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A Quick Way To Deter­mine If Bit­coin Min­ing Is Worth Your Effort

The cur­rent val­ue of one bit­coin sits at around $8,550. In the past year, the val­ue of bit­coin has been shown to be quite volatile. So, many investors may be hes­i­tant to invest their own mon­ey in this cryp­tocur­ren­cy. For­tu­nate­ly, through min­ing, you can earn bit­coin with min­i­mal invest­ment. Here’s what you need to know about this still-prof­itable rev­enue source.How Does Bit­coin Min­ing Work?

In order to val­i­date trans­ac­tions involv­ing bit­coin, there need to be peo­ple with the appro­pri­ate com­put­ing pow­er to run ver­i­fi­ca­tions. These bit­coin min­ers receive bit­coin in exchange for their efforts. If the cost of min­ing is less than the bit­coin val­ue, then the min­ers will make a prof­it. These days, there are min­ing cen­ters fea­tur­ing unpar­al­leled com­put­ing pow­er, but there is still mon­ey to be made by indi­vid­u­als with the right set­up.

Pri­or to 2013 and the inven­tion of appli­ca­tion spe­cif­ic inte­grat­ed cir­cuit (ASIC) chips, per­son­al com­put­ers could be used eas­i­ly to mine bit­coin. How­ev­er, ASICs made bit­coin min­ing 100x eas­i­er. With the intro­duc­tion of ASICs, indi­vid­u­als had to com­pete with the com­put­er pow­er of large min­ing cen­ters. The ris­ing dif­fi­cul­ty of min­ing, high ener­gy costs of run­ning equip­ment, and the cost of buy­ing the com­put­ing equip­ment all chipped away at prof­its.

How to Deter­mine if Bit­coin Min­ing Will Be Prof­itable for You

Some indi­vid­u­als may still be able to make mon­ey bit­coin min­ing. You can more eas­i­ly obtain equip­ment nowa­days and there is wider avail­abil­i­ty of effi­cien­cy machines, such as ones that let you low­er ener­gy require­ments (and there­fore, over­all costs.) Before jump­ing into bit­coin min­ing, you should do a cost/benefit analy­sis. For this analy­sis, you need to know bitcoin’s val­ue in an offi­cial cur­ren­cy, the time you plan to spend min­ing, how many watts your sys­tem con­sumes, and your elec­tric­i­ty costs.

Var­i­ous sites offer free prof­itabil­i­ty cal­cu­la­tors. It’s worth run­ning the num­bers on sev­er­al bit­coin min­ing prof­itabil­i­ty cal­cu­la­tors since they can vary in com­plex­i­ty. You will want to deter­mine the breakeven price at which bit­coin must be worth in order for min­ing to be prof­itable for you. If the price is real­is­tic, then it may be worth invest­ing in the equip­ment to start min­ing.

The bot­tom line is that bit­coin min­ing is an excel­lent way to take advan­tage of a lucra­tive and volatile mar­ket. As prices rise, min­ing becomes more dif­fi­cult as more min­ers com­pete for few­er bit­coins. 

And, as prices decline, min­ing is eas­i­er, and few­er min­ers com­pete for bit­coins.

By: Lucy Jen­nings

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