How much does it cost to start mining for bitcoins

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How much it cost to mine bitcoin

New bitcoins are generated roughly every 10 minutes, but your ability to earn those newly created bitcoins is dependent on how much computational power you have relative to how much computational power is on the network.

One of the points of bitcoin is that the cost of successive bitcoins increases steadily. So there is no standard difficulty: the first ones were easy, the last will be incredibly hard.

To get to that answer you need to consider the following:

  1. Consider which mining rig you want and can afford, will you build it yourself or will you buy an ASIC ready made rig? Nowadays, the only feasible mining rigs for bitcoin are ASIC’s.
  2. Cost of electricity, calculate costs there. You should look into somehow finding free electricity or set up your miners in places where electricity costs are very low.
  3. Join a pool. Rather than trying to mine all by yourself, you can pool your resources or hashing power with other miners. Miners in pools earn a share of the coins mined by all members.
  4. Difficulty levels are another thing to monitor very closely. As bitcoin’s difficulty increases you might begin to see your long-term profitability being affected.
  5. Price is another very important thing to monitor closely. If the difficulty increases and consequently the price drops than you’re definitely in hot water.
  6. Excess heat. These miners produce unprecedented amounts of heat.
  7. Downtime. Electricity shuts off, hardware inside the miners break, miners themselves break. You get the picture.

Let’s assume you are mining 24 hours a day in the cheapest part of China with the most powerful Antminer, the S9, and you want to pay off the cost of materials in 1 year:

Electricity rate: 0.06 USD/kWh

S9 power consumption: 0.1 kW/TH/s

S9 hash rate: 13.5 TH/s

S9 cost: USD 900 (incl. USD 100 for PSU)

Amortization period: 365 days

Therefore: Daily cost : hashpower ratio = 0.33 USD/TH/s

The daily amount payable is therefore 0.33 USD/TH/s * 13.5 TH/s = USD 4.40

The yearly amount payable is USD 4.40 * 365 = USD 1609

Now with the current difficulty setting the yearly amount receivable for an S9 is approx 0.25 BTC, so it takes 4 years to mine 1 BTC:

Outgoings:

Yr. 1: USD 1609 (incl. materials costs)

Yr. 2: USD 709

Yr. 3: USD 709

Yr. 4: USD 709

Total outgoings = USD 3736

So if the BTC price remained above USD 3736 for 4 years, you would have paid off your mining equipment and made 1 BTC at profit.

 

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