Bitcoin mining in 2021: what is the most profitable way to mine cryptocurrency?

In mid-January, the amount of computing power for Bitcoin mining set a new record - 151 EH/s.an increase of 45% over the past 12 months. This means that more and more miners turned on devices for mining cryptocurrency, writes RBC Crypto.

The rise in the price of bitcoin to a record $ 42,000 againmade mining super profitable even on outdated devices. Three heads of mining companies told what will happen to the industry in the coming year, how the profitability will change and whether it is worth starting mining bitcoin right now.

"It is getting more and more difficult for individuals to be engaged in mining"

Sergey Arestov, co-founder of BitCluster.

The second half of 2020 was golden for everyoneminers. Old devices, such as S9 and L3+, which cost 3,000 rubles in the summer. and were unprofitable even at an electricity tariff of 2.95 rubles. suddenly they turned into “typewriters”, and now they bring in 4 thousand rubles. per month. Their cost now reaches 15 thousand rubles.

The production of new devices is contracted tolate 2021. Giants such as the Marathon Patent Group are buying 70,000 Antminer S19s from Bitmain. Only this deal will increase the network hash rate by 7 EH / s, which is almost 5% of the total hash rate.

In addition, the explosive growth of network complexity wewe will see with the arrival of high water in Sichuan, when the internal Chinese migration begins and all the equipment of the Celestial Empire is plugged into the socket. This will undoubtedly contribute to the fact that it will be almost impossible to mine bitcoin on old devices, unless the rate hits $ 70 thousand. After a 250% growth in December, no one will say that this is impossible.

Go mining and compete withIt is becoming more and more difficult for American giants for individuals, but when the market calms down, super profitability will go away, the cost of electricity will again become the main criterion, and in Russia it is one of the lowest in the world.

There is already news that Swedish and Norwegian companies are resuming mining, but we remember that during the stagnation, expensive electricity led to a series of bankruptcies.

"The Bitcoin network has passed an important milestone"

Philip Modnov, CEO of LAZM.

Basic parameters on the basis of which they calculatethe efficiency of mining is the revenue per unit of capacity of 1 TX24 servers and the rate of the mined cryptocurrency. This distinguishes the calculation of the profitability of mining from the profitability of investments in cryptocurrencies, where the main parameter is the same - the rate at the time of buying and selling a digital asset.

The Bitcoin network passed a major milestone in 2020.the third halving, when the reward to miners for the mined block was halved, from 12.5 BTC to 6.25 BTC. Let me remind you that miners have two sources of income - the reward for the mined block, which is paid by the Bitcoin system itself, and the commission for the completed transaction, which is paid by the sender. Due to the reduction in mining rewards, miners' revenue is reduced, and mining enterprises are looking for ways to compensate for lost profits - switching to more energy-efficient and powerful equipment, not selling the mined bitcoins immediately, but waiting for the exchange rate to rise, and so on. Therefore, the strengthening of Bitcoin after the third halving was quite expected.

Large amount of obsolete equipment on chips16nm was withdrawn from the market in the fall of 2020, especially in China after the end of a period of low electricity prices, traditionally caused by the rainy season and cheap electricity from hydropower plants. But little new equipment was installed in the fall, so the growth in network complexity slowed down compared to last year. Instead of multiple growth - only + 35% yoy.

As a result of halving, changes in network complexity andcurrency fluctuations, mining revenue fell from $ 0.17 to $ 0.07, then soared again to $ 0.21. For Russian miners, the drop in revenue was slightly offset by the growth of the dollar against the ruble, since part of the operating expenses, including electricity bills, is denominated in rubles.

Efficient management of data center resourcesallows miners to work efficiently during any fluctuations. It is a key skill to be able to use equipment to its fullest advantage for a long time. In this case, a massive market drop doesn't affect the miner as much, and you don't have to shut down when everyone else has given up due to service and electricity prices.

Data centers with a large number ofmachines and favorable accommodation conditions, no disaster from halving or exchange rate fluctuations occurred. It is more difficult for private miners to work in such conditions, so they should cooperate with proven cloud mining services that can be counted on one hand on the market. It is also necessary to take into account the changes in Russian legislation regarding digital assets, which came into force in January 2021.

The renewal process will continue in 2021computing equipment in mining centers. The most efficient machines will be installed en masse in data centers without regard to the price of electricity, and outdated models will be transferred to cheaper locations. An active increase in network complexity, which did not happen in 2020, will begin in the spring of 2021. This will lead to a correction in revenue.

"It's never too late to start mining cryptocurrency"

Jakhon Khabilov, CEO of Sigmapool.

It's never too late to start mining cryptocurrency.The question is about the conditions for equipment maintenance and energy costs - these are two main cost items. You don’t need to agree to any conditions, you need to look for the best options that existed before the price rally. It’s worth starting to mine cryptocurrency now, and it will probably also be profitable tomorrow.

Will Bitcoin become the currency in 2021?Is it more efficient for companies to mine than for private individuals? I rather disagree with this, because in the entire previous history of this cryptocurrency there was no such period when its mining was unprofitable even for single players.

2021 has every chance of being the last yearwhen old-generation equipment with chips larger than 10nm becomes completely ineffective. In all likelihood, the current Bitcoin price rally will be the last exhalation of the use of equipment of the Antminer S9 class.

After the market is saturated with equipmentnew generation, by the middle of the year the old class devices will become ineffective. Novice miners need to keep this in mind, because 2021 will be marked by a complete transition of the entire global hashrate to equipment of a new technological level.

Cloud mining — the best Bitcoin mining option for 2021

Cloud mining is a model of earningcryptocurrency, which creates groups (mining pools), with one goal: to generate more income, in comparison with conventional distributed mining, due to the management of equipment by a contractor who solves all issues related to technical and software components.

Cloud mining setup does not requirea productive computer or knowledge in the field of blockchain and cryptocurrencies in general. Setting up in this case consists in going through the standard registration procedure on the pool, depositing money (usually ordinary money or bitcoins) and choosing a tariff plan. Then the user specifies the address (personal wallet) where the mined cryptocurrency will be withdrawn.

Rating of TOP-5 cloud mining services (with actual estimates for January 2021):

Service	Rating	Detailed overview
IQ Mining (Editor's Choice!)	9.5	Read the review
ECOS	7.2	Read the review
YoBit VMining	6.5	Read the review
BitDeer	6.4	Read the review
HashFlare	6.3	Read the review

The criteria by which the score is given in our rating:

Profitability and profitability– we calculate the payback period, clarify the reality of mining.
Prices and commissions– we take into account the validity of tariff plans and compare them with competitors.
Deposit / withdrawal, discounts, reliability– we analyze reviews, test the correctness of accruals and withdrawals.
Convenience of the platform and site– we evaluate the functionality, errors and failures when working with the service.
Features of the company– unique services and useful services, period of work on the market.
final grade– the average number of points for all indicators determines the place in the ranking.