Is Crypto Mining Profitable? Electricity, Hashrate and Difficulty

The revenue side of the sum

Mining pays a share of new issuance proportional to the work you contribute. Bitcoin issues one block roughly every ten minutes, so 144 blocks a day, and since the April 2024 halving each block pays 3.125 BTC — about 450 BTC a day across the whole network, plus transaction fees. Your cut is your hashrate divided by the network hashrate. On an 800 EH/s network a 200 TH/s machine holds 2.5 ten-millionths of the total, which comes to 0.0001125 BTC a day.

Two adjustments make that figure honest. Pools charge one to two percent of rewards for smoothing your payouts, which is worth paying because solo mining at this scale means going years between blocks. And solo variance is not a rounding error: a machine earning a ten-thousandth of a block per day would, alone, expect a block roughly once a century. Everything below assumes you mine in a pool and receive your statistical share continuously.

Electricity is the whole business

Power cost is machine watts ÷ 1,000 × 24 × price per kWh. Our 3,500 W miner draws 3.5 kW, so 84 kWh a day. Divide the daily revenue by that consumption and you get the break-even price directly: $11.25 ÷ 84 kWh = $0.134 per kWh. Below that number the machine makes money, above it the machine converts electricity into a slightly smaller amount of Bitcoin, every hour, whether or not you are watching.

Efficiency is what separates hardware generations, and it is measured in joules per terahash. Our example machine does 3,500 W over 200 TH/s, so 17.5 J/TH. A machine at 30 J/TH earns the same revenue per terahash but burns 70 percent more power for it, which moves its break-even price down to roughly $0.078 per kWh — enough to make it worthless at a tariff where the efficient machine is still comfortable. This is why older rigs are scrapped while the network hashrate keeps climbing.

Difficulty and halving work against you

Every 2,016 blocks, about two weeks, Bitcoin retargets difficulty so blocks keep arriving every ten minutes on average. If the network hashrate grew during that fortnight, difficulty rises and your fixed hashrate now buys a smaller slice of the same 450 BTC. Your machine has not slowed down; the denominator got bigger. Over years this is a steady, structural decline in the coins any given machine earns, and it is the single most underestimated line in a mining spreadsheet.

The halving is the same force applied in one step. Every 210,000 blocks, roughly four years, the block subsidy halves — 6.25 BTC became 3.125 in April 2024, and the next cut is due around 2028. Overnight, identical hardware on an identical network earns half as many coins. A rig that clears its power bill today is not guaranteed to clear it after the next halving unless the coin price roughly doubles or your tariff roughly halves, so the amortisation of the hardware has to be planned inside the current epoch, not across it.

The costs the calculator leaves out

A daily profit figure is not a return. The machine itself has to be paid off: at $2.85 a day, a $3,000 miner needs about 1,050 days — nearly three years, straddling a halving — before it has returned its purchase price, and that assumes difficulty, tariff and coin price all hold still, which they will not. Add pool fees of one to two percent, and the reality that hardware is worth little on the second-hand market precisely when mining stops paying, because everyone is selling at once.

Then there is everything around the machine. An ASIC at 3.5 kW runs hot and loud, needs a dedicated circuit, and dumps its entire power draw into the room as heat that often has to be cooled — in a warm climate that cooling is a second electricity bill. Domestic tariffs frequently have tiered pricing where a constant 3.5 kW load pushes you into a higher band, so the marginal rate you should use in the sum is above your average rate. Where the heat replaces heating you actually want, the economics change; in most other settings the honest answer is that hosted or industrial-scale mining is the only version that pays.

Frequently asked questions

Can I mine Bitcoin profitably at home?

Almost never on a standard residential tariff. The break-even in the example above is about $0.134 per kWh, and typical household rates sit above that once tiered pricing and cooling are counted. It can work with genuinely cheap power, an off-peak-only schedule, or where the waste heat replaces heating you would have paid for anyway.

What electricity price do I need to break even?

Divide your daily revenue by your daily kWh. In the worked example, $11.25 of revenue against 84 kWh gives $0.134 per kWh. Recompute it after every difficulty adjustment and every large price move, because both change the numerator while your tariff stays put.

Is mining an altcoin easier than Bitcoin?

The arithmetic is identical — your share of issuance against your power bill — but a smaller network means your hashrate buys a larger share, and a thin market means the coins may be hard to sell at the quoted price. You are also exposed to a single project's survival. Note that Ethereum cannot be mined at all since it moved to proof of stake in 2022.