Blockchain research group Diar reports that despite regular news about mining enterprises closing down, and with miner revenues falling to a 19 month low, profits earned from Bitcoin mining have begun to rise. But don’t rush out to buy equipment just yet.
Only $195 million worth of Bitcoin was minted in February, ten percent less than in the previous month. These amounts are a far cry from the $951 million all-time highs seen at the height of the bull run at the end of 2017.
Diar said that miners running optimal equipment and who have secured wholesale electricity prices have seen their gross margins – the difference between a miner’s earnings and their total cost of investment – squeezed, requiring a “massive deployment of hash power in order to stay afloat”.
To remain competitive in mining it is imperative that miners use the latest and most powerful application-specific integrated circuit (ASIC) mining equipment. However, the development and manufacturing of ASIC as mining devices is a costly and complex process.
Modern ASIC mining equipment benefits from a low power consumption and offers higher computing power. ASICs have outstripped other mining devices, such as CPUs, GPUs, and FPGAs after gaining traction in 2013, when other hardware mining devices faced stumbling blocks.
Mining Bitcoin Can Still Make You Money, If You’re In The Right Location
Mining Bitcoin was once only undertaken by a small number of devotees using home-built rigs, but it has moved on and is now big business. Manufacturing and obtaining the latest hardware is an internationally competitive game.
Mining Bitcoin can still be profitable if done at the right location. Research undertaken last year by Elite Fixtures, found that the cost of mining one Bitcoin varies significantly around the world. The costs to mine were based on average electricity rates, naming Venezuela as the cheapest place to set up your hardware.
However, F2Pool crypto mining pool founder, Mao Shixing, said last month that China is the best place to mine cryptocurrencies due to the availability of skilled manpower and cheap electricity costs.