Many people today, after the rise of BTC price, are considering to start Bitcoin mining. But is this a good long term investment? The reality is, that it depends on many factors.
The key factor for mining in general is the cost of electricity. For example, if someone has solar panels or other means of power supply with renewable energy, mining bitcoins is one of the best investments someone can do.
But as an individual you have to be very lucky to have that or live in a country where electricity costs are low. At the moment, Bitcoin mining uses around 70% renewable energy, so for these individuals or companies, mining will be profitable even if price goes down a lot.
Now, what about a normal person? Can, a normal person with normal electricity costs, be profitable as things are today? The answer is yes, but without any warranty for long term.
So let’s make an example of what a normal person can really do with mining at the moment. In order to start we will need a Bitcoin mining machine known as ASIC.
The best solution out there is Antminer S17 from BITMAIN which can generate up to 53 TH/s for 2800 watts and costs around $1600. With normal power costs of 0.11$ per kW/h and today’s price of around $11800, we could make around $600 per month worth of bitcoins and use them to pay the electricity bills that would be around $221 per month. Our profit per month would be around $379. Not bad for one month.
The problem is that Bitcoin difficulty will rise and eventually we will make less and less bitcoins until we are no longer profitable and we have to shut down the mining machine.
I won’t describe a situation where bitcoin price rise so much that even if we make less bitcoins, they will worth more and we will still be profitable. That is only a speculation we cannot take for granted.
So for short term an individual can make a good investment but in order to maintain the profits he has to get more ASICs after a while, and has to continue to do that in long term if he still wants to be profitable.
My point of view on mining is that if you solve the electricity problem you can be profitable for any mining machine you got on your hands.
If you want to do your own calculations on mining you can use our Bitcoin mining calculator and see how much profit you can have based on electricity costs, hashing power and the price of bitcoin.
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