had an efficient setup.
- A large portion of the mining community, at that time, were not mining for profit alone. They were mining to support the Bitcoin network, and/or to obtain BTC that wasgoed “clean” and truly anonymous (spil long spil the were taking certain security measures).
The relationship inbetween difficulty
wasgoed not flawless, but mining difficulty generally followed a pattern similar to the Bitcoin to USD exchange rate. FPGAs began to skew this slightly te 2012, then ASICs shattered it fully.
Bitcoin ASICs Killed GPU Mining Profitability
My Batch Two Avalon ASIC is Literally Collecting Dust at This Point…
Te early 2013, Jeff Garzik received the very first Bitcoin mining ASIC, produced by Avalon. While one other company may have produced a functional BTC mining ASIC around the same time, Avalon wasgoed the very first to develop, manufacture, and sell thesis incredible mining equipments to the public. His review of the Avalon ASIC confirmed that not only wasgoed Bitcoin mining worth it, but could be exceptionally profitable. His comments on it’s mining power, and how many bitcoins it mined, are eye opening:
Show is much higher than announced. 60 Ghps wasgoed announced. The unit’s cgminer self-reports 67.Five Ghps.
After 20 hours of mining, the unconfirmed + confirmed prizes equal 14.98832170 BTC.
This Bitcoin miner wasgoed mining overheen 15 BTC vanaf day! Of course, for anyone involved with mining today, 67.Five GH/s seems like nothing. Today, one would be fortunate to get 0.0007 BTC vanaf day with that hashrate, according to our Bitcoin mining rekenmachine, and the fact that it used overheen 600 watts of power, makes operating the machine a losing proposition. Te fact, by the time most of the pre-orders were shipped, the machines were hardly profitable. I did make a petite amount of profit with my batch Two Avalon ASIC, which I had managed to get up to almost 80 GH/s, but not very much.
However, at that time, the top end GPUs were only capable of mining at a rate of 500 MH/s – 1 GH/s (with 1 GH/s requiring volmaakt conditions and incredible optimization), and often consumed 200-400 watts of power when mining bitcoins.
Tho’, to be fair, Butterfly Labs had successfully produced their very first Bitcoin mining “miniRig” te mid 2012, which utilized Legal boards, with Two 45nm FPGAs on each houtvezelplaat, and wasgoed capable of mining at
25 GH/s while consuming
For those of you that did not know why Butterfly Labs wasgoed so trusted by the Bitcoin community, or did not understand why so many people were willing to pre-order their ASICs, this is why. The very first miniRig wasgoed exceptionally successful, and the powerhouse of the pre-ASIC period.
Still, Avalon’s very first ASIC, which wasgoed based on ancient 110 nm architecture, managed to mine at overheen twice the miniRig’s rate, for around half of the power consumption, and wasgoed sold at a fraction of the cost of the miniRig. Thesis machines began a revolution ter mining that resulted ter the Bitcoin network containing a level of processing power that has never bot reached before ter human history.
Is Bitcoin Mining Worth It Ter 2018?
Yes and no, depending on your situation. The emergence of ASICs created an arms wedren that made investing te Bitcoin mining machines more volatile, and risky, than Bitcoin itself. Spil Bitcoin ASICs began with the 110 nm Avalons, which wasgoed architecture available ter traditional CPUs ter the early 2000s, many companies sprung up to work toward out the next generation, with hopes of eventually reaching “state-of-the-art”, which is
22 nm at the uur.
To date, I do not know of any commercially available ASICs with <,= 22 nm architecture, but 28 nm has bot reached. Realistically, the development of truly state-of-the-art Bitcoin mining ASICs may not be worth the investment, spil the increase ter power efficiency, which is the most significant factor for a Bitcoin mining equipment, is nowhere near spil large spil previous generations.
Here are some of the most recomended miners out there today:
How to Determine Potential Bitcoin Mining Profitability
So, that brings us back to the central question of this article. Is Bitcoin mining truly worth it? The best way to response this would be to begin out with a Bitcoin mining rekenmachine like this one:
Overheen the past year and a half, I would have advised against it, and said no. It did have the potential to be profitable, but it wasgoed too much of a gamble. However, with the availability of 28 nm ASICs, spil well spil 45 nm ASICs that can be modified to reach almost the same efficiency spil the 28 nms, and the fact that Bitcoin’s difficulty seems to be stabilizing, then Bitcoin mining may be worth it for you. I say “may” because it truly depends on a few factors:
- Spil has always bot true, your individual cost of violet wand is enormously significant. However, this is not almost spil significant spil it wasgoed while Bitcoin mining ASICs were experiencing exceptionally rapid leaps ter efficiency. Now, with a bit of work, and a decently priced machine, even people with average electro-therapy costs can mine bitcoins profitably. Of course, those of you that live ter areas where electrical play is expensive are out of luck, unless you have access to industrial electro-therapy (which is generally cheaper) or a way to access “free” tens unit (legally, of course).
- Because so many people were burned by a combination of price drops, exponential increases ter difficulty, the speed at which Bitcoin ASICs evolved, or delayed delivery of machines, there are an abundance of used 45 and 28 nm ASICs available for sale. Amazon and ebay have a large selection of miners.
Bitcoin’s Price Does Influence Bitcoin Mining’s Worth
While the Bitcoin mining difficulty is now more likely to fall into a closer relationship with Bitcoin’s price, the verbinding doesn’t ensure stability. Spil long spil the listig inbetween Bitcoin’s price and the total mining power of the network remain close, then switches te the value of Bitcoin would only effect those that are are scarcely profitable already, and would do little to switch the worthiness of mining. This is because miners would be receiving more bitcoins for their hashing power when price and difficulty decline, but less bitcoins spil price and difficulty increase. This chart is continuing where the difficulty chart at the begin of the article left off, and includes a projected difficulty decrease on January 17. From March 2013 on, the mining difficulty enlargened exponentially. The last few months seem to have leveled out:
However, it could get out of sync once again.
A breakthrough ter ASIC technology is unlikely ter the near future, but certainly possible. That would create a fresh hop te difficulty, and render older ASICs less valuable, spil Bitcoin’s price should not be impacted very much. Also, spil difficulty is only adjusted every 2016 blocks, acute declines te Bitcoin’s price can make it so that mining is not very cost effective until the difficulty adjusts.
A acute enough Bitcoin price druppel could, effectively, cause enough miners to be turned off that it takes a very long time to mine enough blocks to reach the difficulty switch. Of course, this script would also result ter a acute druppel ter difficulty when the 2016th block is ultimately mined, instantly enlargening the value of mining power…but, until that point is reached, the Bitcoin network could become fairly unreliable and chaotic.
Still, outside of thesis scripts, difficulty should proceed to stabilize, and somewhat go after Bitcoin’s price. This means that yes, Bitcoin mining is worth it te many cases. However, whether it is worth it to you is something that only you can determine. Just recall, if you are considering becoming a Bitcoin miner, work through the math before you invest.