The cost of mining 1 BTC is a formula to determine how profitable mining is. That activity helps maintain the Bitcoin network and allows those doing it to get their rewards faster.
Miners need to consider many variables like the cost of investment in equipment and its maintenance to do their activity. However, a formula developed by the Braiins firm indicates that mining 1 BTC is cheaper than buying it.
The cost of mining 1 BTC with high-performing equipment is lower than acquiring it in the Bitcoin trading market.
The Braiins firm said that 1 BTC obtained with those machines would cost USD 13,000, while worth around USD 37,000 on exchanges.
In other words, winning one Bitcoin through mining costs USD 24,000 less than buying one Bitcoin on the market at the current trading prices.
Calculating the Cost of Mining 1 BTC
Braiins considers several factors to calculate the profitability of mining regarding the cost of mining 1 Bitcoin.
They explained that the following parameters influence: the Bitcoin price, the mining difficulty of the network, the hash rate used, the transaction rates paid, the fees of the Mining Pool, and equipment maintenance costs.
Those elements allowed Braiins to establish how much it would cost a miner to accumulate the rewards of a pool until gathering 1 BTC. He certainly needs to deduce the cost of electricity and maintenance from the processing power used. The above variables also influence, depending on each particular miner.
That formula includes the initial purchasing cost of mining hardware. A high-performing miner could cost up to USD 15,000, leaving the cost of obtaining 1 BTC in USD 28,000. The current price of the pioneering cryptocurrency is around USD 37,000 in the market.
Everything Is as Good as It Seems for Bitcoin Mining
Nobody has said that a miner can get 1 BTC in a short time by himself. According to the above data, it would take that miner six and a half years to obtain 1 BTC.
It is necessary to consider the difficulty of the network changes alongside the hash rate of miners. A growing number of miners connect to the network and contribute their processing power. That will make it cryptographically harder to generate transaction blocks on Bitcoin.
That mechanism prevents a miner with much power from making attacks against the Bitcoin protocol. Likewise, if the hash rate decreases because some miners have disconnected their equipment, Bitcoin reduces its difficulty. In that way, the remaining miners can continue to confirm transactions optimally and efficiently.
Some other factors can influence the profitability and functioning of Bitcoin mining equipment. They include the temperature of the environment and equipment, the efficiency of the mining software, the pool to which it belongs, electricity blackouts, and the Internet connection failures.
The above information leads to seeing the advantages of mining Bitcoin over buying it. For that reason, Chinese miners have looked for opportunities to find places with adequate conditions to operate their business. They can make high profits with the cryptocurrency in the long term.
By Alexander Salazar
