Should i mine bitcoin 2016
If there were no profitable coins for a long period of time, you'd likely have very high operating costs and be forced to shut down your operation eventually. For a smaller miner running just a few Antminers or some cloud mining, this would be less of an issue. So in theory as long as Bitcoin stays popular and its price continues to increase, if you can get cheap electricity Bitcoin mining should always stay profitable. This last argument in particular is very speculative, so be aware that for a worst-case scenario if Bitcoin's price was to fall for a long-period of time, even if you had cheap electricity, there's a risk that mining it would no longer be profitable.
In June , the reward for Bitcoin mining will half. This could cause big issues in the long-term as it essentially makes it half as profitable overnight. So if miners are only making a small profit prior to this, they'll then be running at a loss just after it. At this point open-ended contracts on sites like Genesis Mining will likely no longer be profitable although they might not even last that long. This site cannot substitute for professional investment or financial advice, or independent factual verification.
This guide is provided for general informational purposes only. The group of individuals writing these guides are cryptocurrency enthusiasts and investors, not financial advisors. Trading or mining any form of cryptocurrency is very high risk, so never invest money you can't afford to lose - you should be prepared to sustain a total loss of all invested money. This website is monetised through affiliate links. Where used, we will disclose this and make no attempt to hide it.
We don't endorse any affiliate services we use - and will not be liable for any damage, expense or other loss you may suffer from using any of these. Don't rush into anything, do your own research. As we write new content, we will update this disclaimer to encompass it. We first discovered Bitcoin in late , and wanted to get everyone around us involved. This article is published in collaboration with Business Insider. The views expressed in this article are those of the author alone and not the World Economic Forum.
We are using cookies to give you the best experience on our site. By continuing to use our site, you are agreeing to our use of cookies. India is now the world's fifth biggest defence spender Briony Harris 04 May Saharan solar farms, sustainable limits and other top stories of the week Adrian Monck 04 May It's 40 years since the first spam email was sent. Conventional currencies usually have a central bank that creates money and controls its supply.
The algorithm behind Bitcoin is designed to limit the number of bitcoins that can ever be created. All Bitcoin transactions are recorded on a public database known as a blockchain. Every time someone mines for Bitcoin, it is recorded with a new block that is transmitted to every Bitcoin app across the network, like a bank updating its online records. Mining increases the money supply.
Unlike with traditional currencies, which can have their money supply reduced by central banks to prevent too much inflation, a bitcoin will stay in circulation forever unless it is accidentally deleted which should be rare. An over supply of any currency can weaken its value so economists try to carefully balance the supply of cash with the demand.
Without a central bank to do this, Bitcoin has an absolute limit built into the system. There are currently around In order to put off the day when there is no Bitcoin left to be mined, mining becomes more difficult as time goes on. The system is also designed to halve the value of what you earn from mining on a specific date. This is expected to be on 11 July , based on the number of new transactions for bitcoins and the estimated rewards for creating the new ledger entries.