It is logical to assume that the lower the price of Bitcoin, the lower the profits of mining will be. Bitcoin has seen more than a 50% drop in price from the highs it reached at the end of 2017. According to a report by CNBC, it is no longer profitable to mine Bitcoin according to some expert estimates.
“Bitcoin currently trades essentially at the break-even cost of mining a bitcoin, currently at $8,038 based on a mining model developed by our data science team,” Fundstrat’s Thomas Lee stated.
Interesting to note that the Bitcoin price grew considerably in 2017. Just 12 months ago, the Bitcoin price was hovering around the $1000 mark. Live prices updated here
When calculating the cost of mining, the following are considered:- Cost of equipment, cost of electricity and other variables such as the hash rate, difficulty, Bitcoins per block and the fees associated with mining in a pool, etc. The current number of Bitcoins awarded per block is 12.5 and the last block halving occurred on 9 July 2016. According to the schedule set by Satoshi Nakamoto, the next halving will be in 2020.
One of the reasons that China is a popular country for the mining of Bitcoin is due to access to very cheap electricity produced by hydropower.
Diagram of current mining pool percentage split – Live data here
Current Bitcoin profitability below. For Live updates, go to Cryptocompare – this chart assumes an electricity cost at $ 0.12 per kWh, the Fundstrat model uses a global average of $0.06 per kWh. Hydropowered electricity in China is $0.04 or less per kWh.
Another income stream for Bitcoin miners is transaction fees. These fees have dropped significantly since December 2017 ($34.09) to the March 2018 cost of $0.218. See chart below from Bitinfocharts.com
For more information on Mining profitability – Click Here
Learn more about the ways in which to mine – Bitcoin Mining
Are you a Bitcoin noob – learn more here – How to Bitcoin
Is this bad news for Bitcoin Miners or will the Bitcoin price rally again? Some experts are bullish in their predictions, and others are very bearish. Due to the difficulty of mining Bitcoin, many cryptocurrency enthusiasts are focusing on mining altcoins… Bitcoin Price Predictions Bullish but EOT may be set up for the “Perfect Storm” in 2018
What is your prediction for Bitcoin and cryptocurrency in 2018 and beyond?
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