Bitcoin gold mining profitability

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WATCH RELATED VIDEO: Bitcoin Gold (BTG) Mining Profitability

Bitcoin mining profit is shrinking with prices in dumps and difficulty on the rise

In the ongoing discussion about Bitcoin price volatility , one theory for a rapidly falling Bitcoin price is the fact that so many coins are mined every day.

Currently, Bitcoin miners produce coins daily. These miners must pay bills, such as rent and electricity, which cannot presently be paid for with Bitcoin. Therefore, large portions of Bitcoin mining profit must be converted to fiat in order to pay expenses and keep Bitcoin mining operations afloat. This constant selling creates a baseline of downward pressure on the Bitcoin price; in order for the price to remain stable, demand for Bitcoin must match the constant selling pressure.

In order for the Bitcoin price to move upwards, demand must exceed the selling pressure. Thus, when we see temporary spikes in demand for Bitcoin, the price shoots upwards , which encourages speculative buying, thereby pushing the price even higher.

When that spike in demand subsides, however, the Bitcoin price will not simply level out at a new high. Thousands of coins are still being sold every day, so selling pressure will very quickly catch up to demand — which has now become static — and will surpass the newly established level. The Bitcoin price will begin to fall , and those speculative buyers will cash out, making the price fall even further, until the next spike in demand arrives. And there we have our extremely volatile Bitcoin price.

Of course, other factors, such as merchant selling pressure and dark net market activity , contribute to that baseline of downward pressure. Bitcoin price volatility, then, is likely a very simple case of supply and demand — more coins are being created and not enough people want them.

Can this problem be fixed? If it can be fixed, is the solution to be found in the demand-side or the supply-side? I believe that the issue lies in the supply-side, and I will explain why below.

However, I do not have a solution, and I will not attempt to come up with one. This article is not meant to offer a way to fix price volatility, it is only meant to make an attempt at explaining the supply-side issues at play with price volatility.

At this point, it is common knowledge that Bitcoin was designed to work a lot like gold. In fact, a large part of what makes Bitcoin great is the fact that Bitcoin mining parallels gold mining in a few respects. Like gold, Bitcoin is scarce, and requires substantial amounts of resources for production, or mining.

Bitcoin miners must use up electricity, Bitcoin mining hardware, and physical space, which often requires miners to pay rent. These expenses ensure that Bitcoin is only mined if it is valued highly enough; if the utility received from newly mined coins is lower than the utility foregone in paying the expenses to mine coins, then there would be no Bitcoin mining.

Furthermore, as Bitcoin mining progresses, the difficulty involved in producing new blocks increases. This feature, combined with an unavoidable economic characteristic of the currency, constitutes the supply-side problem present in Bitcoin price volatility.

While Bitcoin mining does require increasing amounts of resources as the hash rate grows, those costs are not rigid.

When the purchasing power of Bitcoin falls, miners do indeed cut back on mining — if the price falls low enough, miners will turn off their rigs altogether. But mining does not simply cease until demand makes it profitable again, as is the case with gold mining.

Instead, the Bitcoin protocol has a mechanism that ensures coins are always produced. When Bitcoin mining becomes unprofitable, and the hash rate consequently declines, the mining difficulty is automatically diminished. Thus, as the Bitcoin price falls, mining becomes less expensive. Therefore, in the short run, supply is constantly increasing, regardless of how low demand falls.

Gold, on the other hand, has no such mechanism that retargets mining difficulty, nature does not allow for such a thing to take place. As more and more gold gets extracted from the earth, the remaining stock is deeper underground, behind thicker rocks, in smaller amounts. As gold is continuously mined, the difficulty increases, and it never gets any easier, no matter what. So if the demand for gold declines, the rate of increase in supply declines as well.

Additionally, the demand for gold has two components, whereas Bitcoin only has one. Gold assuming it is used as currency has both monetary demand and industrial demand. That is, gold is used both as a currency and as a factor of production. Thus, if monetary demand falls, and industrial demand rises or stays constant, the monetary gold supply actually decreases! So, with gold, there is no constant downward pressure on purchasing power.

Since there is no industrial use for Bitcoin, and fluctuating mining difficulty ensures a constant rate of supply increase, the Bitcoin supply will grow regardless of its demand. The initial reaction for many people who encounter this problem may be the thought that the solution is very simple. All that needs to be done is to implement a change in the protocol so that Bitcoin mining difficulty does not retarget as the hash rate declines.

Unfortunately, I do not think the Bitcoin mining conundrum is so simple. It is actually very important for mining difficulty to adjust alongside the hash rate. Bitcoin miners provide a crucial service to the network, they produce new blocks, which allows new transactions to take place, they confirm those new transactions, and they broadcast them to the blockchain.

Therefore, it is essential that there always be a distributed network of miners, to prevent one person or group from gaining control of the network, and to ensure that transactions will go through. Without Bitcoin miners, there is no Bitcoin. Of course, the problem presented here is not a make-or-break issue.

It is highly unlikely that Bitcoin price volatility has an effect on long-term demand. Worst-case scenario, volatility pushes unlucky speculators away, but in no way deters those adopting Bitcoin based on its merits as a monetary technology. Do you have any solutions to the problem presented in this article? Or is it even a problem at all?

Let us know in the comments below! Evan is the Senior Editor of Bitcoinist. He has a bachelor's degree in History with minors in Economics and Political Science. When he's not acting like he knows what he's doing in the newsroom, Evan is most likely playing video games. Follow Evan on Twitter EvanFaggart.

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These 14- and 9-year-old siblings earn over $30,000 a month mining cryptocurrency

G rowing up in rural western Pennsylvania in the early s, Bill Spence played with his pals on piles of coal waste, oblivious to the toxic heavy metals right under his feet. The present worry is that these unlined pits are leaching deadly carcinogens into the groundwater—or, worse, that they will catch fire and start polluting the air, too. Of the gob piles in Pennsylvania, 38 are smoldering. So Spence, now 63, set out on a mission to whittle down the piles, restore the land—and make money doing it. In , he bought control of the Scrubgrass Generating power plant in Venango County, north of Pittsburgh, which was specially designed to combust gob. Later that year, after being diagnosed with pancreatic failure and kidney cancer which he speculates may have been linked to his early gob exposure , he stepped back from the business. Bored, he started dabbling in cryptocurrencies and soon had a eureka moment: He could make the Scrubgrass numbers work by turning gob into bitcoin.

The most profitable Bitcoin GOLD mining pool for GPU and ASIC. Regular payments, tutorials, reliable servers, rig monitoring bot.

Bitcoin Gold (BTG) Mining Profitability Calculator

The profitability of mining bitcoin has been slipping since November after a very profitable few months, Arcane Research said Wednesday in its monthly report. The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group , which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights , which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG. Eliza Gkritsi. Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia. By signing up, you will receive emails about CoinDesk product updates, events and marketing and you agree to our terms of services and privacy policy. But between Nov.

Setting up a mining rig for Bitcoin Gold: wallet, pool, bat files

bitcoin gold mining profitability

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Lucky Solo Ethereum Miner Bags $540,000 as Reward After Mining Entire Block

Also, take a look at our Support Center if you need help or run into any issue. Happy Mining. Mining is the production of cryptocurrency through computations. The provider circulates TONcoin coins for the answer for every issue. You can withdraw mined money every day.

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Ethereum mining has emerged as a great way for individuals with powerful graphics cards GPUs to make some money while they aren't using their PC. With congestion on the Ethereum network driving up gas fees, mining profitability has been fairly decent for solo miners although the average profitability has seen a dip. The mining difficulty of Ethereum is not as high compared to Bitcoin , but it is still a difficult, energy-consuming, and computationally intensive process that may discourage an average person. Even so, a lot of solo miners continue to thrive in the Ethereum ecosystem and continue to draw profits from their mining activities. However, very rarely does one hear about a miner mining a single block that delivers a reward with Ether worth a fortune. As per a report by BeInCrypto , this solo Ethereum miner had found a block and then proceeded to mine it independently got a total of ETH

The main point here is that bitcoin mining remains profitable even in the current volatile pricing environment with most companies reporting.

Gold and bitcoin: Tax implications of physical and virtual mining

To be able to maximize your profit you should use up-to-date hardware and software and follow our easy to follow BTG mining guide. You can also use the cloud mining option. Check more information about that in our cloud mining section later in this article. These light changes to the algorithm make it resistant to attacks, profitable and safe to mine.

Bitcoin Gold Mining Calculator

RELATED VIDEO: The Most PROFITABLE Crypto Miner You Can Buy! ($900/month)

If you are curious to see how profitable mining the Bitcoin Gold cryptocurrency can be for you, check out our mining calculator. If you are unsure of your electricity costs, you can find this on an electricity bill from your power company or look online for averages in your local area. If you are using your own mining rig at home, enter the hardware costs you incurred to build or buy your rig. If you are using a cloud mining service, enter the cost of the mining contract.

On top of that, the platform offers as a sign-up bonus.

Bitcoin Gold Mining: If You Hate ASICs, It's For You

Clear linking rules are abided to meet reference reputability standards. Only authoritative sources like academic associations or journals are used for research references while creating the content. If there's a disagreement of interest behind a referenced study, the reader must always be informed. Getting into cryptocurrency mining can be hard. There's a lot of hardware to buy, things to learn, factors to consider. While the same can be true for Bitcoin Gold, the developers aim to make it easier.

Bitcoin Gold Mining Calculator & Profitability Calculator

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  1. Hyde

    Now all became clear, many thanks for the information. You have very much helped me.