Sign up FAST! Login

Bitcoins not worth the energy needed to mine them for ordinary people.

Stashed in: Energy!

To save this post, select a stash from drop-down menu or type in a new one:

Ryan Lawler points out that you need special hardware to make it worthwhile:, which tracks Bitcoin-related data, estimates that miners are using 1,005.59 megawatt hours of electrical consumption each day in their pursuit of new blocks of Bitcoins. That ends up costing about $150,000 in power costs each day to mine the currency. [Hat tip to Bloomberg for reporting on the data.]

That may sound like a lot, but miners on average are making money. According to Blockchain, miners are generating $470,000 in Bitcoin-related revenue per day. In fact, due to the recent interest in the virtual currency and its popularity, operating margins for Bitcoin miners are close to record highs.

While it might be easy to look at those numbers and think it’s NBD to just like, extract value out of thin air, Bitcoin mining isn’t as lucrative as it seems. Regular users hoping to use their regular computers to mine shouldn’t expect to just start making money by setting aside a few compute cycles to dig up Bitcoins. That’s generally reserved for special mining computers that do nothing BUT mine for Bitcoins using custom encryption processors.

As Biggs points out in his article, “While you could simply set a machine aside and have it run the algorithms endlessly, the energy cost and equipment deprecation will eventually cost more than the actual Bitcoins are worth.” That’s been confirmed by my colleague Matt Burns, who wrote in our internal message board that “after mining for a few days, the energy required to run my computer at full tilt was far greater than the Bitcoins I mined.”

Even if you do choose to pool your resources to mine, it’s a fairly complicated process, even for tech-savvy users. Check out the aforementioned article by Biggs for how he connected his home PCs into a Bitcoin-mining pool.

You May Also Like: