Bitcoin mining is the process of earning bitcoin by running the verification process of the transaction. These types of the transaction provide security to the user doing bitcoin transaction and in return, miners are compensated by the bitcoins. And the miner can gain profit if the value of the bitcoins is more than that of the mining prices.
But with the change of the technologies, the mining process has changed a lot and now it has become more of a sophisticated process. Only the big guns are in this kind of business in the current market.
There are many factors that define that bitcoin mining as still a profitable venture or not. Factors like the cost of electricity needed to power the computer system, the price of the computer system and its availability and the difficulty of providing services.
Components of the Bitcoin Mining
Before the invention of the bitcoin mining software in 2013, mining was done on personal computers. But after the invention of the ASIC, that provided it services 100x faster than the normal personal computer made the use of personal computer meaningless.
However, the mining of the bitcoins still possible with the older hardware system, but the only question remains that ist it still a profitable venture. As the older software and hardware is all about solving the hashing the problem and then going for the transaction, thereby earning a reward in bitcoins. But the problem they are now facing is they fast enough to solve the problems than the ASIC software. Obviously not, hence, the mining process is close to impossible with the old hardware if you are competing with the new software.
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Profitability Rate Before and After ASIC
User testimonials of the old-time (2010) confirmed the fact that mining bitcoin with the help of using the personal computer was very profitable. The fats are given below:
- As the users already owned a system, therefore there was no additional cost for buying their equipment. They could easily tune up their system and carry on with the mining process.
- There were no professional computers. As the computer was only the other user with the same kind of setting. Hence, everyone was at equal footing. Yes, there was a geographical difference, that made their internet and electricity cost vary from region to region. But the difference was hardly noticeable.
But after 2013, everything changed. As a new company has been formed only for the mining process. All the individuals were competing with professional rigs in the mining industries. The competition made the profit margin as thin as a thread for the personal computer user. As they were forced to buy new equipment just to compete. The difficulty continued. And as the time stand only the professionals are able to do bitcoin mining.
Profitability in Today’s Environment
With advanced technology, bitcoin mining is still possible for only the selected few individuals. The equipments are easily obtained, but the only thing that the individuals have to go through is that ASIC is all over the market, and to do the mining you have to make ASIC your competitor. Before going into the competition, the miner should keep these points in their mind.
1. Cost of the Power
You must be very careful with the electricity cost, as it can depend on the season, day and night and how much you are using for the household purpose.
The efficiency of you system will determine the fact of how much you can save in the mining process.
How long you are going to take for completing the mining process will affect the outcome of the profit.
4. Bitcoin value
It is very important for you to understand what is the current value of bitcoin in US dollars. This will help you know what profit you are going to make at the end of the mining process.
In conclusion, the bitcoin mining process was once an easy career choice but with the new software in the market it has become very hard to compete with them. However, it is not completely out of the picture, if you want to still go with the bitcoin mining, take the points into the consideration that has been mentioned above.