Calculating Bitcoin mining profitability realistically

Before you buy a miner, assess the profitability realistically. One thing up front: with a single home miner you are dealing with probabilities, and a reliable profit is not on the table. This guide shows which factors matter and how to work out roughly what is left.

The four factors that decide

• Your hashrate (TH/s): your share of the global computing power.
• Network difficulty and hashrate: they rise over the long term and shrink your relative share. The difficulty adjusts roughly every two weeks.
• Block reward and fees: currently 3.125 BTC per block plus the transaction fees.
• Your electricity costs: the largest running cost, see Calculating electricity costs.

Example calculation: pool mining

In a pool you are paid in proportion to the work you contribute. The return is small but predictable. A rough calculation for a Bitaxe with 1 TH/s at ~800 EH/s network hashrate: about 450 BTC are newly issued per day (144 blocks × 3.125 BTC). Your share is about 1 ÷ 800,000,000 of that, so around 0.0000006 BTC per day. Even at a high price that is a few cents per day and usually below the electricity costs of a Bitaxe.

So with a single small device, pool mining rarely covers its costs. The picture only changes with considerably more hashrate or very cheap electricity, for example solar surplus.

Solo mining in the calculation

In solo mining you statistically receive nothing for a long time, and then possibly a whole block at once. The expected value per day is mathematically similar to the pool, only extremely unevenly distributed: usually zero, very rarely everything. That makes solo mining a draw for the block, as described in Lottery miner explained. It is no investment.

Use online calculators with care

Online mining calculators give a rough indication but often assume constant difficulty and ideal conditions. In reality the difficulty tends to rise and the Bitcoin price moves a lot. Plan conservatively and treat a possible block as a bonus you do not count on.

What about break-even?

With a small Bitaxe, mining income alone will statistically hardly pay back the purchase. What you get in return lies elsewhere: you learn how Bitcoin works, you add to decentralisation, you can use the waste heat, and if you mine solo, there is the small chance of a block. If you only look at returns, you should know this before you buy.

Realistic expectation: home mining costs a few euros a month and is fun. If you hope for a sure profit, you will be disappointed; if you see it as a hobby, you rarely will be.

Still want to try it, with your eyes open? Start small with the Bitaxe Gamma 601 or get an overview of running costs and placement on the home mining page.