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> I wonder how profitable mining Bitcoin is these days at any scale. It boils down to a function of Capex and Opex. Today though it is a bit more complicated.
by latchkey 4y ago
> I wonder how profitable mining Bitcoin is these days at any scale.
It boils down to a function of Capex and Opex.
Today though it is a bit more complicated. Given that the bitcoin price goes in cycles, it is less about the current profitability and more about the ability to weather bear cycles. Miners now will hold as much as possible and then take profits when the prices go up again. Sometimes, they borrow against their existing holdings to buy more hardware.
During bear cycles it is far more risky to setup a new mining operation, especially when presented with the ability to just market buy BTC in large enough quantities to not affect price.
To answer your question though, it makes almost no sense to start a mining operation these days. You're competing with much larger players who have much deeper pockets. If you're doing just a small operation, the difficulty adjustments will hurt you more than a larger player who's lighting up thousands of machines at a time.
- lottin 4y agoImagine if copper miners held on to copper in the hope that it will go up in price. Taking a risk that is both unnecessary and unrelated to your business is stupid. That's the opposite of what a well-run business does.
- britneybitch 4y agoThat behavior is more common across industries than you might think. One example: https://markets.businessinsider.com/news/commodities/natural-gas-europe-lng-ships-wait-offshore-maximize-price-rise-2022-11 https://markets.businessinsider.com/news/commodities/natural...
- latchkey 4y agoCopper miners control production output [0], which defines the price. Bitcoin miners don't directly control production. They'd need to fork and get 51%+ to follow that fork. [0] https://seekingalpha.com/article/4546309-ivanhoe-mines-upside-potential-awaits-copper-next-rally https://seekingalpha.com/article/4546309-ivanhoe-mines-upsid...
- deleted 4y ago[deleted]
- fbdab103 4y agoYou mean like OPEC does on a fairly regular basis?
- nikanj 4y agoAt least bitcoins are absolutely useless, so a bitcoin shortage doesn’t affect anything