Bitcoin Mining No Longer Profitable
March 19, 2018
Recent estimations by the Elite Fixtures company say, mining Bitcoin is far more expensive than buying it in some countries. For instance mining a coin in South Korea will cost $26 170.
Fundstrat analysts have also claimed, mining Bitcoin does not make profits anymore.
“Bitcoin currently trades essentially at the break-even cost of mining a bitcoin”, the research center noted.
The Fundstrat’s model for calculating mining costs takes account of several factors, including cost of hardware, as mathematical problems are getting more complicated as time goes, as well as power and cooling.
According to Fundstrat, the current breakeven point for mining the currency makes $8 038.
As CNBC notes, miners have to handle both growing competition and bitcoin price drop as well as low transaction fees. While bitcoin supporters often mention little commissions as the currency’s advantage over traditional financial networks, average transaction would cost $34 late December, now it is less than 50 cents.
Is Bitcoin mining really doomed? Not likely. Its return depends much on power costs, and though the Fundstrat’s model uses average figure of 6 cents per kilowatt-hour, Chinese miners who make up a considerable share to the market have to pay only 4 cents or even less.