4 Things to Consider When Mining Bitcoins

People get profit from Bitcoin by either buying it or mining it. Buying Bitcoin works like regular investment activity. Buyers buy Bitcoin, hold it and sell it to gain profit. Bitcoin mining, on the other hand, is less complicated and intended to be done by hardcore Bitcoin enthusiasts. Bitcoin mining basically requires you to have a powerful hardware device (a miner), to solve problem and to generate Block reward. You get profit from this reward. In order to mine Bitcoin effectively, you should take the following four factors into consideration.
Hardware
To start mining Bitcoins, you need to use an ASIC hardware device that is specifically used for mining. This hardware device is called miner. Different miners have different performance, which is represented by its Hash Rate, with unit that ranges from Mega Hash per second (MH/s) to Peta Hash per second (PH/s). Hash is the problem that the miner must solve. The better the miner’s performance, the quicker it can solve hashes. Network’s overall Hash Rate increases as more miners join the network.
Electricity
Your operational cost includes not only the initial cost to buy an ASIC device, but also electricity cost that you have to pay every month. ASIC hardware consumes a large amount of electricity. It is normal to see electricity bill that spikes after you use the device. What is important is that you need to calculate the rate of your electricity cost increase because this calculation ultimately determines how much profit that you can generate.
Difficulty
As more miners join the network, its Hash Rate increases. To make sure that the amount of Bitcoins produced every 10 minutes is constant, the required problems to be solved must also increase in difficulty. Bitcoin difficulty is represented by a long number that constantly changes. You should take this number into consideration because the more miners join a network, the more difficult the problem that needs to be solved will be.
Profitability
As long as your miner remains in operation, more and more Bitcoins will be produced. To find out whether you have made profit from its operation, you should set a time frame and make calculation about how much Bitcoins that you earn and how much cost (electricity, etc.) that you have to pay. You are making profit if the former is greater than the latter. Online Bitcoin mining calculator is widely available online, so it has been easier today for you to decide whether your mining activity is making profit.