Did you know that mining 1 bitcoin is more affordable than buying it directly on the market?
There are certainly many variables, such as the cost of investment in equipment and maintenance, but according to a formula developed by the firm Braiins, mining 1 BTC is cheaper than buying it.
The cost of mining 1 BTC with a Bitmain Antminer S19 equipment is lower than that of acquiring it in the bitcoin buying and selling market.
According said on Twitter firm Braiins, which has software for Bitcoin miners, obtaining 1 BTC with this miner costs $13,000 (USD), while buying that bitcoin would currently cost about $37,000.
That means that earning a bitcoin through mining costs $24,000 less than buying it on the market, at current BTC prices.
How to calculate the Cost of Mining 1 BTC?
There are several factors that Braiins considers to calculate the profitability of mining in relation to the cost of mining 1 bitcoin.
According to one explanatory blog postseveral parameters influence: the price of bitcoin, the difficulty of mining the network, the hashrate or processing power of the hardware used, the transaction fees paid by users (variables), the mining pool fees and the costs of mining. equipment maintenance.
Using all these elements, Braiins establishes how much it would cost a miner to accumulate the rewards of the pool where he participates until he manages to collect 1 BTC. Clearly, to the processing power provided the cost of electricity and maintenance is deductedas well as the variables mentioned above, very specific for each miner in particular.
It is important to clarify that this formula includes the initial purchase cost of the mining hardware. A piece of equipment like the one mentioned, the Antminer S19, could cost up to USD 15,000, which even, including it, would leave the cost of obtaining 1 BTC at USD 28,000, considering the current price of USD 37,000 in the market.
The image above reads as follows: on the left vertical axis we have the cost of mining 1 BTC. On the right vertical axis, the return (or loss) in dollars (USD). On the lower horizontal axis, we have the cost of electricity in USD per kilowatt hour (kw/h).
Thus, based on the data entered into the Braiins calculator for the purposes of this example, we have it costs an Antminer S19 miner USD 9,318 to mine 1 BTC$28,355 less than the current price of bitcoin.
The same miner would generate 0.00041853 BTC (41,853 sats) every 24 hours, the equivalent of USD 11.87 per day, if he paid USD 0.2 per kWh of electricity consumed monthly.
Is everything as good as it seems for Bitcoin mining?
One second. At no time is it said that a miner by himself can obtain 1 BTC in a short time. In fact, if we take accounts with the same data that we have been handling, this miner would take 6 and a half years to get 1 BTC.
In addition, we must take into account that the difficulty of the network changes along with the hashrate of the miners. As more miners connect to the network and contribute their processing power, the more difficult it will be cryptographically to generate transaction blocks in Bitcoin.
This mechanism is configured like this in Bitcoin to prevent a miner with a lot of power from perpetrating attacks against the protocol. Similarly, if the hashrate decreases, implying that some miners have been disconnected, Bitcoin reduces its difficulty so that the remaining miners can continue to confirm transactions optimally and efficiently.
Likewise, some factors can also influence the profitability and operation of Bitcoin mining equipment, such as the ambient and equipment temperaturethe efficiency of the mining software used, the pool to which it is connected, or external circumstances such as power outages and internet connection drops.
Considering this, it remains to say that the formula Cost to Mine seeks to provide a perspective on the feasibility of Bitcoin mining as a businessas well as being a statistic to estimate the performance of our teams.
In fact, it should also be clarified that Bitcoin miners not only have their main activity (confirm transactions) as their only source of income, but they have already entered the stock market as companies, in the energy market (gas and oil ) and in financial instruments such as loans collateralized with BTC.