What determines the profit on mining. Basic top 3 criteria

Most people who start mining cryptocurrencies join the number of crypto-enthusiasts with one simple goal — to earn. And, unfortunately, this is the majority, not particularly versed in the nuances of mining processes, then quite sincerely and often unpleasant surprised that their final income does not correspond to rainbow and bold plans and dreams. The course jumps with astronomical speed up and down, and after it loses its precious interest and the degree of profitability of mining.
What affects the profitability of your mining?
In order to reduce growing tensions, today we decided to once again work together to figure out how the world of cryptocurrency to find out what determines the profitability of your mining (and, in particular, with mining hashcoins datacenter), and to understand why the fall in the value of cryptocurrency is not a reason for excitement.

Your mining income depends on the global situation
... and a number of fundamental factors at the same time. What? First of all, difficulties, rewards for mining, commissions and exchange rates. And-news, bad and good, and information noise in General. Let's sort this out in order.

The complexity and reducing the rewards
Mining itself is the process of generating new blocks in the blockchain chain and recording transactions in them. When an individual miner (or a group of miners) manages to find a new block, they receive a reward for the work done — a certain amount of cryptocurrency in the network where mining took place. For example, bitcoins.

This can be compared to the usual work for hire — people do something to maintain the network (find new blocks and confirm transactions) and get a reward (bitcoins).

It is believed that 10 minutes is enough for the information to be verified by all participants of the network and reached from the first transaction node to the last one.

If the process takes less time, it means that the total capacity of all miners has increased. How does the system react? Increases the difficulty of mining to adjust the time back to 10 minutes. On the contrary, the complexity decreases if the process slows down due to the fact that some miners left the game, the hashrate of all devices in the world decreased.

The complexity is automatically recalculated every 2016 new blocks of the Bitcoin network itself and does not depend on the desires of individual large and small players or mining services. On average, this happens every two weeks.

The award shall be paid to the miner who found the last block. However, since this is a long process, it is more profitable for people to join groups to quickly find new blocks, folding their capacities and thereby increasing the chances of the group to receive an award. If all fails, the reward is divided between all members of the group depending on the elapsed power — it employs the standard principle of "put in more, got more." It is on this principle that mining pools work. However, the reward depends directly on the complexity — the higher it is, the less likely to find a block, that is, the very presence of a large number of capacities does not guarantee the receipt of remuneration, but only increases the likelihood that mining will bring results.

Moreover, over time, miners begin to receive a smaller reward at the same capacity. Why is this happening? Because the amount of the award in the bitcoin network, on the one hand, is fixed, and on the other — decreases over time.

At the moment, 12.5 bitcoins are mined every ten minutes in the world. In 2012, the award was 50 bitcoins, in 2016 — 25, and about 2020, the award will again be halved.

At the same time, bitcoin is becoming more and more popular, and more and more people come to mining with the same amount of remuneration. And either the current 12.5 coins are divided into 100 people, or 100,000 people. The difference is obvious.

With the increase in the number of miners, the income of each individual Shakhtar decreases, because competition for a limited reward grows.

Accordingly, in order for the global growth in the number of miners each time invariably receive the same share of all mined bitcoins, it is necessary to regularly increase the number of their capacities. And in proportion to the number of new people joining mining around the world. It is difficult and, in fact, unrealistic.

What remains? Just take into account the fact that the number of miners included in the process will always affect the level of profitability in one direction or another. And follow the schedule of difficulty changes.

Commission
Here we divide the two entities: internal fee for service application installed hashcoins datacenter and fee for bitcoin transactions.
The Commission hashcoins datacenter is constant and unchanging, which includes the price for electricity, maintenance of miners, replacement of obsolete equipment, depreciation and much more. Since we live in a real world where the state uses Fiat currency, we can't pay bitcoin bills and the company is paying in dollars.

The amount of Commission (maintenance fee) for each contract can be viewed on our website: for example, under the contract SHA-256 for every 10 GH/s once a day will be charged $0.0035 Commission.

For your convenience, the system automatically recalculates the amount in dollars in the amount of bitcoins (because the balance in the Cabinet comes in BTC), which is deducted daily from your profitability. Due to the daily jumps in the bitcoin exchange rate, this amount in BTC is different every time, but in dollars it is always stable — and you can see it in person by making simple calculations in the currency Converter.

Commission for transactions in the bitcoin network-the story is quite different. This indicator is not fixed and changes regularly depending on the situation around bitcoin and its rate. If you look at the schedule of Commission changes, you can see that its peak figure reached in December 2017, when the average Commission for the withdrawal of coins reached $50.

What's the meaning of that? Before withdrawing coins, it is necessary to get acquainted with the current Commission and think carefully: can anyone afford to withdraw $ 50 by paying 10 as a Commission? With varying levels of fee and streamline the process for our users associated periodic restrictions on withdrawal BTC to hashcoins datacenter.

Course
Bitcoin, like any other currency, has an exchange rate in relation to, for example, the dollar, the Euro, the ruble and any other Fiat currency. And the higher the rate, the higher the profitability of your mining.

Why?
Because in the process of mining you get bitcoins and can at any time exchange them for Fiat funds, say, dollars. Naturally, when the exchange takes place at the rate of 1:20,000 — it is more profitable than 1:8000. But the fact that the rate is now falling does not mean that your mining becomes unprofitable — it continues to work for the prospect of exchange rate growth.

Judge. A significant recession of bitcoin occurs annually. Risks and fears arose both for crypto-enthusiasts and for major players in the mining world and in 2015, when the rate fell fourfold, and in 2016, when the division of the block award took place. However, after a temporary period of instability, the value of bitcoin always grows back.

The most significant jumps in the bitcoin exchange rate:
  • 94% — June-November 2011 from $ 32 to $2
  • 87% — November 2013 – January 2015 with $1166 to $170
  • 79% — April 2013 from $266 to $54
  • 60% — January 2018 with $19,000 to $7600
  • 40% — September 2017 from $5,000 to $2972
  • 36% — June 2012 from $7 to $4
The best thing you can do in this situation is just to continue mining, not to sell bitcoins immediately, giving in to panic, but just wait for the right case and a new round of growth.

What determines the course? From supply and demand, as is the case with most consumer goods. In fact, the price of any cryptocurrency is a balance between the price tag, which is posted by sellers, and the amount that buyers are willing to give. In turn, both of them largely rely on the overall situation in the world of crypto-Economics and the economy in General.

Thus, the profitability of mining depends on a set of factors, many of which are difficult to predict in advance. Nevertheless, attention to the current changes in the cryptocurrency market can make any turns in the rate of exchange and profitability less unexpected.

And we remind you that you can calculate the profitability of your mining and once again make sure the transparency and honesty of income forecasts calculated by our service at any time in a special calculator, which is freely available. NB!: when using the calculator, please do not forget to take into account the service fee.
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