The Short Answer Is No
For this section, I will refrain from telling you anything but the facts:
If you started mining Bitcoin last year in January with the most profitable Bitcoin miner (Bitmain's S9) and continued for one full year, you would have experienced the following:
- On average, with Bitcoin's past and present hashrate in mind, you would have been able to mine 0.0053 Bitcoin per day. Numbers for this were gathered from What To Mine.
- If you multiply this average by 365 days, you get 1.97, which means you would have mined 1.97 Bitcoin in one year.
- The daily cost of a Bitcoin miner is $3.00 for electricity.
- The current cost of a Bitmain Bitcoin miner is a bit higher than it was before, so I will be generous and say that it would have costed you $2,000 for the S9 miner, the PSU, and the shipping cost back in January of 2017. If you add this with the cost of electricity, it would cost you $3,095 for the full year.
- I will also be generous and assume your miner never went down or required you to spend any additional costs on maintenance.
So, in total, it would have costed you $3,095 to mine 1.97 Bitcoin. That is an amazing profit.
Now, let's look at the other side: buying and holding. In January of 2017, the price of one Bitcoin was $1,017.
You could have bought a little over 3 Bitcoin for the price of what you paid to mine 1.97 Bitcoin. And, you wouldn't have had a noisy miner in your house.
Therefore, if you would have bought Bitcoin back in January of 2017, you would have made more in profit than if you would have purchased mining equipment and mined Bitcoin.
The Retort
Most will bring up the fact that you still have the miner, and you can continue to mine for the year of 2018. And, you're correct, so let's do the math:
- With Bitcoin's current hashrate, you can mine 0.00209 Bitcoin per day. This number decreases significantly every month. In fact, in May of 2017, this value was 0.00630 Bitcoin per day, more than three times what it is now. Even if we're generous, we can expect this value to halve by the end of 2018. If we consider that, we can assume you will make, on average, 0.001567 Bitcoin per day ((.00209/2 + .00209)/2).
- If we multiple this value by 365, we get a total of 0.572 Bitcoin.
- You also have to account for your electricity cost, which would come out to be $1,095.
So, for $1,095, you would have mined 0.572 Bitcoin throughout the year of 2018.
If we add both of those years together (2017 and 2018), you would have spent $4,190 to mine 2.542 Bitcoin. OR, you could have spent $3,095 to straight up buy 3 Bitcoin back in January of 2017, instead. By buying and holding Bitcoin, you could have made 0.478 more Bitcoin for $1,095 less.
Furthermore, if you add in the fact that companies are already working on new Bitcoin miners (using far superior technology -10nm and 7nm chips, for example), I'm not even certain you would get two full years of use out of a Bitcoin miner. So, based on past facts and numbers, I do feel that it is far more profitable to simply buy and hold Bitcoin.
Cloud Mining
Given the above information, you should know that using a cloud mining service is even less profitable. Though they attempt to entice you by stating that you can mine without the heartache that accompanies many Bitcoin mining companies, you simply can't make as much money as you can by buying and holding Bitcoin.
In fact, most mining companies don't care about your best interest in any way. They use fancy marketing to make it sound far more superior than it really is. And, if anyone wants to try and convince me otherwise, please look at the numbers. They don't lie.
I hope this helps some of you out when debating whether or not you want to start a Bitcoin mining project. If anyone has questions, or they need help with anything crypto-related, please let me know! If you're looking to invest in cryptocurrency, you can signup at Coinbase or Binance (both affiliate links). If you're against using affiliate links, I'm not offended in any way, and you can use the following two links: Coinbase and Binance. Both of these exchanges are my favorites, Coinbase for Bitcoin, Litecoin, and Ethereum, and Binance for several altcoins.
BCH Wallet - 15uhdzZvhHEEtZhtUCdSQZcJNahvC4ZnE2
ETH Wallet - 0x9962b39345388221478901D19A5657464F542445
LTC Wallet - LSURN6E6NHC3WxGduGM1wbLAbabKR9Veks