There are numerous variables in Bitcoin mining, which is one reason Earnity’s Domenic Carosa and Dan Schatt believe purchasing bitcoin on an exchange can be a more straightforward way to profit for most people. However, when done correctly, mining bitcoin can generate a higher profit than simply purchasing and ‘hodling’ — the act of not selling your bitcoin.
The price is among the essential variables for miners. Suppose, like most people, you pay for your mining hardware and electricity in dollars. In that case, you will need to earn enough from mining to cover your ongoing costs while also recouping your initial equipment investment.
The Bitcoin price, of course, has an impact on all miners. However, Earnity’s industry experts, Domenic Carosa and Dan Schatt, believe three factors distinguish profitable miners from the rest: low-cost and efficient hardware and a good mining pool.
1. Efficient Equipment
There are many manufacturers to choose from these days. Additionally, the amount of energy the machine consumes compared to the amount of computing power it produces primarily determines hardware cost. The more computing power your computer has, the more bitcoin you can mine. At the same time, the less energy you use for mining, the lower your monthly costs.
According to Earnity’s industry experts, Domenic Carosa and Dan Schatt, it would be best for miners to consider the machine’s profitability and longevity when deciding which device to invest in and use in mining.
Electricity prices differ from one country to the next. Many countries also charge lower fees for industrial electricity to stimulate economic growth. Thus, a mining farm in Russia may pay half as much for electricity as a mining farm in the United States.
3. Dependable mining pool
Nowadays, every miner is required to mine through a mining pool. The network of Bitcoin mining machines is so extensive that your chances of finding a block (and thus earning the block reward and transaction fees) are extremely low if you try to mine independently.
As the mining difficulty rises and the price falls, it becomes increasingly difficult for small miners to profit. In the end, it all comes down to scale and access to lower-cost options. In addition, when newcomers enter the mining industry with no prior connections, they find it difficult to compete with established mining operations.