In the months after the 2024 halving, ASIC bitcoin miners experienced historic low margins. the popular S19j Pro became unprofitable when mining with an electricity cost of $0.06 kWh or more. Whether mining bitcoin using ASICs or mining other crypto currencies with GPU’s, with the right equipment and/or electricity rate mining is still profitable. Let’s break down the key elements that impact your profitability, and see if Bitcoin mining is still a viable option today and how it compares to Bitcoin mining.

At $0.075/kWh the Popular Bitmain S19j Pro is mining at a significant loss (source: Lincoin Lens)

To assess whether mining is a viable option for you, it’s crucial to evaluate profitability. Profitability is influenced by both revenue and costs. In mining, revenue is affected by several key factors: the price of the coin, the network’s hashrate, block rewards (which include both the block subsidy and transaction fees), and the efficiency of your mining equipment.

Costs can be divided into two categories. The first is the initial investment, or capital expenditure (CapEx). If you are using hosting services, this typically includes the cost of the ASIC miner along with any additional expenses like shipping and setup fees. The second category is operational expenses (OpEx), which encompass ongoing costs such as electricity, maintenance, repairs, and security. For those utilizing hosting services, these operational costs are often bundled into a single hosting service fee.

In essence, profitability is determined by subtracting costs from revenue. However, in the world of crypto mining, this calculation is not straightforward due to factors beyond miners’ control, such as the price of coins and block rewards. Let’s delve into the calculations and see if mining is still profitable.

Calculating Profitability in Crypto Mining

Profitability in crypto mining involves comparing your revenue with your expenses. Here’s how to calculate the revenue and expenses:

Calculate Revenue
Determine how much crypto you expect to mine over a given period. This depends on the algorithm you mine, the mining hardware’s hashrate, the network’s total hashrate, and in the case of Bitcoin, the network difficulty. Estimate the revenue by multiplying the amount of Bitcoin mined by the current or projected Bitcoin price.

The hash rate measures the processing power of your mining equipment, expressed in hashes per second (H/s). Depending on your equipment, it can range from kilo hashes per second (KH/s) to exa hashes per second (EH/s).

Originally, GPUs were introduced to tackle the growing complexity of crypto mining. The first instance of Bitcoin mining with a GPU occurred in October 2010, leveraging the parallel processing capabilities of GPUs to solve cryptographic puzzles faster and more efficiently. The main advantage of GPUs lies in their ability to handle multiple operations simultaneously, and miners can even use multi-GPU rigs to increase performance. Modern GPUs can deliver up to 2,000 times the hashing power of a 20-kilohash CPU miner. However, as mining competition in Bitcoin has grown, GPU miners are not able to compete with ASIC Bitcoin miners. ASIC stands for Application-Specific Integrated Circuit, meaning that the device is built with a single purpose: to solve Bitcoin’s Proof of Work (PoW) algorithm, known as SHA-256, as efficiently as possible. An ASIC miner is a specialized piece of hardware designed specifically for mining Bitcoin.

A simplified way to calculate revenue for Bitcoin is to use an indicator called hashprice. Hashprice shows how much a miner can expect to earn in USD ($) per Petahash (PH/s) of computing power per day. This is a function of network difficulty, block subsidy, transaction fees, and Bitcoin price. Hashprice is measured in $/PH/Day.

Calculate Expenses

The operational expenditure will depend on the type of mining business you run. If your mining hardware is running at a hosting facility, the OpEx can be as straightforward as the hosting fee and repair costs.

When you operate your own data center infrastructure, the expenses consist of different types:

Operating Expenses (OpEx): day-to-day costs of running a business (e.g., rent, energy bills, salaries, office supplies).
Non-operating Expenses: Costs not related to core business operations (e.g., interest expenses, losses on asset sales).
Depreciation and amortization: Allocation of the cost of tangible and intangible assets over their useful lives.
Power consumption, the electricity each mining rig uses, has the biggest impact on operational expenses. If a rate is not fixed, profitability can vary due to fluctuating energy prices. Measured in watts (W), power consumption is a key factor in determining the efficiency of a mining setup. While the power usage for a single miner might seem negligible, it quickly adds up with tens or hundreds of units running simultaneously. More miners lead to higher hashing power and a better chance of mining more Bitcoin. However, this poses a challenge for GPUs. Although GPUs generally have lower power requirements than ASICs, achieving competitive computing power requires deploying many units, which can result in even higher energy consumption overall.

Electricity costs are a critical factor for miners, as mining is energy-intensive and power bills often represent the largest expense. The cost per kilowatt-hour (kWh) directly impacts profitability, which is why many Bitcoin mining colocation services use power rates as their primary pricing model. Although GPU miners typically consume less power than ASIC miners, the need to run more GPUs—and the associated cooling systems—drives up energy costs, reducing the overall efficiency and profitability of GPU-based setups.