Bitcoin mining needs to consider four major issues: electricity and equipment costs are the biggest

Bitcoin mining has become a competitive industry in the cryptocurrency industry. With all the large data facilities and Bitcoin mining pools being built, people often wonder how they can get involved in Bitcoin mining.

People want to know how to participate in Bitcoin mining? Image source: Golden Finance

A few calculations before starting Bitcoin mining

Many people are interested in small-scale Bitcoin mining projects, preferably in a home environment. However, as the Bitcoin mining industry develops, it is becoming increasingly difficult to make money from home Bitcoin mining. Therefore, if individuals want to join the Bitcoin mining industry, they need to carefully calculate a number of relevant factors to determine whether it is worthwhile.

Several calculations before starting Bitcoin mining Image source: Golden Finance

Generally speaking, if you want to mine Bitcoin, you first need a Bitcoin mining machine.

Next, new Bitcoin miners need to check some statistical data, such as the hash power of their own Bitcoin mining machines, the current total hash power of the Bitcoin network, the difficulty of Bitcoin mining, and the amount of electricity and electricity costs consumed when running these own Bitcoin mining machines. New miners need to collect these data to evaluate their advantages and competitiveness in the Bitcoin mining industry.

Currently, application-specific integrated circuit (ASIC) mining machines have become the dominant force in the Bitcoin mining industry, and building pre-installed mining machines specifically for Bitcoin mining is becoming the mainstream of the industry.

Four variables

Hash Power

Some well-known custom Bitcoin mining equipment manufacturers are able to provide new miners with a Bitcoin mining machine's hash rate value, or the mining speed that the mining machine is capable of when running. This statistic can be measured against the current Bitcoin network mining difficulty. It can give a rough idea if the machine is running well.

Schematic diagram of global hash power distribution. Image source: Golden Finance

electricity

One of the biggest costs of Bitcoin mining is electricity. The return on investment (ROI) of a Bitcoin mining machine is usually measured by dividing the hash performance of the Bitcoin mining machine by the wattage consumed.

Large mining facilities have been reducing electricity costs by utilizing more different types of power sources, such as hydroelectricity. In the world, electricity costs are relatively cheap in China and India.

Electricity is the biggest cost of Bitcoin mining. Image source: Golden Finance

Equipment cost

Another issue in calculating whether Bitcoin mining is worthwhile is the cost of Bitcoin mining equipment. Generally, the price of a new customized Bitcoin mining machine ranges from $500 to $2,000, depending on the performance.

Other things to consider are purchasing connectors for multiple Bitcoin miners to connect all of them to the world, and keeping a small amount of capital on hand to replace parts.

Hundreds or even thousands of Bitcoin mining machines are also expensive. Image source: Golden Finance

Time and maintenance

Bitcoin mining also requires time to maintain the operation of the machines, just like a factory full of computers. Factory parts may fail, and Bitcoin mining often requires the replacement of fans because the equipment needs to be cooled when running. At the same time, new miners need to master certain computer knowledge, install software, and maintain normal Internet communication, etc.

Do a good job of maintaining the Bitcoin mining room Image source: Golden Finance

Getting into the Bitcoin mining industry is not easy, and it can be difficult to justify the initial investment. For some Bitcoin miners, it can currently take a year or more to get a return on investment. Additionally, Bitcoin miners must maintain a high level of performance because there are more variables to deal with when starting out with Bitcoin.

Since individual mining is extremely difficult, there is currently a trend of individuals joining Bitcoin mining pools in order to have a better chance of obtaining rewards.