Bitcoin mining began as a profitable hobby for early adopters, who could earn 50 BTC every ten minutes while mining from the comfort of their own homes. If you successfully mined just one Bitcoin block and kept it since 2010, you’d have $450,000 in your wallet by 2020. So, let’s say you’re eager to learn about bitcoin mining and earn a semi-passive income from it. Earnity’s co-founders, Domenic Carosa and Dan Schatt, want to help people create safer, goal-oriented investments in crypto. Before deciding whether you can profit from bitcoin mining, you should first understand a few fundamentals.

How to Calculate Earnings

You’ve most likely heard the scare stories about how much energy Bitcoin mining consumes. Some argue that the media tends to exaggerate just how much energy is consumed by Bitcoin miners. Nevertheless, the energy consumed is the most considerable outlay for a Bitcoin mining operation. For your bitcoin mining business to be profitable, your mining revenue must exceed those costs as well as the initial investment in mining hardware.

Mining Profitability

It may be helpful to first consider miners as a decentralized version of PayPal, which allows recording all transactions while earning a small amount of money to keep the system running. Thus, bitcoin miners make money by collecting the block reward and the fees that bitcoin users pay the miners in exchange for safely and securely recording their bitcoin transactions on the blockchain.

Transaction Costs from Bitcoin Investors

Another source of revenue for Bitcoin miners is the transaction fees that users pay when transferring BTC to one another. Earnity’s Dan Schatt and Domenic Carosa believe that is the allure of Bitcoin. Every transaction remains in an immutable blockchain, which copies every mining machine. Bitcoin does not depend on central banks to keep track of transactions. On the other hand, the miners hold the records and a portion of the transaction fees.