Why You Shouldn’t Mine Bitcoin in 2017

How to Mine, and Why You Shouldn’t Do It

Let’s get right down to business. I have decided to resist the temptation of explaining what bitcoin is, it’s history, and all that stuff. A few years ago I covered that in a previous article. The profitability calculations in that article are terribly out of date, but it is getting a lot of views now, which makes me uneasy. So here is an update on the insurmountable problems of mining for bitcoin.

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Mining is Easy but Making a Profit is Impossible

Mining bitcoin is not difficult; anybody who is at ease installing programs on their computer can do it. You don’t need any specialist equipment. You can even mine using the processor only without a graphics card, although GPUs, especially Radeon GPUs are much better at mining than CPUs. Heck, you can even mine using Raspberry. In theory.

In practice you will never mine anything if you do it on your own, and if you do it by joining a pool (which is practically the only viable option, even with sophisticated equipment), you will contribute so little processing power to the pool that you will struggle meeting the threshold payment value that all pools have.

There is also the fact that although mining on a computer you already own might seem free, it isn’t. You must not forget the electricity costs. There is no chance that you will break even, never mind earn any money.

This is because you have to consider another ‘difficulty’, that which is inherent in the algorithm itself, which is set up to produce a constant number of coins per day. This insures that the cryptocurrency retains its value no matter how many people are mining it. As the global processing power hashing bitcoins increases, so does the difficulty.

BTC mining difficulty skyrockets in 2017

BTC mining difficulty skyrockets in 2017 | Source

When only a small number of cryptography enthusiasts were involved in bitcoin mining, the algorithms were easy and it was possible to obtain thousands of coins on a PC. Of course at that time bitcoins had very little value. Once bitcoin became better known, and its value skyrocketed, so did the difficulty of mining a new block. Soon people were putting together mining rigs of multiple graphics cards for bitcoin mining. Then came the asics, dedicated chips that packed the hashing power of tens of computers. But with each technological advance, the difficulty rose.

To give you a quick example I prepaid for a 30GH/s ASIC in 2013. At that time the calculations showed it would mine several BTC a day. By the time I received it the difficulty had changed so much that I was mining 0.01 BTC a day. Today that ASIC is somewhere at the bottom of my junk pile. I have purchased some cloud mining power (yes, it took me a long time to learn the lesson about the uselessness of mining). Computers somewhere in Iceland are doing 1.45 TH/s on my behalf. That is more than 50x the hashing power of my old ASIC, and in the past month I mined 0.003 BTC!

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