You have probably been invited to participate in the mining of some cryptocurrency. Perhaps on more than one occasion a family member or friend has told you that it is a good idea to invest in this business. But is it really profitable to spend your time and money in this activity? To this question we try to answer this article, focusing on the main mining market, Bitcoin.
The trends in the market
In previous installments of this saga about cryptocurrency mining, we have shown the crucial importance of this process for the entire crypto world. Well, it is through it that the Blockchain on which the crypto assets are based, obtain the computing power that allows its operation.
However, when we talk about computing power we do not mean any computing power, at least when referring to Bitcoin. But, to perform the complex mathematical operations that are required to be a BTC node, you need a specialized team with high performance.
Thus, there have even been cases in which people who decide to mine Bitcoins without the appropriate equipment, or whose computing power is dedicated to mining by a virus on their equipment, have suffered significant damage to it. Since, a normal laptop or computer does not have the necessary power to withstand the effort involved in Bitcoin mining.
This situation has generated an important trend: the elitization of the mining process. Well, if a special mining equipment is required to be a Bitcoin node. Logically, only those with sufficient capital to acquire one or many mining equipment, and pay the electricity they consume, may only be part of the Blockchain and therefore have a voice and vote in it.
Which has led to the emergence of the so-called “mining farms.” True companies whose capital is invested in the purchase of tens of hundreds of mining machines, with which they obtain astronomical profits. Making these companies the true owners of Bitcoin.
Some market figures
The simple fact that there are several large companies, and many individuals around the world, willing to invest money in a special mining machine. It already gives us a clue about how much money moves inside the mining of crypto assets like Bitcoin.
And, the profitability of the cryptoactive mining process depends almost entirely on the price at which the cryptocurrency arrives. Therefore, the miners who participated in the BTC mining in their first days of existence. They have obtained truly huge profits, with figures that are calculated around a 9,000,000% return.
This has attracted large companies to invest heavily in cryptocurrency mining. Competing to take part of the 1,800 Bitcoins that are issued every day through mining. And from the halving of this year’s BTC, of the 900 Bitcoins that will be issued.
Is it really profitable?
However, is it profitable to mine Bitcoins today with its current price? Well, this will depend on the cost of electric power in the place where you install your mining equipment, this being the main cost of mining once the equipment is acquired. Well, the price of these vary between 1,000 and 3,000 dollars depending on their power.
Thus, in countries like George, the estimated cost of mining 1 Bitcoin is around $ 3,500 (electricity only). What makes it a very profitable business today with the price above $ 9,000. While in a country like South Korea it would cost more than $ 20,000.
What shows as in the end, the cost of electricity is the main element to calculate if it will be profitable for you to mine in your country. Therefore, you must calculate the cost of 211 kWh in your country (the estimated consumption for the mining of 1 BTC). And from there evaluate if it is convenient for you to acquire a mining equipment.
International Studies student, interested in economics and international politics. Passionate about the progress of the Fourth Industrial Revolution in general and cryptocurrencies in particular.