Bitcoin Mining is an extremely profitable endeavour if you’re a mining company based in China. Mining is growing at an exponential rate and companies are eager to provide it.
That said, the amount of mining rigs in the world is still incredibly small in comparison to the number of bitcoin transactions. Miners are buying extra hardware to boost their speeds to meet demand, while bitcoin mining hardware is not cheap, often costing thousands of dollars each. Mining does not have a real-world value to it unless it becomes widespread in the future. In reality, all that matters to most miners is bitcoin’s price.
The biggest obstacle to mining today is electricity. Thanks to Chinese electricity tariffs, miners in China can make bitcoin mining profitable even when the price drops below $3,000.
That makes mining a short-term scheme if you’re just trying to make profit. Just think of it as a business which increases in value as bitcoin increases, rather than a long-term plan.
Investing for the Future;
For the time being, mining has a real-world value and the energy and electricity costs to mine bitcoin are an investment for the future. Miners are looking into new mining methods, and they’re mining more and more bitcoin for investment purposes. The global mining network has over 120,000 rigs. The energy costs for bitcoin mining have dropped considerably thanks to better energy efficiency.
Since electricity tariffs are relatively cheaper in the rest of the world, miners are bringing mining operations to countries such as Switzerland, the Netherlands and the United States.
In China, electricity costs are still a huge obstacle. Mining is booming in China, and the energy costs are ridiculously high in comparison to anywhere else in the world. As a result, most Chinese miners left the country to operate in countries like Malaysia and Singapore. The electricity costs are so high that miners who cannot buy or produce their own electricity are just watching bitcoin mining from the sidelines.
The problem with this is that miners who try to do mining without the help of foreign power suppliers face serious difficulty. If they fail to meet the demands of their bitcoin investments, mining will not be a profitable endeavour anymore. As such, the idea of bitcoin mining without electricity tariffs may seem like a far-fetched idea in the future, but the number of bitcoin miners remains relatively small and they are looking into new ways to mine bitcoin.
When will Bitcoin Mining Be Worth It?
By 2022, bitcoin mining may be worth the investment. Or it may have already become a small business. It is hard to tell.
It depends on what value people have attached to the bitcoin network. There are people who believe that bitcoin mining will just gradually increase in value, but there are also others who see bitcoin mining as a pointless venture. Even the core developers of bitcoin consider mining as an unnecessary risk. Even if there are only a few bitcoin miners in the world, they contribute billions of dollars worth of electricity costs.
If the bitcoin network continues to increase in value, there will always be more miners mining for it. Mining will also be a worthwhile investment for a few people who value it for its actual value in the future. The biggest challenge for bitcoin investors will be making sure that the bitcoin mining is worth the investments.
Fewer mining rigs and cheaper electricity have created some amazing opportunities for new investors in bitcoin mining.
But at the end of the day, there is still a big problem regarding the global bitcoin mining network. As more bitcoin nodes become activated on the network, the operation will become more expensive. The more bitcoin transactions get processed, the more mining becomes profitable.
The energy and electricity costs are one of the reasons why bitcoin mining is so difficult. Because of that, it may be good to take advantage of the cheaper electricity costs when bitcoin mining can be worth the investment. There will still be lots of ways to mine bitcoin for a relatively small amount of investment. If you want to start mining bitcoin and want to be on the safe side, you may want to make sure that the mining is actually worth it. If it is not, you may not want to invest.
Miners will also be facing less pressure for lower electricity costs. As the bitcoin network increases in value, bitcoin mining will actually become a legitimate business. People will want to mine bitcoin for investment purposes.
Most investors think that they will make money from mining in the future. But investing in bitcoin is a risky business. You have to accept a lot of risk before you can make a profit. With bitcoin mining, the risk is much higher. The possibility of losing money from mining is quite high.