Have you heard the stories of people becoming millionaires from a bitcoin mining operation?
These stories do exist. There are people out there making a lot of money mining bitcoin and other cryptocurrency. And this seems like a popular strategy to make money for those in the already lucrative software development industry.
However, is it worth it to quit a software development job to start a bitcoin mining operation? In other words, do bitcoin miners make more money than software developers?
The answer to those questions is a little more complicated than a simple yes or no. This article will answer those questions and more by comparing available data on the earnings of software developers and bitcoin miners.
Do Bitcoin miners make more money than software developers [Simple Answer]?
The simple answer to whether Bitcoin miners make more money than software developers is no. Bitcoin miners do not make more money than software developers.
The average bitcoin miner will not make anywhere close to the amount of money that a software developer in the United States, Western Europe, or northern Asia (Japan and South Korea) makes. However, software developers that earn less money (ie. those in India, Vietnam, or other developing countries) do have a better chance of earning more money from bitcoin mining.
There is a catch, though.
The upfront costs of mining bitcoin are massive.
The rest of the article will cover various aspects of bitcoin mining, how some bitcoin miners make so much money, and the average salaries for software developers.
How much money do bitcoin miners make?
The amount of money that bitcoin miners depends on so many different factors that it is difficult to pin down an exact amount that a bitcoin miner makes. Some of the factors that influence the amount of money a bitcoin miner makes include the following:
Amount of Bitcoin Mining Rigs
The first, and most important, factor in determining how much a bitcoin miner makes is the amount of bitcoin mining rigs that they operate.
If a bitcoin miner only has a handful of mining rigs, then they are certainly not making the amount of money a software developer in a western country earns.
The average mining rig will earn about $8 in bitcoin each day after electricity.
That would require a massive amount of bitcoin mining rigs to make more than the average software developer in a western country.
Cost of Electricity
As we briefly mentioned in the previous section, electricity is something one must consider to determine profitability. In fact, electricity is the biggest variable cost that a bitcoin miner must pay.
If you pay too much money for electricity, then you may not even earn a profit from mining bitcoin!
That’s correct, you can actually lose money if you pay too much for electricity. Many of the larger bitcoin mining operations pay special, commercial rates for electricity and base themselves in cold climates to mitigate cooling costs.
Value of Bitcoin
Another huge factor in determining the profitability of bitcoin mining is the price of bitcoin. Does bitcoin have a high value?
If yes, then you are much more likely to turn a profit than if bitcoin does not cost much. However, this is not the best metric because sometimes it can be profitable to mine bitcoin even if bitcoin does not have a high value. The amount a miner earns from mining depends more on the number of other miners.
If there are not many other miners, then transaction fees will increase to attract more miners. This means more money for miners.
Cost of Equipment
Cost of equipment is another factor in determining the profitability of mining. However, equipment costs are a one-time cost – you only pay for a bitcoin mining once. That said, you still have to pay for a mining rig and that cost will impact your profitability.
More importantly, the cost of bitcoin mining equipment is the biggest obstacle to making money with bitcoin mining – it’s a lot of upfront cost to purchase enough miners to turn a decent profit!
How Much Bitcoin Miners Make
With all those factors out of the way, the amount a bitcoin makes can finally be determined. Does the bitcoin miner have a few mining rigs in operation in their basement?
In that case, the will likely make up to a few hundred dollars a month at best once electricity and the varying price of bitcoin is taken into account.
On the other hand, a professional bitcoin mining operation can earn over $100,000 per year, but that will require hundreds of mining rigs, a warehouse, proper ventilation, and a large amount of setup costs.
Basically, the sky’s the limit when it comes to how much a bitcoin mining operation can earn. However, for most miners it simply is not enough money to justify quitting a job unless they take it as serious as any other business.
How much do software developers earn?
Software developers earn good money in the United States. The average salary for an American software developer is around $85,000 per year, and that does not include benefits.
The salary can go much higher than that with more experience and working for certain companies.
Software developers in less developed countries earn significantly less than that, though. For instance, in India the average salary for a software developer ranges from $1,600 to $6,000 per year.
Is bitcoin mining right for me?
This depends on a lot of different factors, your financial situation, and what you expect out of bitcoin mining. Here are some basic questions and points to consider before you begin bitcoin mining.
The first, and most important, factor to consider before bitcoin mining is the amount of capital you have to invest. It will take about $1,000 to purchase an appropriate bitcoin mining rig unless you finance.
That rig will not begin turning a profit for about a year, so it is a capital intensive method of earning money.
If you do not have that much free capital, then bitcoin mining might not be right for you.
Another important factor in determining whether bitcoin mining will work for you is the amount you pay for electricity.
Simply put, if you pay too much for electricity, then bitcoin mining will not work.
Can you handle not immediately earning a profit?
Bitcoin mining is unpredictable. You will have certain months that are profitable and others where you operate at a loss.
If you cannot handle operating at a loss for a sustained amount of time, then bitcoin mining is not right for you.
Well, that covers it for whether bitcoin miners earn more money than software developers.
The simple answer is no. Bitcoin miners do not earn more money than software developers. However, there are exceptions in the form of massive bitcoin mining operations that earn hundreds of thousands of dollars per year.
However, those are exceptions to the rule. Most bitcoin miners do not have the access to capital to purchase the equipment that would allow them to earn hundreds of thousands of dollars mining bitcoin. Additionally, mining bitcoin has a large amount of risk involved in the entire process.