Cryptofarm

A cost estimate analysis to deploy and maintain a Bitcoin mining farm/rig.
Explore the code »

Report Bug · Request Feature

Table of contents

About the project


Image Source - Holypix!

With recent changes in technology and the creation of professional mining centers with enormous computing power, as well as the shifting price of Bitcoin itself, there is a question crypto enthusiasts/miners are asking themselves, is Bitcoin mining still profitable?

As the demand for cryptocurrency* on the rise, many organizations and individuals are looking for ways to own/adopt digital currency. Investing in cryptocurrencies can prove to be risky but it is also potentially lucrative. Rather than investing in cryptocurrencies, the other alternative is to “mine” these digital currencies.

From a miner’s perspective, mining a new block of Bitcoin rewards the successful miner 6.25 BTC at the current rate, allowing the miner to profit from that return. Even so, the more hardware and resources a miner has to devote to this task, the more likely they are to receive that reward, incentivizing miners to invest into their operations to make it a likely outcome.

Mining today takes on two forms:

  1. Solo mining: High reward with a higher variance (longer time between payments).
  2. Pooled mining: Rewards in correlation to the amount of hashing power they each miner contributed, and receive small payments with a lower variance (shorter time between payments).

However, the probability to mine a block of BTC solo is very low, and can be termed as an investment gamble. The latter way is to contribute to the BTC mining pool, which are networks of distributed Bitcoin miners who cooperate to mine blocks together and distribute the payments based on each miner’s contribution to the pool. This allows miners to smooth out their revenue at a slight discount in the form of fees paid to the pool coordinator. Ultimately, it depends on the computational power of the miner to be able to mine fractions of BTC.

Therefore, the primary motivation of this project is to understand if investing mining hardware can be pursued in near future and determine potential profits and risks associated in pursuing such an investment.

Assumptions

  1. The Life Cycle of the project is defined as the period to mine 1 Bitcoin
  2. Life Cycle of Operations is 4-5 years.
  3. Lifetime of one Miner - 5 years.
  4. Estimate will not account for Inflation & Depreciation.
  5. Amount of Bitcoin generated will not be liquidated until 1 Bitcoin.
  6. The uptime of the system will be at least 80% in a day - avoid overclocking and prevent damage.
  7. One ASIC Antminer unit deployed - different Hashrates for understanding purposes.
  8. Cost to mine 1 BTC is less than cost to buy 1 BTC.
  9. Price of Bitcoin will inevitably increase.
  10. Electricity cost assumed to be fixed within a range.
  11. Network Difficulty increases at a constant rate.
  12. Estimate shall not account for political factors that may influence the value of Bitcoin.

Project Scope