Calculating Bitcoin mining profitability realistically

Before you invest in a miner, you should realistically assess the profitability. Important up front: with a single home miner it is not about reliable profit but about probabilities. This guide shows you which factors matter and how to roughly calculate what remains.

The four decisive factors

• Your hashrate (TH/s): your share of the global computing power.
• Network difficulty / hashrate: rises over the long term and lowers your relative share; it adjusts every ~2 weeks.
• Block reward + fees: currently 3.125 BTC per block plus transaction fees.
• Your electricity costs: the largest ongoing item – see Calculating electricity costs.

Example calculation: pool mining

In a pool you get paid proportionally to your performance – the return is small but predictable. Rough calculation for a Bitaxe with 1 TH/s at ~800 EH/s network hashrate: about 450 BTC are newly distributed per day (144 blocks × 3.125 BTC). Your share is about 1 ÷ 800,000,000 of that – i.e. on the order of 0.0000006 BTC per day. Even at a high price this is in the cent range per day and therefore usually below the electricity costs of a Bitaxe.

In other words: with a single tiny device, pool mining is rarely cost-covering. Only with significantly more hashrate or very cheap electricity (e.g. solar surplus) does the picture shift.

Solo mining in the calculation

With solo you statistically expect nothing for a long time – and then possibly a whole block at once. The “expected value” per day is mathematically similar to the pool, just extremely unevenly distributed: usually zero, very rarely everything. This is not an investment but the block lottery described in Lottery miner explained.

Use online calculators with caution

Mining calculators online give a rough indication but often assume constant difficulty and ideal conditions. In reality difficulty tends to rise, and the Bitcoin price fluctuates strongly. So plan conservatively and treat a possible block hit as a bonus, not part of the plan.

What about “break-even”?

With a small Bitaxe the honest answer is: through pure mining returns you will statistically hardly recoup the purchase. You get the equivalent value elsewhere – in the learning effect, the contribution to decentralization, the usable waste heat and the appeal of the lottery. Anyone looking purely at returns should know this beforehand.

Realistic expectation: home mining costs a few euros per month and is fun. Anyone hoping for a sure profit will be disappointed – anyone seeing it as a hobby rarely will.

You still want to try it – with open eyes? Then start cheaply with the Bitaxe Gamma 601 or get the full overview in the big home-mining guide.