The December of 2017 was surely a strange month when the world suddenly became aware of bitcoins and crypto currencies in general. Thousands of entrepreneurs and enthusiasts jumped on the hype train of BTC mining. What have changed in the industry since then?
While thousands of people still find it financially reasonable to continue mining bitcoins, it is a riskier venture than a decade ago. There are three main contributing factors that introduced additional uncertainty to the BTC mining industry.
The entry “fee” is much higher. During the dawn of BTC mining, you could use your regular PC and mine BTCs without much problem. However, staying competitive today requires you to purchase expensive rigs that have massive computational capabilities. A new ASIC rig can cost anywhere between $500 and $10000 depending on the quality of components and computational output. Maintaining such machines is also expensive.
Halvings affect your rewards negatively. One block used to reward a miner with 50 bitcoins before 2012. After two halvings, we arrived at the 12.5BTC reward for a single block. It means that you are paid four times less for the block compared to the beginning of bitcoin. Combined with bigger requirements for computation, halvings are quite significant. On the other hand, the price of a bitcoin skyrocketed and now hovers above $9000 steadily.
The competition is fiercer. A recent report said that over 50% of all BTC operations are situated in the Sichuan province of China. There are many mining pools with several mining companies pulling together their resources in order to increase their production rates. It is harder than ever for a lone miner to get a jackpot.
The recent changes in the industry certainly discouraged some miners from trying to focus on mining bitcoins or forced them to shift to other crypto currencies. There is ETH and litecoin meaning that you can use your rigs to try your luck in other areas. Nevertheless, BTC is still the most expensive and appealing currency out there. Getting 12.5BTC means earning about $100 thousand. It is a huge incentive for all crypto enthusiasts in the world.
You can buy used rigs and carefully tune your systems to reduce the power consumption to acceptable levels while maintaining a significant computational power allowing you to mine bitcoins without investing too much in your setup. A second hand Antminer S3 or D3 can be purchased for less than $150. Setting them up can be tricky but it is a rewarding experience for people who are interested in tech.
All in all, it is still profitable in the long run and allows you to earn BTC investing the future. There are no indications that the price of the currency will drop dramatically during the upcoming decade. It seems that the market also stabilized. As with any other enterprise, mining operations carry considerable risks with them. However, those who believe in a brighter future are more than optimistic about nearing halving in May, 2020, and other developments in the BTC mining industry.