March 12th, 2018
As Bitcoin becomes more popular, Bitcoin “mining” is getting a lot more attention as well. People want to know if mining for Bitcoin is worth the time and money spent and if it’s possible to mine Bitcoins for profit. What was once a simple answer, has become complicated and many factors need to be taken into consideration before mining. Bitcoin mining can either be a great financial endeavor or it can lead to financial ruin. Bitcoin mining has a complicated history, before you begin mining for Bitcoin, let’s take a look into the past.
For many, Bitcoin mining has been a very profitable business for quite a long time. There are now special tools and hardware that have made the Bitcoin mining process fast and easy. Individuals who successfully optimized GPUs or acquired FPGA in 2013, were lucky enough to earn a huge profit. ASICs was also considered to be an ideal mining device that was able to make an incredible profit. However, Bitcoin mining experienced a huge shift from the GPUs/FPGAs to the rise of the ASICs mining device. The introduction of ASICs was a complete game changer. By increasing the efficiency of mining Bitcoin by a huge magnitude it completely destroyed any profitability that would be gained by using more traditional computers.
In early 2013, the Bitcoin mining ASIC was launched. No other company had produced a functional BTC mining ASIC before that time. Avalon was the first company to develop, manufacture, and sell this high performance mining “rig”. With the ASIC the Bitcoin miner would now be capable of mining over 15 BTC per day. This was a big deal since anyone who was associated with Bitcoin mining would consider himself lucking if he or she were to get .0007 BTC with the same hash rate.
Bitcoin mining has a close relationship with the price of Bitcoin, but this link doesn’t ensure you stability. As long as there is a link between Bitcoin price and total mining power of the network, they will continue to remain close. The changes in the value of Bitcoin will only affect those individuals that are already barely making a profit. This is the reason that miners will receive more Bitcoin hashing power when the prince and the difficulty of mining declines and less when the price and difficulty of mining increases. It seems that each day Bitcoin mining is becoming more difficult.
If there was to be a breakthrough in ASIC technology (though unlikely) this would create a new hurdle for miners to jump. This would also impact older ASICs, but not the price and overall value of Bitcoin. If there is to be a sharp decline in the price of Bitcoin this would making mining not very cost effective and the difficulty would need to be adjusted. However, if this scenario were to play out the result would be a sharp drop in difficulty, which would instantly increase mining power, but until this point is reached the current network could become chaotic and unreliable.
Outside of these types of cases, difficulty should tend to stabilize to the extent of Bitcoin’s value. This would imply that yes, Bitcoin mining is worth it- in most cases. But in the end it’s up to you to decide if it’s worth it to you or not. If you are eager to become a Bitcoin miner, it is important to do research before starting out, make sure to choose products and information from Bitcoin companies you can trust.