What variables should be taken into account to know if it is worth buying/plugging in an Antminer to mine bitcoin?
Solo Bitcoin Mining
Mining at home can be a good idea. Or not… It will depend on a few key variables such as the price of BTC, the hashrate (difficulty of mining), the price of electricity, the efficiency and the price of your Antminer, among others.
Calculating the impact of all these parameters on your margins is crucial to know if it is better to disconnect your ASICs and buy BTC directly.
The solo miner connected to the national grid cannot have the same margins as the professional miners who generally find places where electricity is very inexpensive.
For example, miner TeraWulf shows a gross margin of 310% spending $0.032 per kWh, or $7,048 per bitcoin. For comparison, the French individual pays for his electricity between 0.16 € and 0.22 €. That is to say between 5 to 7 times more expensive.
Mining in France is therefore not really worth it, unless you can connect to a small isolated hydropower plant.
A new miner should ask themselves the following question before buying their machine: “How low can the price go and how high can the hashrate go before they have to unplug?” »
The key variables
The society brains offers a very practical tool to know its margin. All you have to do is fill in the important parameters to know what it costs you to mine one BTC at the moment T.
The parameters are:
- BTC price
- Hashrate
- Mining Difficulty
[La difficulté de mining est une unité mesurant la difficulté de trouver un hash valide. Elle est directement proportionnelle au hashrate. Il est 48 710 milliards de fois plus dur de miner un bloc aujourd’hui que le bloc genesis. +20 % tous les mois…]
- Price paid for your Antminer
- Wattage consumption of your Antminer
[La consommation sera différente que celle des paramètres d’usine si vous réglez plus finement le hashrate de votre Antminer grâce au logiciel de Braiins. À ce titre, ne manquez pas notre article Régler son Antminer aux petits oignons.]
- Price per kWh of electricity
- Reward per block
- Time left before the next halving
- Average transaction fees
- Miscellaneous costs & Downtime
[Ces frais peuvent être la location du logiciel Braiins et les frais du pool qui sont généralement un pourcentage des BTC minés. Vous pouvez également renseigner les frais d’hébergement des ASIC le cas échéant. Le downtime est le pourcentage du temps pendant lequel votre Antminer ne tourne pas.]
Braiins even offers an option to take ASIC damping into account.
If it turns out that your cost to mine a BTC exceeds its market value, it is worth buying bitcoin directly.
Unless maybe it’s winter and you’re recycling the heat generated by the ASICs to heat your home.
Example
Imagine that you have the most powerful Antminer on the market, the S19 XP (141 TH for a power of 3,010 Watts). And that you mine in France at the EDF tariff for individuals, say at 0.18 € per kWh.
Without touching the other parameters that do not weigh so heavily in the final result, it appears that it will cost you 35,700 euros to mine one BTC. The price of bitcoin being 28,941 euros at the time of calculation, it is better to unplug your Antminer and buy BTC directly.
Braiins says that with the S19 XP, your electricity needs to cost less than €0.14 per kWh to be profitable.
If, like the most nimble miners, your kWh costs €0.03, it will only cost you €6,000 to produce one BTC. The gross margin is then 382%. Much more interesting.
Here is the way brains gets those numbers for those who are curious. Formulas from @econoalchemist (updated by yours truly for an Antminer S19XP):
- Calculation 1: [Récompense par bloc] x [Hashrate de l’Antminer] x [Nombre de secondes par jour]
(6.25 BTC x 140,000,000,000,000 x 86,400 = 7.56×10¹⁹)
- Calculation 2: [Difficulté de mining] x [2 élevé à la puissance 32]
(48712405953118 x 2^32 = 2.09×10²³)
- Result 1 / Result 2 to get the daily income in BTC
(7.56×10¹⁹ / 2.09×10²³ = 0.00036 BTC)
That is €10.4 per day at the current BTC price (€28,950), from which the electricity price must now be deducted to obtain the gross margin.
- Daily electricity consumption: [Puissance de l’Antminer] x [Prix du kWh] x [24 heures]
[3.01 x 0.18 € x 24 = 13 €]
Clearly, your activity results in a daily latent loss of €2.6 since your cost is €13 while your profit is only €10.4. It would have been wiser to buy BTC directly.
Obviously, everything changes if your kWh only costs you 0.03 €. You then earn a margin of 8.24 € each day.
This is how to calculate its margin at time t. Now, how do you know which Hashrate is best to unplug your Antminer from?
What about an increase in hashrate?
Since the cost of electricity is generally fixed, it is more the hashrate that needs to be monitored. But how do you find the hashrate from which your margin disappears?
You must first determine what the amount of mined bitcoins would be if your margin is 0 for an unchanged kWh price. Easy. It must be equal to the electricity bill.
If we continue with our example of kWh at 0.003 €, we must divide 2.16 € by the price of one BTC. We get 0.000074 BTC per day.
It is then possible to determine the global hashrate by going back to the calculation since all the variables of the first calculation do not change (reward per block, hashrate of your Antminer and seconds in 24 hours).
Just divide the result of calculation 1 by 0.000074.
[7,56×10¹⁹ / 0,000074 = 1,02×10²⁴]
And divide again by 2^32
[1,02×10²⁴/ 2^32 = 2,37×10¹⁴]
In other words, if the prices of BTC (28,500 €) and your electricity (0.03 €) remain constant, your margin disappears completely when the mining difficulty exceeds 2.37×10¹⁴.
And since the mining difficulty is directly proportional to the hashrate, this means that in our example, the margin disappears when the overall hashrate is multiplied by 5.
[2,37×10¹⁴ / 4.8×10¹³ = 5]
There is therefore a margin before having to disconnect.
What about a drop in bitcoin?
Suppose the network hashrate remains stable. Here’s how to calculate the price of BTC from which your margin disappears.
If the hashrate remains stable, the amount of BTC gleaned thanks to the 140 TH/s of your S19XP will not change. It remains 0.00036 BTC per day.
Then just divide your daily electricity bill by 0.00036.
[2.16 € / 0.00036 = 6000 €]
At €6,000, money spent on electricity equals money earned by mining. In short, the price of bitcoin must fall below €6,000 for your margin to disappear.
Now you know how to monitor bitcoin price and hashrate. These small calculations will allow you to manage your Antminer well and react logically to a new context.
Finally, note that you can reduce the rate of your ASICs to gain efficiency in order to improve your margin.
PS: Don’t forget to deduct the purchase price of your machine from all these calculations…
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