Bitcoin difficulty increase calculator

A Bitcoin miner is rewarded for his efforts within the entire network. However, the number of miners is constantly increasing, which is proportionately reducing the benefits available to them. The profitability of the mining procedure primarily depends on various factors. These include the electricity cost, the hashing power of the rigs, current and future value of the coins, upfront costs of setting up a rig, and the total network hashing power and current difficulty.

Long-term predictions

The above mentioned factors make predicting the profits in the longer term almost impossible. It is nearly impossible to guess the number of new miners who will join the network over the coming weeks or months and how this number will affect the difficulty. Although, you may have a fairly accurate idea on how well your mining rig can compete within the overall hashing power available in the network in the next few weeks, the new ASIC developments can possibly render an inefficient miner redundant in the medium time period.

Another factor that makes long-term profitability predictions impossible is the lack of any assurance that the value of the bitcoins will continue to remain constant or increase. Speculators and increasing regulatory control continuously encourages miners in and out of the marketplace. While the overall forecast is of an increase in the acceptability of these coins, major developments can significantly impact the price drastically.

Calculating the expenditure

It is very simple for a Bitcoin miner to calculate his or her mining expenditure. The total cost is simply the total of the cost of the rig and the electricity cost required to run the rig. Although, you will be running the rig twenty-four hours per day all seven days a week, the electricity cost will most likely be a fraction of the cost of the rig especially in the shorter duration. The next step is to calculate the number of bitcoins you will most likely earn based on your rig’s hash rate at the current difficulty and the time taken to break even at the current price of the currency. Unless you run a very powerful rig, you will need to join a mining pool, which is another cost you will need to include in your calculation. If you find that your rig is unable to realistically pay its expenditure at current prices, you will need to decide if you are comfortable holding the earned coins essentially by speculating on the future price movement.