A lot has changed since Satoshi Nakamoto mined the first Bitcoin block on January 3, 2009.
Nowadays, mining has become a more serious and complex endeavor, so it is natural to question whether it is still a profitable activity.
However, to answer this question, we need to split the answer into three parts, each addressing a different scenario.
Bitcoin mining rewards
At the beginning of 2009, Bitcoin mining was done using one software and a single method.
Mines at that time $BTC It was very simple, but in reality their market value was literally equal to zero.
However, at that time $BTC Things started to change when market values (i.e. prices) started to exist.
When it first became available for trading on public exchanges in 2010, its value was approximately $0.06 each. $BTC50 pieces were given as a reward for each block mined, so the reward was worth about $3.
But the following year, it rose to more than $1 and then even to $10. At that point, the reward for each block mined was over $500.
The first halving took place in November 2012, reducing rewards to 25. $BTC However, in 2013, the price of Bitcoin exceeded $1,000. At that point, mining a block meant taking home a reward with a market value of over $25,000.
However, over the next two years, the price dropped to $200, and in 2016 there was a second halving, reducing the reward to $12.50. $BTC Per block, the price soared to nearly $20,000 in 2017, bringing the market value of rewards to nearly $250,000 per block.
At that point, things had already changed, mainly due to the fact that Bitcoin mining was competitive.
Three methodologies
As the market value of the reward for successfully mining a block began to soar, more and more companies began to engage in Bitcoin mining as their primary business activity.
Initially, anyone with a computer could mine blocks, but once professional miners entered the scene, everything changed completely.
Importantly, mining each block (a new block is mined approximately every 10 minutes) is competitive, and only one miner who mines it receives the entire reward. Additionally, this is a competition based on computing power, and those with the most power generally win.
In other words, large professional facilities are much more powerful and efficient than domestic ones, and are therefore highly preferred.
However, over time, so-called pools also appeared, software platforms that combine the computing power of different miners, and then distribute the potential rewards proportionally to all users, based on the actual computing power provided.
In this way, two mining methodologies are possible: solo mining, which seeks to capture the entire reward, or pool mining, which maximizes the chances of successfully mining at least one block.
The first methodology, also Satoshi’s original, now only works if there is excess computing power. The second methodology, on the other hand, can be performed with less computing power (though to a lesser extent), but definitely with lower returns.
However, the third method should be approached with caution. This is so-called cloud mining, which involves borrowing computing power provided by a third party. Unfortunately, those who appear to offer this service are often deceptive, with the sole purpose of deceiving unsuspecting people, but it is something that actually exists and should be considered.
first methodology
The first method you can follow for Bitcoin mining is the original method of solo mining with your own setup.
To determine whether an activity is profitable, it is essential to clearly explain what it is.
Mining is a competition in which only those who can extract the correct hash take home the full reward provided for each individual block, so to do this favorably you must be able to extract at least one or more hashes that validate a block.
The problem is that this competition is usually won by those with greater computing power, making it virtually impossible for small home setups to compete.
For example, Mara Holdings, the world’s largest Bitcoin mining company, is currently estimated to have an operational computing capacity of 50-60 EH/s. A Bitcoin mining machine with around 600 TH/s of computing power costs around $18,000. Since 1 EH/s equals 1 million TH/s, Mara would need more than 80,000 such machines, likely costing more than $1.5 billion in total.
The company successfully mines about 10 blocks per day, securing an average profit of about 31.25 per day. $BTC. Market value is approximately $80,000 per bottle. $BTCMara’s average daily revenue at this point is estimated to be around $2.5 million, which equates to over $900 million annually.
However, from these you must deduct not only the cost of purchasing the machine (more precisely, its annual depreciation), but also, in particular, the cost of the huge amount of electricity consumed.
For example, in 2024, the last year for which official data is available, Mara earned approximately $650 million in total, with a final net profit of $540 million after expenses.
Therefore, large-scale industrial Bitcoin mining can prove to be highly profitable, provided you can invest a large amount of money and, of course, manage the facilities properly.
Second methodology
The second method, which is theoretically accessible to everyone (or almost everyone), is mining in pools.
In this case, the results can be achieved with significantly less computational power than Mara, but not with minimal computational power.
It must be said that nowadays it is impossible to mine anything using a simple computer, let alone a smartphone. This is because the power is so low that the reward for participating in the pool is almost negligible.
In fact, mining today can only be performed effectively using ASICs, which are machines designed, built, and optimized specifically for mining.
Some of the most affordable on the market are 300 TH/s for less than $5,000 each.
Recent estimates suggest you could earn about $10 per day with a similar setup, but you risk running your electricity bill to about $8 per day.
So, if all goes well, you can earn $2 per day, which comes out to just under $800 per year.
At this point, it becomes clear that this type of mining is not actually profitable, as it would take more than five years just to recover the cost of the machinery.
In such cases, only by achieving economies of scale to reduce operating costs and increase total revenue can one envision making Bitcoin mining profitable. However, even this scenario requires skills and expertise that only professionals can realistically succeed at.
Third methodology
In fact, cloud mining is strongly discouraged.
First of all, this is often just a scam, as many of the offers in circulation do not even come from mining companies, but only from scammers aiming to transfer money.
Furthermore, even in the very rare cases where you can actually rent computing power, skill and knowledge are required to optimally configure a miner and make it profitable.
Moreover, cloud mining faces a very serious problem of electricity costs.
With your own settings, you can choose, for example, to only consume electricity during the cheapest hours of the day, or to power your miners with energy obtained at very low costs. If you don’t have access to low-cost electricity, you can choose not to mine at all.
However, in the case of cloud mining, there is no choice of energy supply source as there is no physical access to the facility. In other words, it is impossible to optimize expenses because it is the facility manager, not the user, who selects the financial source.
While the overall scenario described here is unfortunate, it has been well known for years that Bitcoin mining is now reserved for professional companies and not for small individual users.
