The eternal doubt. Since the popularization of cryptocurrencies back in 2013, the profitability of mining Bitcoin and other less popular cryptocurrencies has been called into question due to the high cost that this entails. Over the years and the evolution of the different cryptocurrencies, the difference between cost of production and gross profit has been expanding even further. This equation, of course, includes the cost of kWh, which can vary depending on the country. This leads us to ask ourselves the obvious: is it really profitable to mine Bitcoins in Spain?
Forget about mining Bitcoins with your graphics card
So is. Since 2013, the year in which Bitcoin exceeded the barrier of 800 euros, the paradigm of cryptocurrency mining would change completely with the arrival of ASICs , also known as Antminer.
These integrated circuits are designed to perform a single function: to mine Bitcoins with the highest energy efficiency and computing power possible. If we ignore the technical characteristics of this type of device, the arrival of ASICs to the world of virtual mining meant taking this task to a much larger scale .
It was then that the first mining farms began to emerge. Until 2013, the task of solving chains to obtain economic profit operating with virtual currencies was limited to a domestic environment . Later entire industries in countries such as China or Russia dedicated part of their efforts to creating large areas dedicated to mining cryptocurrencies.
To understand the power of these devices, we have to refer directly to their ability to solve calculations in H / s, that is, hash rate per s econd or hash rate per second. In models like the Antminer S9, this rate can exceed 14 TH / s , that is, 14 trillion calculations per second. Its price? About 3,000 euros .
The recent increase in the hash rate makes mining Bitcoins with household equipment little or not profitable.
On the other side of the coin we find graphics cards like the Nvidia GTX 1080, with a computing capacity of just 16 MH / s . The starting price of the latter was about 1,000 euros, although today it is outstanding.
The key to obtaining a return on investment lies precisely in having multiple ASICs or GPUs connected in parallel , since the processing power of an Antminer S9 or a GTX 1080 does not cover the initial expenses involved in investing in such equipment. features. We'll talk about this later.
The value of kWh: the other great determining factor in the equation
Mining Bitcoins not only means making large investments in equipment dedicated to the resolution of operations, but also in electricity.
Although this largely depends on the country, mining virtual currencies in developed countries means investing part of the profit obtained by this type of device in energy consumption . Let's go back to the example of the Antminer S9 and the GTX 1080.
The consumption of the first is close to 1,300 W on average, which would mean a daily maintenance cost of almost 4 euros , depending on the cost of light. If we talk about the Nvidia model, the cost of it alone is 180 W.
If we add the rest of the components, such as the processor, the hard disk or the RAM, we could find ourselves in peaks around 300 W. The total energy consumption of the set in a day of production would be about 90 euro cents . Suppose it is 1 euro to round the figures. What return value would we get back?
Nvidia GTX 1080
Making a calculation with rounded values, the return value of both environments would be 12 euros in the case of the first and 3 euros in the case of the second. If we extrapolate these figures to a whole year of production, we would obtain a return value of 4,380 euros in the case of the Antminer S9 and 1,095 euros in the case of the Nvidia graphics card . Not counting the taxes on the maintenance of the meter or VAT.
In both cases we exceeded, by very little, the initial cost of the equipment. To this we must subtract the wear and tear at the hardware level that involves having a team working at full capacity 24 hours a day, 365 days a year, which would mean making certain investments over the years to replace components subject to failures .
What about Cloud Mining?
There is a branch of cryptocurrency mining that is based on hiring a small part of a farm to carry out operations remotely. The problem is again found in the profitability of this type of method. Proof of this is that today few companies offer to mine Bitcoins. Most offer Dash, Ethereum, Litecoin, Monero, and other cheaper - and more profitable - mining options.
If we take a look at the Genesis-mining platform, for example, hiring 5 TH / s for 24 months means paying 226 dollars, about 204 euros to change . To this are added certain charges for maintenance, which is about $ 5 a day (4.50 euros) in the 5 TH / s plan. The total cost per year would be about 1,642 euros, which is added directly to the 102 euros that we obtain from dividing the 204 euros of the biannual fee. In total, about 1,750 euros on average .
What daily return would we obtain? Only 3 euros on average. If we multiply this figure by 365, the result is less than 1,100 euros per year . It is not necessary to carry out more operations to realize that hiring this type of service is not profitable.
Trading Bitcoins is more profitable than mining Bitcoins
Although at this very moment operating with Bitcoin is not the most profitable, as we saw in this other article, the truth is that it exceeds the profitability of mining Bitcoins and possibly any other cryptocurrency.
If we had invested, for example, $ 1,700 at the beginning of the year, when the value of the BTC was at $ 3,000, we would have obtained a gross profit of about 2,000 euros , somewhat less if we take into account the interests that are applied when operating with coins. Had the assets been sold during the months of June and July, when the value oscillated in the range of 11,400 euros, the profit would have amounted to 4,700 euros .