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Study Shows Bitcoin Mining Is 8X More Profitable Than Other Coins

Study Shows Bitcoin Mining Is 8X More Profitable Than Other Coins

The cryptocurrency mining market has been pretty volatile over the last couple of years, granted massive price swings, updated regulatory frameworks, and fluctuating difficulty rates. Despite this aspect, tens of thousands of people throughout the world have invested in purchasing mining hardware, to help mine their favourite cryptocurrency, and turn a profit.

At this moment in time, most popular digital currencies rely on miners to dedicate their hardware resources to authenticate transactions, and ensure the fulfilment of the proof-of-work protocol, which in return, rewards them with newly-minted coin. Mining represents an immensely profitable market, especially when access to low-cost electricity is available, and when volatility brings coin prices up.

Bitcoin on the rise

Despite the large profitability rates, a recent study has concluded that bitcoin miners earn up to eight times as much profit when compared to miners of other digital currencies. The conclusion of these statistics might seem surprising, due a common misconception that all cryptocurrencies reward their miners equally. With a block reward of 12.5 BTC for each block solved, a bitcoin miner is bound to earn $100,000 at current rates.

However, the study fails to take an important aspect into account. Due to bitcoin’s top position as the most valuable cryptocurrency, mining it isn’t as easy as it seems. To solve a block, you’d need to start with a much larger investment in mining hardware, with costs being increased even more due to huge electricity consumption rates. The only manageable solution for a small-scale investor would be to join a cloud mining platform, where block rewards are shared between users depending on how much mining power they’ve contributed with.

On the other hand, mining Ethereum and other digital currencies is significantly easier for a small-scale investor. With only a few thousands invested in mining equipment, you are bound to crack a block, or at least earn higher profits after joining a cloud mining company. This is less likely to do with bitcoin, unless your starting investment is considerably larger. Therefore, while the study is accurate on a theoretical level, it fails to take other essential factors into account.

The overall mining profitability depends on the current hash rate, electricity costs, power consumption of mining hardware, block rewards, value of the coin being mined and state-owed taxes. It remains a profitable market, yet most investors have classed it as high-risk. Any person who is interested in joining the market will have to take the factors listed above into account, while also taking enough precautions to ensure a diversified mining portfolio, and coin security.


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