We will analyze the factors that affect the profitability of mining and the cost of a mining farm and consider the possibility of mining other cryptocurrencies in comparison with bitcoin.
2022 Crypto winter
The cost of a mining farm in 2023
What determines the profitability of mining
What cryptocurrency to mine? Mining other cryptocurrencies compared to bitcoin
Conclusion: is it worth mining bitcoin in 2023
The past year has been a very challenging one for many Bitcoin mining companies. During the bullish market growth in 2021, when the psychological mark of the $60 000 bitcoin price was broken twice, many miners bought video cards, ASICs, and farms at inflated prices, hoping to recoup their investments due to further growth in the price of bitcoin.
But in 2022, the cost fell due to the global crisis, the collapse of several large crypto projects, and a sharp increase in inflation, the "crypto winter" occurred, and for many players in the market, mining ceased to pay off. Thus, Messari, a major analytical agency in the field of cryptoeconomics, reported that in 2022 the largest public mining companies sold about 40 thousand BTC from their reserves, up to 98 percent of the bitcoins they mined.
At the dawn of the existence of Bitcoin, people could mine it on almost any home computer. Unfortunately, those days are long gone – the complexity of bitcoin mining has increased millions of times, and bitcoin mining on a simple computer in 2023 is almost impossible (more precisely, unprofitable).
The result was formation of mining farms that are not used for domestic purposes, but are tailored to perform the complex calculations necessary for mining.
So how much does it cost to assemble such a farm? For example, let's take 2 options - graphics cards farms and a ASIC farms
Graphics cards farms
The graphics accelerator of the current generation can be purchased for $800-1200. Let’s assume that you decide to make your farm on 10 graphics cards. Taking into account the accompanying components - a good motherboard, powerful power supplies and a frame, the total price of the farm will be around $12 000-15 000. And we calculated a fairly small, almost home farm for 10 graphics cards.
ASIC farms
For an ASIC solution, prices will be even higher. Thus, the cost of one of the most popular ASICs Bitmain Antminer S19 XP is around $6500 – and usually farms are assembled from at least 5-10 such devices. But for this amount, ASIC farms offer significantly more power and sharpness specifically for cryptocurrency mining, which increases its efficiency compared to mining on video cards.
There are convenient calculators that allow you to evaluate the profitability of mining a particular cryptocurrency on a video card or ASIC. We recommend Minerstat - you can try to build a virtual mining farm on it and evaluate whether such a solution will pay off.
The era of bitcoin mining on simple computers has passed - as we wrote above, now for the extraction of almost any cryptocurrency, you need to build powerful farms and join pools with other miners. But is it necessary to mine bitcoin?
In fact, today bitcoin is not the most profitable and fastest paying currency for mining. BTC is considered the most popular and most famous cryptocurrency, by which many people measure the state of the crypto market as a whole. But this has led to huge competition between miners and a power race - the lion's share of the proceeds from bitcoin mining now goes to large mining companies that can afford to build farms for millions of dollars.
If not bitcoin, then what? The most convenient way to see which cryptocurrency is profitable to mine now is on specialized sites that compare the current profitability of a particular coin. On our own, we recommend Coin Warz - it allows you to quickly and easily see which cryptocurrency to mine and what is the overall situation in the cryptocurrency mining market in 2023.
Top 5 cryptocurrencies worth mining (according to Coin Warz, February 2023)
Our favorite bitcoin is in 6th place - it still makes sense to mine, but it may require more investment and will pay off a little longer.
Advantages:
Disadvantages:
Did you find it interesting?
What factors affect the profitability of cryptocurrency mining?
What are the disadvantages of bitcoin mining?
Is it necessary to mine bitcoin?
What are the forecasts for cryptocurrency mining in the future?
What factors affect the profitability of cryptocurrency mining?
The profitability of cryptocurrency mining depends on the cost of electricity, the complexity of mining and the dynamics of changes in complexity, the power of the equipment, the amount of reward for each mined block, the price of the cryptocurrency you are mining, and the pool fee.
What are the disadvantages of bitcoin mining?
The downsides of bitcoin mining include the increasing complexity of mining every year, significant electricity and equipment costs, high competition in mining, gray legal status in many countries.
Is it necessary to mine bitcoin?
No, not necessarily. Today, bitcoin is not the most profitable and fastest paying currency for mining. The most convenient way to see which cryptocurrency is profitable to mine now is on specialized sites that compare the current profitability of a particular coin.
What are the forecasts for cryptocurrency mining in the future?
On the one hand, you can now buy video cards and ASICs at significantly lower prices compared to their cost during the bull rally. On the other hand, the difficulty of bitcoin mining is growing every year, in order to get the same profit, more and more computing power is needed, and bitcoin mining requires significant costs for electricity and equipment. However, according to forecasts, in the spring-summer of 2023, the bear market will end, and Bitcoin will go up again. Also, there are other cryptocurrencies that can be more profitable for mining than bitcoin. It is important to monitor the current market situation and choose a cryptocurrency for mining based on current conditions and your capabilities.