Bitcoin calculator formula
First post of a series of 2. Fin the second part here! Miners are an fundamental part of bitcoin technology because they participate in the competition to update the blockchain with the new block and then they are responsible for the validity of the blockchain itself.
The mining 'game' is a very interesting game theory experiment that lead to an astonishing result: Mining bitcoin has been, and for certain still is, a very lucrative business, so it is normal that many people are now interested in mining.
Let's explain how to compute the mining profitability. To be clear from the beginning of this post, mining today is not a profitable experience unless you have an access to really cheap electricity or the possibility to do a huge scale investment. Here I show you why. So mining is a classical project where you invest upfront a capital and you expect to have some income during the life of the asset.
So it is a cash-flow investment:. The Capex capital expendituresor the investment made upfront is the cost of the equipment, usually in the case of mining we have to count the Miner itself and the Inverter to supply the power. In our case the bitcoin price refers to 14 of October:.
The Opex operating expense will be the electricity cost and, in case of dedicated business of course rent, labor and other minor costs. Fortunately for bitcoin miners the electricity is a very easy cost to compute, since our miner will most likely run 24 hours a day at the maximum power.
Assuming the rent, the labor and all the other costs as zero careful! In the case of the Antminer the electrical consumption is W. So the cost of electricity per day is:. Assuming that the electricity cost in your currency is of 0. We calculate the cost per day because the income will be statistically almost fixed until the next difficulty computation, so to have a good simulation we should count the days until the next difficulty.
For doing this we check really fast on Alloscompthis website, as many others, will give you the first income of your miner, a good approximation until the first difficulty adjustment. While I write the bitcoin price in euro is This allow us to convert our income to 7. It could seem difficult to adjust the difficulty calculation, but the only thing you have to remember is that the bitcoin mining reward is proportional to the difficulty.
So let's imagine the difficulty evolution in the next months. I usually go Bitcoin Wisdom in order to have an idea of the difficulty evolution in the future. Watching at the difficulty history table we can see the percentage variation of the difficulty roughly every two weeks.
This is the best approach, but it is fast enough to understand of what we are talking about. In our case to only repay the hardware we would need 49 weeks, and in that time we would have a cumulative electrical cost of around That you will never be able to repay with your miner. Yes you already know, in order to mine today you need to have lower hardware prices, lower electricity prices or sell your heating Try to do these calculations on every miner you would like to invest in, and let me know if you find a secret miner that have completely different figures In an other post I will give some advice to mine today, with some edge case that still make it possible!
The other post is available here! True, I've tried to make this sum profitable many times but if you don't actually get electricity for almost free it just doesn't seem worth it. Not to mention the time waiting for your equipment to land and time is definitely money in this equation. As I show you in the article it is not profitable at all. You will not do any money doing mining.
For Antminer S9 at current prices of bitcoin you will never a positive income. If you can invest million dollars you could find a way!
Im planning to buy 5 S3 at the end of the year which according to the seller, its ROI is 1 yr. You mean its not true? The profitability depends mainly on the sell price, if you provide me the price I can quickly check for you Bitcoin mining step by step - Profitability calculation. The profitability of mining To be clear from the beginning of this post, mining today is not a profitable experience unless you have an access to really cheap electricity or the possibility to do a huge scale investment.
The basics of mining economy So mining is a classical project where you invest upfront a capital and you expect to have some income during the life of the asset. So it is a cash-flow investment: In our case the bitcoin price refers to 14 of October: For a total of 2. So the cost of electricity per day is: Let's calculate the income!
Yes, you are not going to become rich with a miner. Adjust the difficulty to next level It could seem difficult to adjust the difficulty calculation, but the only thing you have to remember is that the bitcoin mining reward is proportional to the difficulty.
Let's create the following table you can extend the table more: But today no, no normal guy can make easy money with mining bitcoin Authors get paid when people like you upvote their post. What miner tool can you recommend and how long is its ROI? Its a second hand actually, less than a thousand dollar.