Is Bitcoin mining worth it?
Without a doubt, mining has become one of the most popular and sough-after ways of earning Bitcoins.
While there are other ways one can earn them, mining remains the popular choice.
It does, however, become increasingly less profitable as time goes by.
So is it worth it in 2021 then?
After 2018, the machine of the crypto world that Bitcoin has become began to drastically lose its value.
Many news publications began to jump on the hate train, luring users with into reading articles about how Bitcoin is done for.
In addition to Bitcoin’s downfall, other cryptocurrencies experienced substantial declines as well.
Billions of dollars were lost in a short span of time, and many people thought that the best days of Bitcoin were over.
Many cryptocurrencies fell almost twofold.
The peculiarities of mining
Mining is a procedure that supports the ability of cryptocurrency funds to function, as well as the platform on which it is based. During this process, the computing power of your system is used. The most popular mining system in use today is the GPU (graphics processor unit) farm, or in other words, the video card farm. By using the processing power provided by the system, new structural units (blocks) are created, in return for which the miner receives a certain amount of funds. The income level of a miner is directly proportional to the power of his system, but it also matters what kind of cryptocurrency he produces, since some are easier to mine than others.
Mining prospects for 2021
The first month of 2021 was distinguished by an abnormally large number of requests for the purchase of mining farms. However, the majority of such requests were made by people who did not even bother trying to go into the details and simply searched for “Buy mining farm”. As many as 70,000 people were curious about the topic. With the help of analytical services, you can find out that, on average, more than 100,000 people a month are interested in acquiring a mining farm.
There are, of course, those who are ready to assemble their own farms in the conditions of their home, without having to resort to purchasing them via specialized services at very expensive prices. One would think that the declining prices of many cryptocurrencies would influence their popularity, especially in the mining business. Not a chance. Let’s take a look at how much a typical mining rig would cost you these days, and whether or not it is worth it at all.
What are the profits like?
Your profits depend entirely on the power of your mining farm. Taking into account the multitude GPU’s available for sale these days, some of them even specialized for mining, the average amount of revenue per day has been calculated, and it is equivalent to around $20-$40, without taking into account the amount of electricity consumed by the farm, which is often quite a lot, especially on the high-end systems. Subtracting them from your profits will give you an idea of your net profit. A farm consisting of 8 GPU’s, costing around $7,000-$8,000 pays off in about a year.
The complexities of mining in 2021
At the moment, mining Bitcoin is nowhere near as easy to mine as it was before. To understand whether mining is profitable in 2020, you need to take into account several factors. One of them is the ever-increasing complexity of mining. Prices for video cards have soared, due to the fact that there was a shortage of graphics memory on the market. In order to maintain a decent and stable income, you need to constantly invest in mining, not only with money, but also with your own time. In addition to the shortage of video cards on the market, there is another difficulty. Namely, the ever-increasing complexity of the mining process. Miners will never be able to deplete unmined cryptocurrency reserves earlier than the date indicated in the code of this cryptocurrency itself. The last bitcoin is expected to be mined sometime around 2140.
The founder of Bitcoin allowed miners to produce the first 2016 blocks, after which they decided to rethink some aspects. They decided to change the complexity of the extraction of the cryptocurrency as a result. In theory, 2016 blocks should have been mined in two weeks, with 10 minutes required to mine each block. In this case, the complexity of the extraction of bitcoin is equal to 1 – this is the standard value that was embedded in the network.
If miners would have mined the first 2016 blocks in less than 14 days, then the complexity would increase, in order to avoid overtaking stored values in the system. If it took more than 14 days, the difficulty would be reduced accordingly, in order to keep up with the established values. So basically, if the coins are mined too quickly, the mining bar rises, if slowly, it goes down.
If all enthusiasts start extracting cryptocurrency in unlimited quantities, then the system will not be able to keep up. Simply put, these restraints have been established in order to ensure adequate stability of the cryptocurrency. All these difficulties may scare away unmotivated newcomers, but the potential returns seem to make more and more people connect their lives with this area.
Is mining still relevant in 2020?
Yes, it most certainly is still relevant, but you should bear in mind the risks associated with the instability of cryptocurrency, which you likely already know about.
At any moment, your mining rig may become worthless. Or, on the contrary, it may become a gold mine.
In the end, mining is a highly profitable business, so if your financial situation allows for it, it is very well worth the risk.
The earlier you start, the earlier you will be able to reap the rewards.