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Excuse me, I'm a crypto noob, but how much BTC could I make if I bought a dedicated mining rig for, say $2000 and let it run nonstop for two years? Would my inv

Excuse me, I'm a crypto noob, but how much BTC could I make if I bought a dedicated mining rig for, say $2000 and let it run nonstop for two years? Would my investment be worth it? Could I cash out my earnings to fiat and have more money than my initial investment or otherwise generate a profit?

deleted 4y ago
[deleted]
Marazan 4y ago
No.
speedgoose 4y ago
Do you produce your electricity? (solar panels, windmills, coal factory…) If not you have to guess the energy price in your area over the next two years. You also need to estimate the Bitcoin price over the next two years. And you probably need to estimate the bitcoin hash rate over the next two years. Good luck.
WJW 4y ago
It is entirely impossible to say. First off, your electricity price will determine how much (if any) profit you'd make. Most bitcoins mines are in areas with very low electricity prices for this very reasons and if you are not, it might be outright impossible to profitably run a mining rig. Obviously, the price of bitcoin over those two years would be very important to your income and assuming a price of 60k (where it was a few months ago) would result in a very different outcome than the same calculation with the current price of 30k. Bitcoin has been very volatile since basically forever, so it is very difficult to predict of your scheme would be profitable.
- nradov 4y ago
  This is why Bitcoin miners located in Kosovo where electricity is "free". They're supposed to pay, but due to the political situation the power company can't disconnect deadbeat customers. https://balkaninsight.com/2021/05/12/in-north-kosovo-mining-for-bitcoin-on-free-electricity/ https://balkaninsight.com/2021/05/12/in-north-kosovo-mining-...
  - danans 4y ago
    Even "better", the electricity in Kosovo is almost 100% lignite coal-based: https://bankwatch.org/beyond-fossil-fuels/the-energy-sector-in-kosovo https://bankwatch.org/beyond-fossil-fuels/the-energy-sector-...
- Canada 4y ago
  > First off, your electricity price will determine how much (if any) profit you'd make. No it wouldn't. The electricity cost is a factor, but it's not that significant compared to the capital cost of the equipment, the price of which fluctuates depending on the expected profit. You can also see this with GPUs, but it's far more pronounced with Bitcoin mining hardware which has no other use.
  - FabHK 4y ago
    Source? In fact, any breakdown of mining costs would be quite informative.
    - Canada 4y ago
      Source is doing it before, and being friends with people who have done it at scale. Just go ahead and try to do it. You will find that it's not possible to actually order stuff from bitmain when mining is profitable at their list prices. It's almost as if they just run the machines themselves when it's profitable, and deliver orders when that is more profitable than using them. So there is effectively a "spot" price for the machines where sellers who have inventory try to extract as much value as they can. Thus, the capital cost is more significant than electrical. (Obviously within reason, but paying 5 cents or 10 cents per kw/h is less relevant than capital cost) I should say though, after the 2018 crash S9s could be had in bulk for $100 each, where they were selling for over $3000 only months earlier. So maybe the flood of these out there makes my experience outdated.
_fat_santa 4y ago
This wholly depends on where you are getting energy and for how much. The "idea" around mining BTC is it's not free, you are exchanging Energy for BTC. If you live in Iceland where renewables are plentiful and cheap then you will likely make money, just about anywhere else though it's a gamble. TL;DR: Just dont.
agoose77 4y ago
Ultimately you can do what you want ^^, but it's worth considering the environmental impact of what you're proposing. Say a mining rig uses 1kW - for 2 years non-stop that's 1kW for 17520 hours. If CO2/kWh is 0.85lbs, then that's 14892 lbs, or 6.75 tonnes! The average passenger vehicle emits 4.6 tonnes of CO2 per year - that's less than our hypothetical rig! https://www.epa.gov/greenvehicles/greenhouse-gas-emissions-typical-passenger-vehicle https://www.epa.gov/greenvehicles/greenhouse-gas-emissions-t...
- ipaddr 4y ago
  This says nothing because electricity depending on the source can have none or more than your number.
  - Snowworm 4y ago
    Yup. Just build a nuclear reactor in your back garden and it's easy passive income!
    - louloulou 4y ago
      Or solar panels on the roof
- wyager 4y ago
  That's a lot of carbon you're helping remove from the ground and turn into plants!
- seaman1921 4y ago
  so as long as we are under average passenger vehicle its ok to do anything - great argument dude - justify an evil with a bigger evil
- UncleEntity 4y ago
  Other than those yahoos who recommissioned some coal-fired power plants not too long ago most mining operations are located in areas with surplus renewable energy methinks.
humanistbot 4y ago
Add your hardware and electric costs and calculate daily/weekly/monthly profit at: https://minerstat.com/mining-calculator https://minerstat.com/mining-calculator But unless you can find free electricity (like at work or school), it usually isn't worth it. You also have to factor in the failure rates at keeping a computer running 24/7 at max cycles.
- thombat 4y ago
  Stating the obvious, but if making money depends upon "free electricity" then it's an elaborate way to take money from whoever is paying that power bill.
  - matheusmoreira 4y ago
    Not always. In my country, they incentivize solar energy generation but don't actually pay us any money for it. They give us "kWH credits" that expire within one year if not consumed. So it's much better to dump all that surplus energy into a miner so it can be converted into actual money. If the power company doesn't like it, they can pay me real cash instead of bullshit credits.
    - thombat 4y ago
      I guess if the network/power company can't/won't accept surplus power then it hugely devalues the financial case for domestic solar, since if your summertime production doesn't much exceed consumption then you have a big shortfall in the rest of the year. Here (Germany) there are limits on what the network will accept so people play elaborate games of trading off battery charging vs selling across the day, with one eye on the weather forecast. But in your case you're probably not so much making money from the "free electricity" as reducing the potential loss on the cost of installing and maintaining the system?
      - matheusmoreira 4y ago
        > network/power company can't/won't accept surplus power Oh, they'll happily accept the power I'm generating... They just won't pay me for it. > your summertime production doesn't much exceed consumption then you have a big shortfall in the rest of the year Indeed, that's the case with most homes who invested into solar power. Most of them are planned precisely so they'll generate just enough energy to cover their yearly comsumption. Mine is set up to generate as much energy as possible. I just installed as many panels as possible. > Here (Germany) there are limits on what the network will accept so people play elaborate games of trading off battery charging vs selling across the day, with one eye on the weather forecast. That's interesting, I didn't know that. Everything I've read about the german solar power system made me think it was perfect: you could just generate as much power as you wanted and get paid for it. I had no idea people had to play those games. Why can't the network accept the power? > But in your case you're probably not so much making money from the "free electricity" as reducing the potential loss on the cost of installing and maintaining the system? In my case the equipment has already more than paid for itself. I generate more power than I consume almost all year long and my energy bill is almost zero. Maintenance costs have been minimal so far. When I generate more power than I consume, they give me expiring kWh credits. I don't want these credits to accumulate under any circumstances since I'm already generating surplus at almost all times. So it's in my interest to increase my energy consumption: anything else means giving them energy for free. So I set up a miner.
mistrial9 4y ago
uhh - this is exactly "not systems thinking" .. it is an individual opportunistic thinking. Responses below link to broad societal effects, various environmental claims, appeals to morality and reason.. all of which intersect very little with the "I see food" diet implied by this question. As an analogy, the sticky part of lottery tickets is, people will reliably participate with their own money; others complain; nothing changes as people do it again anyway. Opportunistic planners take advantage of the "I see food" people, make glossy lottery tickets and pay a premium to food store managers to sell those lottery tickets; more people complain. Can we identify the systems parts in play here, to create enough context to actually decide what is important, what is unstoppable, and what might be a rational, thinking response to all of this going on ?
- cowtools 4y ago
  Good points, but I think that if you want to consider the "ethics" of cryptocurrency mining, you have to acknowledge that currently there is a lot of hype around crypto that will eventually go away. There are a lot of irrational actors. If you want to make a statement about the nature of bitcoin, I would consider an "equilibrium" situation where: * The cost of specialized hardware is stable (e.g. what are the economies of scale as t->infinity ?) * The price of bitcoin in terms of energy (BTC/watt hr) is stable * Miners are rational actors It seems to me like the most concerning aspect of cryptocurrency mining is that the hashrate is dependent on externalities like the price of bitcoin, rather than the necessary hashrate to defeat a 51% attack.
  - catlifeonmars 4y ago
    > currently there is a lot of hype around crypto that will eventually go away. What is the mechanism that will make this happen?
wussboy 4y ago
Based on the replies you got, it seems pretty clear that the answer to all three of your questions is “no”.
ntoskrnl 4y ago
Any company that could build hardware capable of turning a profit would use it themselves, instead of selling it to the public. Don't try to buy a money printer. Life isn't that easy.
- redox99 4y ago
  People have been saying this literally since the first ASIC came out. And guess what. People have made a lot of money buying these money printers.
- jabits 4y ago
  Not so sure, what about a machine like a slot machine? I think you make money making something you know how to make
- vikingerik 4y ago
  There is arbitrage. It's possible that a hardware company might be located where electricity is expensive, or in an unfavorable regulatory or tax jurisdiction, such that they wouldn't directly profit from running the mining equipment, but someone in a better environment could. But yeah, this would be a small minority of situations.
- amelius 4y ago
  Solar panels are money printers. Yet no company is offering to put them on my roof at their cost.
  - catlifeonmars 4y ago
    Why not?
  - betamaxthetape 4y ago
    This used to be the case in the UK. There were a few companies that would install solar panels on your roof, at no cost to you. You could use the electricity generated by the panels at no cost. The catch was that the companies took the feed-in tariff (the government subsidy for generating renewable electricity), and that you needed to commit to having the panels on your house for a minimum number of years (making it unviable if you rented, or planned to move in a few years). In the mid-2010s the UK changed how the subsidies worked, changing from the feed-in scheme where you were paid per unit of electricity generated (regardless of if you consumed that energy or sent it back to the electricity grid) to the Smart Export Guarantee, where you are only paid for the electricity that you sent back to the grid. According to Wikipedia [0] this caused many of the companies operating the "free solar panels" schemes to go out of business. [0] https://en.wikipedia.org/wiki/Feed-in_tariffs_in_the_United_Kingdom#Free_electricity_schemes https://en.wikipedia.org/wiki/Feed-in_tariffs_in_the_United_...
andy81 4y ago
You'd be competing against others who steal their electricity or have it subsidised (including pollution, resource depletion, regulatory arbitrage, financial crime and other externalities). If you can take advantage of some of those and don't mind that the money isn't being generated so much as taken from other people then it's a great idea.
mirceal 4y ago
there are multiple variables here. one is the cost of the hardware. 2000$ is not enough for latest generation ASIC miners. It just isn't. You want the latest generation ones. We are probably talking 10k+ for something decent. The second one is the cost of power. People like to talk shit about the environmental impact of bitcoin and stuff, but the reality is that the bitcoin you mine is worth less than the power you are using in most places around the world. Bitcoin mining is profitable in areas where the cost of power is heavily subsidized (it's free real estate meme) or you can easily generate power yourself (solar, wind, thermal, etc). So, if the cost of power is > value of mined bitcoin, it does not make sense to mine it The third part is mining pools. You can build all the rigs you want, but the reality is that most bitcoin is mined by mining pools. So you will have to join one of those pools if you want to have a steady guaranteed small income. So to answer your question: depending where you are for an investment of X this could be profitable (medium/long term) but you need to understand more about the cost of the hardware, cost of power and dynamic of mining pools to actually pull this off (so for a noob, you're better off just buying 2000$ of BTC, holding for 2 years and selling. sorry noob. The wild west era of bitcoin mining is long behind us)
scotty79 4y ago
If you don't have a super cheap source of electricity then most likely you wouldn't break even.

deleted 4y ago

[deleted]

Marazan 4y ago

No.

speedgoose 4y ago

Do you produce your electricity? (solar panels, windmills, coal factory…) If not you have to guess the energy price in your area over the next two years. You also need to estimate the Bitcoin price over the next two years. And you probably need to estimate the bitcoin hash rate over the next two years. Good luck.

WJW 4y ago

It is entirely impossible to say. First off, your electricity price will determine how much (if any) profit you'd make. Most bitcoins mines are in areas with very low electricity prices for this very reasons and if you are not, it might be outright impossible to profitably run a mining rig. Obviously, the price of bitcoin over those two years would be very important to your income and assuming a price of 60k (where it was a few months ago) would result in a very different outcome than the same calculation with the current price of 30k. Bitcoin has been very volatile since basically forever, so it is very difficult to predict of your scheme would be profitable.

nradov 4y ago
This is why Bitcoin miners located in Kosovo where electricity is "free". They're supposed to pay, but due to the political situation the power company can't disconnect deadbeat customers. https://balkaninsight.com/2021/05/12/in-north-kosovo-mining-for-bitcoin-on-free-electricity/ https://balkaninsight.com/2021/05/12/in-north-kosovo-mining-...
- danans 4y ago
  Even "better", the electricity in Kosovo is almost 100% lignite coal-based: https://bankwatch.org/beyond-fossil-fuels/the-energy-sector-in-kosovo https://bankwatch.org/beyond-fossil-fuels/the-energy-sector-...
Canada 4y ago
> First off, your electricity price will determine how much (if any) profit you'd make. No it wouldn't. The electricity cost is a factor, but it's not that significant compared to the capital cost of the equipment, the price of which fluctuates depending on the expected profit. You can also see this with GPUs, but it's far more pronounced with Bitcoin mining hardware which has no other use.
- FabHK 4y ago
  Source? In fact, any breakdown of mining costs would be quite informative.
  - Canada 4y ago
    Source is doing it before, and being friends with people who have done it at scale. Just go ahead and try to do it. You will find that it's not possible to actually order stuff from bitmain when mining is profitable at their list prices. It's almost as if they just run the machines themselves when it's profitable, and deliver orders when that is more profitable than using them. So there is effectively a "spot" price for the machines where sellers who have inventory try to extract as much value as they can. Thus, the capital cost is more significant than electrical. (Obviously within reason, but paying 5 cents or 10 cents per kw/h is less relevant than capital cost) I should say though, after the 2018 crash S9s could be had in bulk for $100 each, where they were selling for over $3000 only months earlier. So maybe the flood of these out there makes my experience outdated.

_fat_santa 4y ago

This wholly depends on where you are getting energy and for how much. The "idea" around mining BTC is it's not free, you are exchanging Energy for BTC. If you live in Iceland where renewables are plentiful and cheap then you will likely make money, just about anywhere else though it's a gamble. TL;DR: Just dont.

agoose77 4y ago

Ultimately you can do what you want ^^, but it's worth considering the environmental impact of what you're proposing. Say a mining rig uses 1kW - for 2 years non-stop that's 1kW for 17520 hours. If CO2/kWh is 0.85lbs, then that's 14892 lbs, or 6.75 tonnes! The average passenger vehicle emits 4.6 tonnes of CO2 per year - that's less than our hypothetical rig! https://www.epa.gov/greenvehicles/greenhouse-gas-emissions-typical-passenger-vehicle https://www.epa.gov/greenvehicles/greenhouse-gas-emissions-t...

ipaddr 4y ago
This says nothing because electricity depending on the source can have none or more than your number.
- Snowworm 4y ago
  Yup. Just build a nuclear reactor in your back garden and it's easy passive income!
  - louloulou 4y ago
    Or solar panels on the roof
wyager 4y ago
That's a lot of carbon you're helping remove from the ground and turn into plants!
seaman1921 4y ago
so as long as we are under average passenger vehicle its ok to do anything - great argument dude - justify an evil with a bigger evil
UncleEntity 4y ago
Other than those yahoos who recommissioned some coal-fired power plants not too long ago most mining operations are located in areas with surplus renewable energy methinks.

humanistbot 4y ago

Add your hardware and electric costs and calculate daily/weekly/monthly profit at: https://minerstat.com/mining-calculator https://minerstat.com/mining-calculator But unless you can find free electricity (like at work or school), it usually isn't worth it. You also have to factor in the failure rates at keeping a computer running 24/7 at max cycles.

thombat 4y ago
Stating the obvious, but if making money depends upon "free electricity" then it's an elaborate way to take money from whoever is paying that power bill.
- matheusmoreira 4y ago
  Not always. In my country, they incentivize solar energy generation but don't actually pay us any money for it. They give us "kWH credits" that expire within one year if not consumed. So it's much better to dump all that surplus energy into a miner so it can be converted into actual money. If the power company doesn't like it, they can pay me real cash instead of bullshit credits.
  - thombat 4y ago
    I guess if the network/power company can't/won't accept surplus power then it hugely devalues the financial case for domestic solar, since if your summertime production doesn't much exceed consumption then you have a big shortfall in the rest of the year. Here (Germany) there are limits on what the network will accept so people play elaborate games of trading off battery charging vs selling across the day, with one eye on the weather forecast. But in your case you're probably not so much making money from the "free electricity" as reducing the potential loss on the cost of installing and maintaining the system?
    - matheusmoreira 4y ago
      > network/power company can't/won't accept surplus power Oh, they'll happily accept the power I'm generating... They just won't pay me for it. > your summertime production doesn't much exceed consumption then you have a big shortfall in the rest of the year Indeed, that's the case with most homes who invested into solar power. Most of them are planned precisely so they'll generate just enough energy to cover their yearly comsumption. Mine is set up to generate as much energy as possible. I just installed as many panels as possible. > Here (Germany) there are limits on what the network will accept so people play elaborate games of trading off battery charging vs selling across the day, with one eye on the weather forecast. That's interesting, I didn't know that. Everything I've read about the german solar power system made me think it was perfect: you could just generate as much power as you wanted and get paid for it. I had no idea people had to play those games. Why can't the network accept the power? > But in your case you're probably not so much making money from the "free electricity" as reducing the potential loss on the cost of installing and maintaining the system? In my case the equipment has already more than paid for itself. I generate more power than I consume almost all year long and my energy bill is almost zero. Maintenance costs have been minimal so far. When I generate more power than I consume, they give me expiring kWh credits. I don't want these credits to accumulate under any circumstances since I'm already generating surplus at almost all times. So it's in my interest to increase my energy consumption: anything else means giving them energy for free. So I set up a miner.

mistrial9 4y ago

uhh - this is exactly "not systems thinking" .. it is an individual opportunistic thinking. Responses below link to broad societal effects, various environmental claims, appeals to morality and reason.. all of which intersect very little with the "I see food" diet implied by this question. As an analogy, the sticky part of lottery tickets is, people will reliably participate with their own money; others complain; nothing changes as people do it again anyway. Opportunistic planners take advantage of the "I see food" people, make glossy lottery tickets and pay a premium to food store managers to sell those lottery tickets; more people complain. Can we identify the systems parts in play here, to create enough context to actually decide what is important, what is unstoppable, and what might be a rational, thinking response to all of this going on ?

cowtools 4y ago
Good points, but I think that if you want to consider the "ethics" of cryptocurrency mining, you have to acknowledge that currently there is a lot of hype around crypto that will eventually go away. There are a lot of irrational actors. If you want to make a statement about the nature of bitcoin, I would consider an "equilibrium" situation where: * The cost of specialized hardware is stable (e.g. what are the economies of scale as t->infinity ?) * The price of bitcoin in terms of energy (BTC/watt hr) is stable * Miners are rational actors It seems to me like the most concerning aspect of cryptocurrency mining is that the hashrate is dependent on externalities like the price of bitcoin, rather than the necessary hashrate to defeat a 51% attack.
- catlifeonmars 4y ago
  > currently there is a lot of hype around crypto that will eventually go away. What is the mechanism that will make this happen?

wussboy 4y ago

Based on the replies you got, it seems pretty clear that the answer to all three of your questions is “no”.

ntoskrnl 4y ago

Any company that could build hardware capable of turning a profit would use it themselves, instead of selling it to the public. Don't try to buy a money printer. Life isn't that easy.

redox99 4y ago
People have been saying this literally since the first ASIC came out. And guess what. People have made a lot of money buying these money printers.
jabits 4y ago
Not so sure, what about a machine like a slot machine? I think you make money making something you know how to make
vikingerik 4y ago
There is arbitrage. It's possible that a hardware company might be located where electricity is expensive, or in an unfavorable regulatory or tax jurisdiction, such that they wouldn't directly profit from running the mining equipment, but someone in a better environment could. But yeah, this would be a small minority of situations.
amelius 4y ago
Solar panels are money printers. Yet no company is offering to put them on my roof at their cost.
- catlifeonmars 4y ago
  Why not?
- betamaxthetape 4y ago
  This used to be the case in the UK. There were a few companies that would install solar panels on your roof, at no cost to you. You could use the electricity generated by the panels at no cost. The catch was that the companies took the feed-in tariff (the government subsidy for generating renewable electricity), and that you needed to commit to having the panels on your house for a minimum number of years (making it unviable if you rented, or planned to move in a few years). In the mid-2010s the UK changed how the subsidies worked, changing from the feed-in scheme where you were paid per unit of electricity generated (regardless of if you consumed that energy or sent it back to the electricity grid) to the Smart Export Guarantee, where you are only paid for the electricity that you sent back to the grid. According to Wikipedia [0] this caused many of the companies operating the "free solar panels" schemes to go out of business. [0] https://en.wikipedia.org/wiki/Feed-in_tariffs_in_the_United_Kingdom#Free_electricity_schemes https://en.wikipedia.org/wiki/Feed-in_tariffs_in_the_United_...

andy81 4y ago

You'd be competing against others who steal their electricity or have it subsidised (including pollution, resource depletion, regulatory arbitrage, financial crime and other externalities). If you can take advantage of some of those and don't mind that the money isn't being generated so much as taken from other people then it's a great idea.

mirceal 4y ago

there are multiple variables here. one is the cost of the hardware. 2000$ is not enough for latest generation ASIC miners. It just isn't. You want the latest generation ones. We are probably talking 10k+ for something decent. The second one is the cost of power. People like to talk shit about the environmental impact of bitcoin and stuff, but the reality is that the bitcoin you mine is worth less than the power you are using in most places around the world. Bitcoin mining is profitable in areas where the cost of power is heavily subsidized (it's free real estate meme) or you can easily generate power yourself (solar, wind, thermal, etc). So, if the cost of power is > value of mined bitcoin, it does not make sense to mine it The third part is mining pools. You can build all the rigs you want, but the reality is that most bitcoin is mined by mining pools. So you will have to join one of those pools if you want to have a steady guaranteed small income. So to answer your question: depending where you are for an investment of X this could be profitable (medium/long term) but you need to understand more about the cost of the hardware, cost of power and dynamic of mining pools to actually pull this off (so for a noob, you're better off just buying 2000$ of BTC, holding for 2 years and selling. sorry noob. The wild west era of bitcoin mining is long behind us)

scotty79 4y ago

If you don't have a super cheap source of electricity then most likely you wouldn't break even.