Bitcoin mining difficulty has increased over 3.5 fold this year, climbing from 1.93T at the start of the year to 7.02T. The monthly increment was at the rate of 15 per cent on average.
That means, the hashing power contributed by miners who joined the digital gold rush freshly this year accounted for roughly 75 per cent ((7.02-1.93)/7.02) of the entire bitcoin network. Did these new miners earn the coveted money given that the value of bitcoin has decreased by almost 70% since the start of the year?
According to the calculations based on the electricity price at 0.4 yuan ($0.06) per kW/h, an Antminer S9, priced at 3,500 yuan ($510) in August, could mine 0.018423 bitcoin on average, dropping a sharp 67% by comparison to the figures of this January, during which the averaged bitcoin mined was 0.05646. And the bitcoin price has fallen from $12.9k to $6.7k during the past eight months. If they choose to sell the bitcoin after it is mined, the net profit would have decreased by 80% during the past eight months.
It seems to have a long time to go for these new miners to earn their investment back, though the purchase expense for an S9 has decreased by almost 90% from a high of $4,400 to $510. Nevertheless, if these miners keep on mining, when will they make profits?
Suppose that the bear ends right now, the monthly mining difficulty increases at an optimistic rate of 10%, and the price of bitcoin climbs 5% per month. It is predictable that miners who start their mining career in 2018 will lose money in May 2019, as what they mine next May cannot cover the electricity costs.
In this context, if miners don’t want to lose money, they must be well-funded to cover the loss and hold their mined bitcoins, at the same time, pray for the early coming of the bull.