is Bitcoin Mining Profitable ?

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Maybe many people are aware of Bitcoin mining and already own one. However, some are still doubtful about the profitability returns as a Bitcoin miner. Many people dream of acquiring bitcoins and became a miner. They think it is easy to sit back watch the dough rolling on its own. Sadly, it is not like that. While some may find it profitable, others may have to work harder. If you are trying to figure out whether becoming a Bitcoin miner will give you good returns as you have expected, you must need to know about the factors that involve in mathematical computation of bitcoins first. This article will give a brief about Bitcoin mining and whether it is profitable or not?

What is Bitcoin mining ?

is Bitcoin Mining ProfitableBitcoin mining is the simple process of computing Bitcoin profitability and getting rewarded with one Bitcoin on every profit. In order to earn one Bitcoin, the miner has to complete one block of Bitcoin transactions. The transactions are recorded in a digital ledger known as blockchain. On completion of each block, the miner is awarded one Bitcoin.

How do you earn rewards ?

Each record or a series of records that a miner completes is called as blocks. On completion of each block, the miner is awarded a reward. Later the block is sent over the network and added to the blockchain as a valid transfer.

Once all the blocks are covered, they are given a block reward. A block reward is given to the miner who completes one block and adds it to the blockchain. In 2009, a block reward was given as 50 Bitcoin which was divided into half in 2017.

Bitcoin profitability is not calculated on pen and paper. It is done through a special mining calculator that calculates faster than a computer. The more block chains or Bitcoin you produce, the calculation process becomes complex as well. You need a huge space to store your mining calculator, which is quite expensive.

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Is Bitcoin mining profitable ?

Earlier, in 2008, Bitcoin accumulation was easy and people who used the mining process found it profitable. This has resulted in increasing the value of Bitcoin gradually and today it has reached a point when you cannot calculate the bitcoin mining without a mining calculator.
Here are the factors to consider whether it is worthy of mine Bitcoin today;

The power of the miner

The Bitcoin mining depends completely on the power of solving mathematical puzzles by the miners. All miners are trying hard to solve the mathematical calculations and gain the hash rate. The higher the hash rate, the more the puzzles are solved and subsequently, you earn more Bitcoin.

The cost of miner

The more powerful miner comes at a very high cost. Before assuming the profitability of the Bitcoin, you must know how expensive your Bitcoin miner box can be. The ASIC mining box is the most powerful mining box but costs a lot of money as well.

The cost of electricity

After considering the cost of ASIC box, the next factor to determine the profitability returns is the cost of electricity incurred on the installation of the hardware. You need to calculate how much cost you incur on electricity. Miners are a great unit that works hard to compute the calculations to earn Bitcoin on your behalf. However, this incurs a lot of electricity as well. You need to measure the charges in kilowatt for an hour to find out the exact costs incurred. All these computations determine the exact return of the Bitcoin mining profitability.

The cost of Bitcoin

Ultimately, everything depends on the cost of Bitcoin. The Bitcoin rates fluctuate a lot due to certain factors; government regulations, prevailing criminal activity, Bitcoin trading habits, and market-growth rates. For example, if the Bitcoin rates are as high as $1000 on closing, your miner will consume less electricity to earn the block rewards. However, if your deal ends at a loss say the loss of $200, your miner will consume more electricity to reach the desired point.

How to calculate the profitability?

The overall costs that you incur on a miner determine the profitability of Bitcoin mining. You may try alternative measures for calculations as well such as cloud mining or a short-term profitable mining calculator. However, they do not help you in calculating complex mathematical puzzles for you and may not give mathematical calculations as fast as an ASIC mining box.

Thus, Bitcoin mining is profitable only when you have enough resources to invest and get considerable returns from mining.

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