Is crypto mining still profitable in 2021? Complete mining guide for beginners from an expert with years of experience. Latest market trends and secrets of mining profitability.
Cryptocurrency mining profitability in 2021.
Hey guys! I can't say my name is Jihan Wu, but I have enough experience in profitable crypto mining. It is not the first year that I have been mining the main cryptocurrency: I did it both on my equipment and using cloud mining; I did it with both bears and bulls; I did it both profitable and unprofitable.
There is a lot of information on the Internet about the technical specifications of equipment, electricity prices, and what Elon Musk eats. Still, no one would answer if mining cryptocurrency is worth it in 2021 or not. So let's fix this.
Is crypto mining still profitable in 2021?
Due to the complexity of the network and the latest halving, many people think that crypto mining profitability is very low. As if it was left in 2017. But in fact, everything is exactly the opposite. If we look at the Coinbase stats on the total amount of block rewards and transaction fees paid to miners, we can see that miners' revenues are now 50% higher than at the 2017 peak. $60 million a month. Sounds good, doesn't it?
But this is the total income that both corporations with large data centers and private miners received. It is impossible to say exactly how the shares are distributed, but experience suggests that companies received more. It can be understood by the factors that determine crypto mining profitability.
General factors of mining profitability
Bitcoin hash rate is the total computing power of all mining devices connected to the network. It increases and forces you to buy more powerful and expensive equipment in order to get a mining reward. But if this is quite feasible for a large company, then not every private miner has the capital to re-equip his rig.
An increase in the hash rate leads to an increase in the difficulty of the network, which means that the profitability per device decreases. Therefore, those who have many of the most powerful devices win.
Network difficulty is an indicator of how difficult it is to mine a new block for the network. The higher the difficulty, the more computing power is needed to mine the same number of blocks. This process makes the blockchain more resistant to attacks.
The difficulty changes proportionally to the hash rate. This parameter is also common for everyone.
The block reward or mining reward is the amount of cryptocurrency that the miner receives for creating a new block (finding a solution that will allow the block to be on the blockchain). Initially, the block reward on the bitcoin network was 50 BTC (sic!). However, this did not last long. The block reward structure in Bitcoin is designed so that reward is halved every 210,000 blocks.
Since the block time of bitcoin (time to create a block) is 10 minutes, there is a decrease in the block reward approximately every four years. At the moment of writing this text the block mining reward is 6.25 BTC. Thanks to halving, bitcoin is not afraid of inflation and this increases the value of each coin.
Individual factors of mining profitability
But enough about rewards! How about costs and entry thresholds? These are perhaps the main factors that determine your mining income. And in most cases, they are difficult to change. The cost of electricity depends mainly on your location.
If you are lucky and were born in Venezuela, then congratulations! Your electricity is cheap, which means mining cryptocurrency will be worth it. If you live in Germany, then forget about home mining. Or just move to another country...
Cost of equipment
It is the most exciting part, especially in 2021. The market faced a shortage of microchips, and the cost of equipment skyrocketed. Yes, along with the cost of bitcoin, the equipment that mines it has risen. If earlier WhatsMiner M31 S 66 TH/s cost $2250, now its price is about $5000. To recoup the cost of this miner, you need about 416 days (with the profit of $12 per day).
But how long will a crypto mining rig be profitable? Look again at the graphs of network difficulty and hash rate. And don't forget about the shortage of equipment! Even if you have money for it and it will be relevant for a long time, it is not a fact that you will find where to buy it. Manufacturers are loaded with orders until the end of 2021.
By 2021, the market situation has developed so that it is difficult for an ordinary person like me or you to get income by mining bitcoins at home. Large associations of miners and corporations take all profits.
Therefore, I consider cloud mining to be the best option in the current situation (that’s why cryptouniverse.io was created). It allows you to rent the computing power in a large data center and receive personal income. By the way, you don't need any hardware at all! You don't want to heat Siberia, do you?
Throughout the history of Bitcoin, it was possible to earn money by mining it. And today crypto mining is profitable. But there have always been different ways. We have passed the era of CPU mining, GPU mining, and mining on ASICs. Well... welcome to the new era of cloud mining!