Will Bitcoin mining be profitable in 2023? Is Antminer S19 Bitcoin miner is a good choice? The reasons why it may be a viable option for passive income in the upcoming years are discussed in this article.
While bitcoin mining is still profitable, it may not be as profitable as it once was. That is true for a number of reasons, including the fact that cryptocurrency values were significantly lower than their peaks for the majority of 2022 and into early 2023.
Bitcoin generally still has value, but due to the cost of computer hardware and software as well as the energy required to keep that mining equipment running, determining miner profitability can be a little trickier than before.
Bitcoin is one of the main platforms for cryptocurrency mining because it employs a proof-of-work consensus mechanism. It’s crucial to understand how mining works and what the benefits and drawbacks are before deciding whether mining Bitcoin or other cryptocurrencies is worthwhile.
Table of Contents
Why Bitcoin Mining Exists
Mining Bitcoin isn’t just the creation of Bitcoin (BTC). Furthermore, it is the decentralized global network that allows miners to secure and validate all Bitcoin transactions while also generating income in the form of cryptocurrency.
It all stems from the blockchain technology that underpins Bitcoin and other cryptocurrencies. Miners use powerful computer systems, or in some cases cloud-based technology, to process blocks of digital transactions and solve challenging mathematical puzzles in order to run these networks.
Proof-of-work (PoW) is the name of this system. Every transaction made using Bitcoin and other proof-of-work (PoW) systems is recorded in the blockchain, an open, unchangeable public ledger. New Bitcoin is awarded to the miner(s) who solved it.
What is Bitcoin Halving?
The confirmation of a 1MB block of transactions by miners results in the creation of a new Bitcoin, which takes about 10 minutes. But keep in mind that mining is very competitive, especially since the reward, which is currently 6.25 BTC, is halved every 210,000 blocks.
As more Bitcoins are mined and the supply of new Bitcoins drops, the amount of Bitcoins released with every new block diminishes over time. This is known as a periodic “halving” of Bitcoin, and it usually results in an increase in the value of the digital currency.
In conclusion, mining serves to validate a crypto network and generate rewards for network users—also known as validators or miners—who participate in the network.
How Do Bitcoin Miners Calculate Their Earnings?
Most likely, you’ve heard spooky tales about how much energy Bitcoin mining uses.
Whether or not the impact is exaggerated by the media, it is a fact that energy consumption is the fundamental cost of mining. To be profitable, mining must generate more income than these expenses in addition to the initial investment in mining equipment.
Depending on the price of bitcoin, one Bitcoin mining device (commonly referred to as an ASIC), such as the Antminer S19 XP, will produce around $10 in daily revenue in June 2023. When you contrast this with the revenue from mining another digital currency, like Ethereum, which is done with graphics cards, you can see that Bitcoin mining generates two times as much money as mining with the same number of GPUs you could purchase for one ASIC. One Antminer S19 XP costs about the same as thirteen AMD RX graphics cards.
The miners can be compared to a decentralized version of PayPal. enabling the accurate recording of all transactions while earning some cash to maintain the system.
The block reward and the fees that bitcoin users pay the miners for safely and securely logging their transactions onto the blockchain are how bitcoin miners make money.
What is the Block Reward?
The owner of the mining device that finds the new block the fastest receives a certain number of freshly created bitcoin every ten minutes or so.
Initially, in 2009, Satoshi Nakamoto set the mining reward at 50 BTC and encoded the reward’s future decreases.
This payout will be cut in half approximately every four years according to the Bitcoin code. Late in 2012, it was cut in half to 25 BTC, then again in the middle of 2016, it was cut in half to 12.5 BTC.
The block reward was most recently halved three times, in June 2023, to 6.25 BTC. However, the next halvening will see a reduction in that reward.
What About Transaction Fees?
The transaction fees that Bitcoin users must pay when sending and receiving BTC are the second source of income for Bitcoin miners.
Exactly like this, Bitcoin is beautiful. Every transaction is documented in a blockchain that cannot be altered and is copied on every mining device.
The miners themselves are responsible for maintaining the records in Bitcoin instead of a central bank, and they also get to keep a portion of the transaction fees.
Taxes on Bitcoin Mining Profits
It goes without saying that while making money from Bitcoin mining is uncertain, paying taxes on your mining rewards is. Every miner needs to be aware of the local tax regulations that apply to Bitcoin mining, which is why it is crucial to use crypto tax software to keep track of everything and ensure that you are still earning enough money after taxes.
The software used to pay taxes on Coinbase purchases is explained in great detail in the following guide.
How Do You Know If You Can Profit from Bitcoin Mining?
The first is that there are many variables in Bitcoin mining. Because of this, purchasing bitcoin on an exchange may be a faster way to turn a profit. However, mining bitcoin can be more profitable when done effectively than simply purchasing it and “hodling,” which is the practice of keeping your bitcoin without selling it.
The price of Bitcoin itself is one of the key factors for miners. You will need to earn enough bitcoin from mining to cover your ongoing expenses and recoup your initial investment in the machine if, like the majority of people, you pay for your mining hardware and electricity in dollars.
All miners are affected by the price of bitcoin, obviously. Cheap electricity, affordable and effective hardware, and a good mining pool, however, are what set profitable miners apart from the rest.
1. Efficient Hardware
The Bitmain Antminer S19 XP is an example of the type of equipment I’ve used so far in this article to demonstrate how to mine bitcoin.
The cost of hardware varies from manufacturer to manufacturer and is largely determined by how little energy the machine consumes relative to the amount of computing power it generates. You will mine more bitcoin if your computer is more powerful. Your monthly costs will be lower the less energy is consumed.
Miners should consider the profitability and durability of the machine when deciding which investment to make.
The cost of the machine per TH, the power consumption of the machine per TH, and your hosting costs all affect profitability.
The machine’s ability to produce quality work determines how long it will last. It is pointless to purchase equipment that is less expensive or appears to be more efficient if it will soon fail.
It often makes sense to prioritize “price per TH” over “watts per TH” if the hosting cost is low enough because lower operational expenses (OpEx) will offset any efficiency loss on your machine. Conversely, if the hosting cost is high, it makes sense to prioritize “watts per TH” over “price per TH.”
The Bitmain Antminer S19 series are the most profitable Bitcoin ASICs on the market right now.
Bitcoin Mining Hardware Turnoff Prices
Considering the price at which BTC would have to decline in order for the machines to stop making a profit is a helpful way to conceptualize hardware. In order to earn more bitcoin from mining than you would have by simply purchasing the cryptocurrency, you need your machine to continue to be profitable for a number of years.
According to the following table, the majority of the most advanced machines could continue to be profitable at a bitcoin price of $5000 to $6000. If they are powered by electricity that costs less than $0.05 per kWh, some machines might be able to handle a drop below $5,000.
Sadly, even in China, the majority of older machines are currently unprofitable. Since its release in 2016, the Bitmain S9 has been in use, and it’s interesting to note that these devices are still in use in Iran and Venezuela, where the cost of electricity outweighs the risk of seizure. As access to solar and wind energy in North America increases, there might eventually be more reliable sources of electricity for under two cents.
Sending your machines to those farms yourself is the only way for an individual miner to compete with operations that have access to such inexpensive electricity. But this isn’t a service that many farms provide.
2. Cheap Electricity
The cost of electricity varies from one country to another. Additionally, in order to promote economic expansion, many nations charge less for industrial electricity. As a result, the cost of electricity for a mining farm in Russia will be half that of a mining farm in the United States. In places like Germany, well as you can see from the chart, that’s another story…
If your electricity costs $0.045 per kWh and you live in a country like China, Russia, or Kazakhstan, running an Antminer S19 for a month will actually cost you around $110. According to the table below, at those electricity prices in May 2020, you would earn $45 per month.
Profitability with $0.05 kWh electricity
However, with the typical home electricity price in the USA, of $0.12 kWh, you would be running the machines at a loss from the start and it would not make sense to mine under these conditions:
Profitability with $0.12 kWh electricity
Nevertheless, miners looking to use up flare gas being wasted at oil well sites are becoming more and more interested in the US. It is very affordable if you can harness that energy.
Still, if you are mining out of your home, even with the most powerful Bitcoin ASICs you can only have a meager income。
3. Reliable Mining Pool
All miners today must use mining pools to conduct their operations. The network of Bitcoin mining equipment is so big that your chances of consistently finding a block (and earning the block reward and transaction fees) are very slim, whether you’re mining with one machine or a thousand.
An Antminer S19 XP ASIC miner with 110 TH/s and a Bitcoin Network Hashrate of 100 EH/s (100,000,000 TH/s) has a 1 in 1,000,000 chance of mining a Bitcoin block. They might have to wait 10.4 years to mine that one block at a rate of one block every 10 minutes.
Slush Pool and F2Pool are the two pools with the most history. One of the biggest Bitcoin mining pools, F2Pool contributes to about 15% of the entire Bitcoin network.
PPS+ is the payout system used by F2Pool. By paying block rewards and transaction fees to miners regardless of whether the pool itself successfully mines each block, PPS+ pools remove the risk from the miners. The miners are typically paid by PPS+ pools at the conclusion of each day.
PPS+ pools determine how much to pay out to the miners in their pool in this manner. Here comes the science part…
When the Bitcoin Network Hashrate is 85 EH/s (85,000,000 TH/s), a miner with an Antminer S19 XP with 110 TH/s will generate about 0.001164 BTC per day before pool fees.
0.001164 BTC is determined by multiplying 110 (miner hashrate) by 85,000,000 (network hashrate), 144 (number of blocks per day), and 6.25 (block reward).
Let’s assume that the pool fee is 2.50% because it typically ranges from 2.50 to 4.00%; as a result, the net mining income is equal to 0.0011349 BTC.
This Antminer S19 XP generates $10.2 in daily revenue if BTC is priced at $9,000 per unit.
You will receive your daily bitcoin payouts from the mining pool, so it is crucial to pick the right pool. It’s crucial to pick a pool that is trustworthy, open, and provides the right set of tools and services to assist you in streamlining your mining operation.
4. Fees When Selling Bitcoin
The costs associated with selling the Bitcoin you mine are a frequently disregarded aspect of mining profitability. You might need to sell your coins on a retail exchange like Kraken or Binance if you are a part-time miner. Depending on the exchange’s fee structure and the current state of the orderbook, your fees can fluctuate between low and high at different times.
However, if you are a professional miner like F2 or Bitmain, you probably have really advantageous deals with OTC desks to sell your coins for little to no fees – depending on the state of the market. For their coins, some miners are even paid more than the spot price. In any case, given the volume of Bitcoin that professional mining operations handle, they have more negotiating power to secure favorable terms for all of their needs, not just electricity purchases.
We advise you to use our mining profitability calculator to check if you have what it takes to mine profitably first.
Bitcoin Mining Advantages and Disadvantages
Here are some advantages and disadvantages of mining cryptocurrency.
• Proven track-record. Consensus algorithms based on proof-of-work (PoW) have been around for a long time and are the foundation of crypto mining. The Bitcoin network hasn’t encountered a major security issue in that time.
Many in the sector think this is due to Bitcoin’s high hash rate, which is the measure of the amount of processing and computing power added to the network through mining.
Smaller proof-of-work (PoW) networks have historically been susceptible to hacking attempts, though the same can be said for smaller proof-of-stake (PoS) networks.
• Cryptographic security. PoW may be the best option when entrusting a network with large sums of money. Attacking a PoW blockchain is challenging; as a result, would-be hackers frequently settle for becoming legitimate miners in their place.
• Energy usage. Electricity is used extensively in bitcoin mining. This is cited by critics as PoW’s primary drawback. The Bitcoin network may consume as much energy as a small nation in its entirety. Although the overall energy consumption of Bitcoin is declining and a large portion of it now comes from sustainable sources, this is still the main cause for concern.
• Barriers to entry. PoW mining gets harder over time, making it harder for the average person to participate. A major principle of a decentralized PoW network is to distribute tasks as well as profits among many users. A small number of large companies, however, who have the financial means to erect warehouses packed with mining equipment, control the mining industry as it becomes more complex and challenging.
|Crypto Mining Advantages
|Crypto Mining Disadvantages
|Proven track record
|High energy usage
|Greater barrier to entry
|Difficult to attack
|Gets more difficult over time
The Risks of Crypto Mining
Cryptocurrency mining has risks and drawbacks, even though it occasionally pays off. Here is a quick summary.
Cryptocurrency mining requires a lot of resources, as was already mentioned. The amount of electricity required to run mining rigs results in environmental pollution.
The mining industry is also susceptible to malware and other security risks. For instance, it’s possible for malicious actors to gain access to someone’s computer using methods (like phishing) before secretly installing mining software and programs. As a result, without being aware of it, the victim might be sharing their computing power and electricity mining with a hacker.
The federal government is working on bringing regulation to the cryptocurrency industry, so anyone involved in the industry can probably expect new rules and regulations to be announced in a few years. Those new rules and regulations will likely affect miners, too, so that’s another thing to keep in mind.
Crypto mining requires some upfront investment. You’ll need to buy a “rig,” first and foremost, and stocking up on computer power isn’t always cheap. However, there are dangers involved, just like with any investment. Future mining may not be as lucrative, so you might not get the returns on your investment that you had hoped for.
Or, if new regulations make mining illegal (though there’s no indication that will happen), investing in mining equipment may have all been a sunk cost.
Mining Bitcoin With Antminer S19
The typical power requirement for mining cryptocurrency is high, and the efficiency of these chips is sometimes expressed in terms of hash rate per kilowatt or joules per kWh.
The Antminer S19, for instance, produces approximately 31.67 TH/kW of energy, while the more recent S19 XP has an efficiency of approximately 21.5J/TH.
While ASIC chip efficiency has been slowly increasing as manufacturers shift toward smaller chip designs—previous generation miners used 7nm chips, while the current generation uses 5nm—their absolute power consumption has climbed as ASIC devices have become more competent.
However, even though moving from a 7nm to a 5nm (and eventually smaller) design process typically results in increased power efficiency and faster performance, it isn’t the only approach to provide miners with better efficiency.
Among the ways to do this is through improved mass production and more energy-efficient design. This includes the most recent Blockscale chips from Intel, which have an overall performance of 148 TH/s and a maximum performance of 26 J/TH (with 256 chips).
Although Intel’s chips are almost half as expensive as Bitmain’s most recent product, the S19 XP, they still fall short of Bitmain’s S19 XP in terms of efficiency. The Blockscale systems cost about $5,625 per unit compared to the S19 XP’s $11,620.
Rich miners may benefit because the company is known to offer sizable discounts for bulk purchases and early orders.
Overview Of The Antminer S19-Series
The new-generation Bitmain mining machines already on the market today are:
- Antminer S19 (95TH/s; 3250W; 34W/TH)
- Antminer S19 Pro (110TH/s; 3250W; 29.5W/TH)
- Antminer S19j (90 TH/s; 3250W; 36W/TH)
- Antminer S19j Pro (96 / 100 / 104TH/s; 2832 / 3050 / 3082W; 29.5W/TH)
- Antminer T19 (84 / 88TH/s; 3150 / 3344W; 38W/TH)
- Antminer S19 XP (140 Th/s; 3010 W; 21.5W/TH)
- Antminer S19 Hydro (158 Th/s; 5451 W; 34.5W/TH)
- Antminer S19 Pro Hyd (177 Th/s; 5221 W; 29.5W/TH）
- Antminer S19 Pro+ Hyd (198 Th/s; 5445 W; 27.5W/TH)
- Antminer S19 XP Hyd (255 Th/s; 5304 W; 23.5W/TH)
How Long Does It Take to Mine 1 Bitcoin in 2023?
There is no right or wrong answer here: The time it takes to mine a single bitcoin varies and is largely influenced by the hashing power each miner contributes. Let’s take Bitamain Antminer S19 XP as an example:
In general, the faster a block is solved, the faster the miner will receive the block reward in the form of freshly created bitcoins. Mining difficulty is another important variable. The likelihood of discovering a new block increases as difficulty decreases.
When prices rise, more people are generally motivated to mine crypto. The difficulty adjustment, which occurs every two weeks, then tends to rise as the Bitcoin hash rate rises as more miners turn on.
When prices decline, the opposite usually occurs as the cost of electricity and mining equipment for bitcoins increases relative to the value of the coins being mined. The difficulty typically adjusts downward as hashing power decreases.
How Many Bitcoins Will Be Mined in 2023?
About 900 new Bitcoins are created daily through mining. In the event that rate persisted for the entire year 2022, then a total of about 328,500 Bitcoin would have been mined. Also in 2023, that ought to be accurate. The total number of Bitcoins that can still be mined is roughly 2 million.
It’s interesting to note that an increase in Bitcoin miners does not result in more coins being produced. One block is currently mined every 10 minutes, with the block reward currently set at 6.25 (this will hold true until the next Bitcoin halving). Hash rates rise as block contention increases, but the rate at which new coins are created stays constant.
Alternatives to Mining Bitcoin
The most profitable cryptocurrency to mine may be the one with the lowest difficulty and highest price for those who decide to take on the laborious task of cryptocurrency mining. But it’s critical to remember that these dynamics are in a constant state of flux, so the best cryptocurrency to mine today might not be the best one to mine tomorrow.
Historically, the only time altcoin miners have made significant profits has been when they were mining lesser-known, cheaper coins in the weeks and months before a large increase in prices, or an “alt season.” The first time this occurred was in 2017, and the second time was in late 2020 or early 2021.
Is It Worth Mining Ethereum in 2023?
The second-biggest player on the cryptocurrency market is Ethereum. The Ethereum network, however, no longer supports mining, which is unfortunate for miners.
That’s because the “Ethereum 2.0” upgrade has gone into effect, which changed the consensus mechanism for from proof-of-work to proof-of-stake in Ethereum. As a result, mining is no longer used by the network.
Only those who hold large quantities of ETH will be able to stake their tokens and become “validators.” The odds of winning the upcoming block rewards are distributed among validators, with those who have staked the most ETH having the best chances. You can do more research about crypto mining vs. staking to learn more.
In 2023, mining cryptocurrencies is still profitable, but it isn’t as profitable as it once was due to falling cryptocurrency prices from their highs and rising operating and maintenance costs. That’s not to say that prospective miners won’t make a profit, but there are more things to consider than in years past.
Considering this, mining is an intricate process that entails high costs and dangers. Joining a mining pool rather than going it alone may be more advantageous for the majority of people interested in crypto mining.
You must decide whether to start your mining career because this is not in any way a recommendation for spending your money. Always invest only what you can afford to lose.
Is Bitcon Mining Profitable?
Bitcoin mining can be profitable, but there are many things prospective miners need to take into consideration. It might not be profitable for everyone due to falling cryptocurrency prices and rising resource and equipment costs.
How Much Bitcoin Can An Antminer S19 Mine?
Of course, if you calculate the net profit, you also need to deduct the cost of purchasing the mining machine.
If you choose to host the miner, you will also need to deduct the hosting fee.