Many investors interested in cryptocurrencies are also interested in mining, and why wouldn’t they? By mining, they earn cryptocurrencies without having to buy them using fiat currency. That’s why some people see mining as an excellent opportunity to earn Bitcoins, but is it still profitable in 2019?
The interest in Bitcoin has increased over the past couple of years, and more and more people want to buy the dominant cryptocurrency. If you are interested in crypto mining, too, and you want to know if you can make a profit by mining Bitcoins, then it would be wise to read this article before you invest the time, money, and equipment.
In this article, you will find out what Bitcoin Mining is if it is still profitable today and if mining is really for you. So, let’s begin.
What is Bitcoin Mining?
Bitcoin mining is the process of updating the ledger of Bitcoin transactions, which is performed by high-powered computers (known as ASICs) that solve complex computational math problems.
By solving computational math problems, bitcoin miners make the bitcoin payment network trustworthy and secure. How? By verifying its transaction information. Bitcoin miners play a significant role in confirming the transactions, and for that, they are rewarded the transaction fees paid by those conducting them.
Not only do miners earn Bitcoins when mining, but by mining, new additional Bitcoin are released into circulation and introduced to digital wallets all over the world, and without miners, this would not be possible. The units in which Bitcoin is mined are called “blocks.”
Nowadays, the odds of a computer solving one of these complex computational math problems is 1 in 6 trillion.
A time will come when Bitcoin mining ends, because the maximum supply, according to Bitcoin Protocol, is 21 Million BTC. The current circulation supply is 17,789,300 BTC. But for now, is investing in mining equipment a smart move in 2019?
Is Bitcoin Mining Profitable?
With the rise of the public interest in Bitcoin, it’s not a surprise that it has become hard for new bitcoin miners to begin mining. Undoubtedly, bitcoin mining is competitive and challenging today.
In the beginning, Bitcoin mining was possible on the CPUs of individual computers, which made it possible for anyone to mine. The higher the speed of the computer, the more profitable the reward. After a while, bitcoin miners had to upgrade to Multi-Graphics Card Systems, then FPGAs (Field-Programmable Gate Arrays).
To become a Bitcoin miner in 2019 and if you want to find more hashes with less electrical power usage, you will need an ASICs (Application-Specific Integrated Circuit) miner.
The cost of energy consumption when using desktop computers, GPUs, or even older models of ASICs, are high and might exceed the revenue generated. Bitcoin mining can be profitable only with the most up-to-date ASICs.
Nowadays, you need to have access to free or at least cheap electricity if you want to generate more money through mining than to spend more money on electricity. Truth to be told, the only way to profitably extract Bitcoins is if you have specialized, high-powered machinery.
Have you heard of “mining pools”? Mining pools are groups of miners who combine their computing power. In the end, the mined Bitcoin is split between all participants. These mining pools make it even more difficult for single miners with one computer to compete.
For example, in 2017, 80% to 90% of bitcoin computing power was represented by mining pools and companies. It would be safe to say that individual miners don’t stand a chance and that pools and not individual miners mine the more significant number of blocks.
How Much a Bitcoin Miner Earns?
The only way for a miner to receive a reward is when he discovers a solution to the puzzle first. Every 10 minutes, new Bitcoins are issued by the Bitcoin network, and every four years, this number is cut in half. The day this happens is called “halving,” and it happens every 210,000 blocks.
The 2020 halving will happen on block 630,000. The 2024 halving will occur at block 840,000. This means that in 2020, miners would be rewarded with 6.25 BTC for completing a block.
Back in 2009, successfully mining one block would earn the miner 50 BTC. In 2012, the reward was 25 BTC. In 2016, for completing a block, miners received 12.5 BTC.
Now, for one found Bitcoin block, a miner will earn 12.5 BTC + transaction fees for transactions within the block. The current price of one Bitcoin is $11,625, which means the lucky miner will make roughly $140,000 – $150,000.
Should We Mine Bitcoin in 2019?
In 2019, many miners have already learned the hard way that investing in the newest ASIC miners might not be worth it. Not only do ASIC miners cost a lot of money, but they are risky due to the unpredictable cryptocurrency market movements.
Will the price of Bitcoin go up or down? If the price continues to go up, the chances are that the number of miners will increase too. However, how many people will invest $5,000 in a machine when the payoff period is between 6 and 18 months? Wouldn’t it be smarter to invest in Bitcoin rather than in miners?
There are essential factors that need to be taken into consideration when making the final decision, such as:
- The Cryptocurrency Price – the higher the price, the higher the mining profit
- The Reward for a Found Cryptocurrency Block – the more coins per block, the higher the mining reward
- The Block Time of the Cryptocurrency Network – the more frequent the blocks, the higher the mining reward
- The Cryptocurrency Network Hashrate (Difficulty) – the more competitors a miner has, in other words, the higher the hash rate, the lower the mining reward.
- The Electricity Costs – the higher the electricity cost, the lower the mining reward.
The Bottom Line:
Is mining for you? In 2019 there are a lot of questionable prospects, and the risks are too high. If you have already bought mining equipment, then you should keep mining.
However, it would not be smart to invest money in mining equipment at this point. Also, the fact that are almost no new miners coming to the market in 2019 speaks for itself.