Is Bitcoin Mining Profitable?

There are several factors that affect bitcoin mining profitability

Reviewed by JeFreda R. BrownFact checked by Melody KazelReviewed by JeFreda R. BrownFact checked by Melody Kazel

Bitcoin mining is still profitable if you have a capable system, join a mining pool, and can pay off your fixed expenses in a reasonable amount of time. However, any expectations of digital riches should be tampered with reason. There are many people and wealthy organizations engaged in the activity, making it difficult for all but a few to reap the legendary rewards mining bitcoin used to promise.

However, this doesn’t mean you can’t make money mining bitcoin—it just won’t be as lucrative as it used to be. Joining a pool and connecting a good home mining rig might net you a few hundred dollars monthly (if you’re lucky) before you account for your expenses.

Key Takeaways

• Bitcoin is mined using systems specifically designed for it or by using up-to-date graphics processing units on more dedicated mining systems.
• Bitcoin mining profitability is affected by equipment and electricity costs, the mining difficulty, and Bitcoin’s market value.
• After accounting for the costs of Bitcoin mining, it can become profitable if the market cooperates.

Individual Profitability

Bitcoin mining remains profitable for some individuals. Equipment is more easily obtained, although the cost of competitive ASICs varies from a few hundred dollars (used) to thousands (new or hosted).

Prospective miners should perform a cost-benefit analysis to understand their break-even price before making fixed-cost equipment purchases. Variables to consider include the purchase price, cost of power, efficiency, time, and Bitcoin market value.

Initial Setup

Several factors determine whether Bitcoin mining is profitable, including the cost of electricity to power the mining machines, the speed of your miner(s), its cost, and mining pool payouts.

Here are some general steps for analyzing whether mining will be profitable for you:

Choose the Mining System

You can use your home computer to mine if it is an up-to-date system with the latest and fastest CPU, GPU, storage, and cooling. But home computers, regardless of how fast they are, cannot keep up with dedicated mining systems but can still generate small amounts of income. This guide doesn’t cover home computer mining because even top-of-the-line GPUs in October 2024 cannot mine Bitcoin fast enough to realistically become profitable, even in a pool.

A dedicated mining system is composed of application-specific integrated circuits programmed specifically for mining. These cost about as much as a new high-performance desktop computer (sometimes more). Some of the ASIC brands and their price ranges are:

• Antminer: $1,320–$14,521, speeds from 120TH/s to 473TH/s
• Whatsminer: $540–$8,569, speeds from 102TH/s to 412TH/s

Prices and availability vary, especially for the less expensive models.

Mining Pools 

You’ll need to choose a pool based on its size, reputation, how it pays, whether there are any fees, and your chances of earning based on how much work you provide to the pool.

Two common payout methods used in Bitcoin mining pools include proportional mining and the pay-per-share method. In a proportional mining payout method, miners receive rewards proportional to the amount of effort expended in finding a block. The payout amount also depends on whether the pool finds a block, and this payout method is profitable when the price of bitcoin surges.

The pay-per-share method distributes payouts based on the mining power of the entire pool, which is the opposite of a proportional mining system. A miner’s share is determined not by their effort but by an equitable division of the rewards received by the pool. A miner receives their reward regardless of whether the pool finds a block. Since it guarantees a flat fee, this payment model is best suited for periods when the Bitcoin price is low.

Bitcoin Mining Cost Analysis

To determine whether you’ll be profitable, you can use an online mining calculator. BTC.com’s calculator was chosen for this example because it is comprehensive and uses the pay-per-share payout method, one of the most common pool payouts. Here, the values are for the Antminer S19 XP, one of the more popular mining systems.

On the page, you ensure the information is accurate on the left-hand side of the page by choosing your currency, making sure the Single Miner Cost field is accurate, and entering the number of miners you’re evaluating. Make sure the hash rate is correct and estimate your electricity costs. In this example, $0.13 is used because it’s a common price per KW/h. Leave other fields at their defaults and click “Calculate.”

Once you click “Calculate” you’ll see results on the right side of the page.

On the top, you’ll see the total profit, revenue, electricity costs, and other information. The period calculated was one year, so you can see a field on the right that says “Days to Payback.” This shows you wouldn’t be able to pay off the miner and become profitable in one year if everything remained the same.

You’re also presented with “Maximum Mining Days (profit>0)” which tells you how many days it will be before you begin turning a profit—which is when you’ve received back the total cost of the system if nothing else changes. In this case, it was 660 days.

Enter the information from each of the miners you’re evaluating, and find out which one might have the shortest payback period.

Below that, you can find payouts based on estimated network hash rate increases for two-week periods, which are the result of the Difficulty Increase value on the left. You can play with these values to learn more about how they affect your profitability—an important field to adjust is the “Price” because Bitcoin’s price moves constantly. By changing this, you can see estimates of how long it would take for you to recoup the system’s purchase price.

So, to answer the lingering question—is it profitable to mine Bitcoin? It can be, depending on its price, the market, the difficulty level, the network hash rate, and the pool’s payout scheme.

How Much Profit Do Bitcoin Miners Make?

It depends on several factors, the most important of which is Bitcoin’s market price. The higher its market value, the more they can make after accounting for equipment and electricity costs.

Can You Make Money From Bitcoin Mining?

Yes, although, as a solo miner, you might not make as much as you’d like. Joining a pool can help, but on a good day, you’ll only earn a few dollars—probably less than you spent on electricity.

How Long Does It Take to Mine 1 Bitcoin?

Bitcoin blocks are opened about every 10 minutes, and the block reward is 3.125 BTC. There isn’t any way to mine only 1 bitcoin.

The Bottom Line

Bitcoin mining is the process by which miners earn bitcoins in exchange for running the verification process to validate Bitcoin transactions. With increasing difficulty levels and the number of large institutional players in the Bitcoin mining ecosystem, economics have changed.

Individual miners should perform a cost-benefit analysis, considering variables such as set-up costs, electricity costs, efficiency, bitcoin price, and pool payout schemes before deciding to mine.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info. As of the date this article was written, the author does not own cryptocurrency.

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