Five years ago, if someone had asked whether Bitcoin mining is worth the trouble, or if it was profitable, the answer would have been a solid yes! However, in 2018, there are so many changes that have occurred in the almost ten years since bitcoin came to spawn that it may not be a very good way to make money anymore.
Can You Make Money From It?
There are many variables that need to be taken into consideration when it comes to bitcoin mining in 2018. There are many answers, but it all comes down to how much you are willing to invest, and how long you are willing to wait to start seeing profits.
There are of course many ways you can make money from Bitcoin, with trading and other ways, however, mining, which used to pay quite a lot in comparison to what it pays today, is only suitable for those who have the money to invest into extremely high-powered computers.
Cold Hard Facts About Bitcoin Mining
Although it’s still physically possible for anyone with a computer and an internet connection to mine bitcoin, unless you have a mega computer (and a solar power farm) your outgoing costs will be more than what you can earn from mining bitcoins.
It’s virtually impossible for small-scale mining operations to make money, as the faster and more advanced your machinery is, the more likely it will be that you can mine quicker than anyone else. Unfortunately, there are massive companies pouring millions of dollars into bitcoin mining, so they can make a profit, so your little home operation will be pointless, and will lose you money.
One of the largest expense is ongoing electricity costs, so unless you have no electricity bills or very cheap ones, your bills will outweigh the profits. The biggest expense, of course, is upfront costs of super-fast computers specifically used for mining. If you don’t know a great deal about mining and want to do it for some fun, here are a few things you should know.
Important Bitcoin Mining Terminology
The hashrate is how your computational power is measured – put simply, hash is the math problem that needs to be solved. The rate is how fast the math problems are being solved. The best way to do this is with a GPU rather than a standard CPU. Standard CPU computers are too slow to solve these problems efficiently enough to make money from. The more power you have in your machines, the faster they find the problems to solve. The slower your machine is, the less chance you have at mining them.
The Block is a group of bitcoin transactions. One new block is created every ten minutes and consists of up to 2020 transactions that need to be mined. What this means is that your computers need to be fast enough to process a very large amount of transactions, and at a constant rate.
The most important thing to know about mining is that the more people that become involved in mining, the more difficult the process of mining becomes. The reason this is so important is that as technology becomes more readily available and affordable to everyone, the more people want to become involved, meaning it is more difficult to make money, and you make less from it, as there is only a set amount to share around.
The conclusion is, that you are far more likely to make money buying and selling bitcoin in 2018 than you would make from mining it unless you have massive amounts of capital to invest.