question How do I Calculate Mining Profitability?

CoinExpert

CoinExpert

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Jun 17, 2018
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Special calculators are going to help you to solve this uneasy problem. Knowing your hardware hashrate you can try to find out a potential profit for the certain amount of time. However, taking hashrate instability in count, you can’t think of the calculator answer as the very accurate result. This is why, you simply have to always use a few of them and then find out the average value.

If you don’t want to waste time looking for the right calc for yourself, you can pay attention to the resource called Cryptocompare (it supports a variety of coins including BTC, ETH, ZEC, XMR, LTC and DASH) or Nicehash, which is probably the most reliable source.


How the mining difficulty is calculated?

To calculate the difficulty you should just use a simple formula:


Difficulty = difficulty-1-target / current-target

In this, difficulty means hardness and target - 256 bits number.

difficulty-1-target can get different values. As usual, it’s hash, 32 first bits of which are equal to zero, another part consists of numbers and letters (what is also called pdiff or pool difficulty).

This formula seems to be pretty hard at first, so it might be better to use special resources, where you can find everything you’ll need, including formulas, calculations and graphs. For bitcoin these are: Bitcoinwisdom, Blockchain.com, Bitcoincity; Etherescan for Ethereum users and Coinwarz for different coins.

Experts say that you should use a few specialized mining calculators and take the average result, because this parameter changes very fast, so it can be very different after some time.


How the difficulty affects mining profit?

On the image you can see that from the year 2017 there was a huge ascend in bitcoin mining difficulty. It has only stopped in November 2018 when there was a failing market. At the same time, you might have seen falling in hashrate as well.


difficulty-jpg.1542


Such thing happens to other popular coins as well. At the same time, experts have recently calculated monthly price ascend of the most perspective altcoins as high 8%. The situation however, has changed a bit since that time, but if say that cryptocurrencies’ price gets 8% bigger each month, then mining rentability will be around 9 months, what is really good.

About the non loss point for bitcoin mining, in the end of 2018 analytics said that the first cryptocurrency price should be at least as high as $7000 (if you mine using Antminer S9 from Bitmain).

This way, when bitcoin price came down to the point of $4000, miners simply have to either buy even more unaffordable hardware or switch their attention to cryptocurrency mining with even lower hashrates. The first solution can be found very unprofitable, the second one considered to be pretty risky business. The optional strategy in this case is to keep balance in the very middle, what means mining cryptocurrencies with average hashrate level.

Some people being in such a bad situation often decide to turn their hardware off and try to live through the crisis, while others can even do something stranger with it, for example, use asic miner as a heater.
 
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