Bitcoin mining: Should I do it?

By | 4.10.2016

Is it worth it to mine bitcoins? Should I do it on my computer? The short answers would be: it depends and definitely no, respectively. To shed more light on the issue of bitcoin mining, Karl O’Dwyer and David Malone published a short study which analyses the costs of electricity used to mine bitcoins. It is commonly known that bitcoin mining is more and more difficult as there is more of the virtual currency already in circulation. Therefore, computers have to solve more complicated mathematical problems and use more electricity. As a result, mining has become more expensive.

The authors calculated that it has never been profitable to mine bitcoins even with Core i7 950 processors or with a Sony Playstation 3. Moreover, they argued that the only way to mine bitcoins profitably, taking into account only electricity usage as a cost, is to employ special hardware – Monarch BPU 600 C (ASIC) – which was constructed specifically for bitcoin mining. Note, however, the profit gap is closing even for such advanced hardware. Equally interestingly, the authors estimated how much electricity is used to mine and administrate the bitcoin currency and found out that it is comparable with the electricity usage of Ireland. The picture below depicts the development of the cost of bitcoin mining and the value of bitcoins in US dollars.

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Reference: O’Dwyer, K. J., & Malone, D. (2013). Bitcoin mining and its energy footprint. In Irish Signals & Systems Conference 2014 and 2014 China-Ireland International Conference on Information and Communications Technologies (ISSC 2014/CIICT 2014). 25th IET (pp. 280-285). IET. Available here.

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