Step 1 – Calculation – Is Bitcoin Mining Profitable?
In the early days of Bitcoin mining, people could easily mine with a mid-to-high end Graphics Processing Unit (GPU). However, as the popularity of Bitcoin increased, more and more people took up mining professionally. Now, given the amount of time and power it takes to mine Bitcoin, the first thing you need to figure out is if your investment is worthwhile.
There are three variables you need to take into consideration.
Hashing power is a measure of how powerful your mining rig is. Hashing power is measured in Hashes per second, and the best mining rigs usually have a processing power measured in Gigahashes per second or even Terahashes per second. The more powerful the rig, the faster the mining will progress.
Mining rigs consume electricity proportional to their processing power. The more powerful rigs draw in large amounts of power per hour, and all that power used costs money.
So this is the calculation you must perform before you decide to start mining. If you want to invest a certain amount of money into mining, the first step is to make sure that the Return on Investment is enough. After all, what’s the point of mining if it’s not going to turn the profit?
There are plenty of profitability calculators that you can use. Simply plug the three variables into the calculator and see if the amount you will mine is more than what you’ll spend setting up and running the operation.
If the projected earnings are more than the expenses, then setting up the mining operation will benefit you and you can move on to the next step.