It’s a common opinion that while dealing with cryptocurrencies, even the most knowledgeable adopters have to manage their expectations. While tales of overnight crypto millionaires are enticing, the crypto market is still, for the most part, a lottery. That’s why so many look into Bitcoin mining as a way to have more control over their crypto finances.
But before even considering mining the most popular cryptocurrency, we need to answer an important question. Is mining Bitcoin profitable?
Who is Mining Bitcoin?
Bitcoin mining used to be an unpopular hobby with only a few early adopters dedicating their time and computational power to it. As Bitcoin gained popularity, the hobby turned into a profitable venture, which has led to a whole industry growing around it. Today, mining is very much a business with big data centers managing to balance costs and profits. So the question isn’t whether the industry is profitable by itself, but whether it can be profitable for a solo user.
There isn’t a simple answer, so let’s turn to the numbers.
- In 2024, Bitcoin miners were mining approximately $20 million worth of Bitcoin every day. That adds up to $600 million per month. These are large numbers, but considering companies taking part in the process, it’s not infusing anyone with optimism.
- If we take into account the average price of a professional ASIC miner, which can range between $2000 and $20,000, we can easily see that mining isn’t nearly as affordable as it used to be a decade ago.
- Every four years a halving event takes place, that cuts the amount of rewards for a block in half. So even the most powerful equipment starts bringing less rewards. Currently, a reward equals 3.125 BTC.
3 BTC is not a small sum. It’s $300,000 according to today’s Bitcoin prices. An important issue to remember is that due to the high price of Bitcoin, and the specific nature of the rewards distribution miners don’t always deal in round BTC numbers but in decimals.
ASIC Miner Profitability
Today, ASIC miners are without a doubt, the most profitable mining devices. Again, let’s turn to the numbers to illustrate the point.
- Bitmain Antminer L9 ($11,000-14,000) brings $25.75 per day
- VolcMiner D1 ($9500) brings $24.96 per day
- ElphaPex DG 1+ ($6,000 -$7,000) brings $18,86 per day
- Bitmain Antminer S21 Pro ($4,250) brings $5.64 per day
- Fluminer L1 ($3,000) brings approximately $8 per day.
These prices are listed after deducting electricity fees, according to the data from ASIC Miner Value. Compared to these results, a GPU can manage $0.8 – $1,5 per day, which is a considerable difference.
It’s also worth noting that, even if a user gains access to cheaper electricity, they have to consider the placement of their mining equipment. It’s not always allowed in residential areas and it’s certainly not safe. It’s entirely possible that a miner owner would have to move their equipment to a mining hotel and that brings additional expenses. Another expense is taxes. Some countries already have legislation in place, but others are looking into fully legitimizing cryptocurrencies. This means owners and miners would have to pay taxes on their crypto income, just like they do with other assets.
Are There Other Ways?
Even acknowledging that Bitcoin mining can bring thousands of dollars yearly, it’s not something you can get into without seed capital. At least not in the traditional sense.
There are, however, alternatives that allow a cheaper entrance into the mining industry.
Spending Less
As soon as mining turned into a bigger-scale business, users started looking for ways to stay in competition, while companies provided mining as a service. Mining pools remained the most decentralized option, where users could merge their hash power and split the profits. Since it didn’t have to include a third party or a centralized company, it was an option available to those who were still prepared to invest in the equipment. The difference, however, is that rewards were lower.
Mining companies offer several options, including cloud mining, digital mining, mining games, and so on. The biggest advantage is the lower cost of mining.
Digital Mining is one such option. For instance, when a user buys a digital miner, they don’t need to worry about electricity, placement, or maintenance. The service provider covers all that for a small fee that’s deducted from daily rewards. The correlation between the miner price and the sum of the rewards remains more or less similar, if not lower than that of a physical miner. For many, that’s worth not dealing with the headache that is additional expenses.
Mining games offer higher rewards for winners. But in this case, a user would have to put some effort into the game. It’s not an idle mining operation and it often requires additional spending. The most common misconception about mining games is that they could become a reliable source of income. While that can be true for some lucky and skilled users, that’s not the experience of the majority. Leaving empty-handed after investing time and money can be devastating and result in negative reviews.
Cloud mining can be profitable in theory. In reality, however, it’s one of the reasons the crypto world is often compared to Wild West. Due to a lack of regulations and transparency, some companies choose to take advantage of their clients and hide their actual profits so they can pay less to the customers. This isn’t the case with all, but the negative reviews are piling up.
Is it worth the effort?
Bitcoin mining can be compared to any other business venture. It’s clear that whoever has the most resources gets the advantage, but that doesn’t mean the rest are left in the dust. With a reasonable strategy and a clear understanding of one’s goals, mining can bring high rewards and become a stable additional source of income.
More advanced users don’t stop at mining but utilize all the available services, including trading, a crypto launchpad, investments, and so on. The crypto market has many tools that help maximise the earnings and it’s the ability to use them that makes endeavors profitable or not.
