Workin In A Bit Mine, Going Down Down Down; Is Bitcoin Mining Worth It?

When I first heard about Bitcoin and got a basic idea of how it worked I was intrigued by the fact that you had to solve these complex puzzles that are basically the transactions and it works like digital gold mining essentially. The idea of this was wild and cool and new and of course I wanted to do it too!!

People have been mining Bitcoin since 2009, but the rewards scale and now a block of transactions is worth 12.5 Bitcoins. I never did it back in 2014 when I should have, and now many people wonder "Is Bitcoin mining worth it still?" Even getting back into cryptocurrency late 2016 I even thought that perhaps I would like to have a little home based rig that I could mine with. Then I started to do some research... 

We're Gonna Need A Bigger Boat

To mine Bitcoin you need a pretty beefy computer setup. When I say computer I don't mean your Dell desktop that you bought 4 years ago, the equipment used currently for mining is specialized and can be damn expensive if you want major hash power (we will cover hash power in a minute). There are a lot of tutorials to show you how to build your own home rigs out of GPU's and some other parts, but unless you are willing to invest $3,000 or more don't expect significant returns. Of course the equipment isn't the only thing you have to worry about, these rigs also consume a crap ton of POWER!

The POOoowwwwer!

One of the biggest factors is the amount of power that mining consumes. To actually be profitable you want to be able to mine more BTC then you consume in power doing so. This of course requires 1 of 2 things ( or preferably both!) that you have a pretty decent rig that can get you some decent returns or that you have really cheap power. In general it seems that the sweet spot is no more then 0.14 cents per Killowat Hour (kWh). I live in Southern California and the power here is not cheap, but there is PLENTY of sun so I was thinking that if I did end up getting a home rig going I would try and use Solar Panels to offset the cost. 

Major Competition

Ok so now we have a beefy rig that we built from one of the great DIY tutorials around the internet and we know that we need a lot of power, but that does not rule out all the other mines you are competing against. They want those Bitcoin's just as bad as you do and the amount of hash power some major competitors are boast is insurmountable for the home enthusiast. With the price of Bitcoin heading back to the $3,000 mark again more and more people are going down, down, down into those Bitcoin mines and you will have to compete with them too unless you work together.

Will Work For Hash Power

Being a solo miner is pretty much useless if you are not doing mining on an industrial scale. The best option is to join a mining pool. A mining pool is a group of miners who pool their collective hash power ( hash power is the amount of computational power a rig puts out) to mine a block together and then split the rewards based on your hash power minus any pool fees. Of course there are also sites like Genesis Mining where you can buy hash power in a cloud format too, but I have not tested this. Bitcoin mining is better with friends because it doesn't get any easier from here!



Up & Up The Difficulty Goes

While the rewards for Bitcoin go down over time, the difficulty scales with the amount of hash power thrown at it. This means that the more people mining Bitcoin the more difficult it is to mine. This is so the rate of rewards stays about 10 minutes per block. The difficulty spiked in 2016 as the price of Bitcoin rose a significant amount and that makes it an even great uphill battle to make a profit as an individual miner. If you are really determined to get a mining rig going then I would suggest a alternative path.

A Liter Alternative

Bitcoin isn't the only cryptocurrency out there which means there are many many other coins that you can mine. Some popular ones include Litecoin, Dash, Monero, Z-Cash, & Ethereum. They all have different requirements so a ton of research is involved, but I am personally determined to get some sort of rig going for mining cryptocurrency and I will be post more blogs on this in the future so look for a Step-by-Step guide for the home mining enthusiasts coming soon.

TL;DR

Bitcoin mining is hard to turn a profit these days unless you are prepared to spend a good deal of money to invest in it and really optimize what you are doing. Competition, power consumption, and difficulty are all major concerns and a possible better alternative is to mine Altcoins like Litecoin, Dash, Monero, Z-Cash, Ethereum, or others to turn a profit. 

Work that 'Stache!

 

 

I am still determined to build my own rig despite all these challenges, what about you? Leave a comment about your home rig or mining!

Shea Newkirk

The ‘Stache
Howdy! My name is Shea Newkirk and I have been a Bitcoin supporter since 2014. I am immersing myself in the cryptocurrency world and I decided to jot down my story as things unfold. I am a designer, coder, musician, gamer, father, blogger, entrepreneur & more. Learn from my mistakes and rejoice in my triumphs because the ‘Stache is set to disrupt the crypto world!

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