Thread by @JohnCantrell97

You probably saw the news this week that two people have solo mined a Bitcoin block and earned 6.25 BTC worth over $250,000. You’re probably wondering

What is solo mining?
How much does it cost?
What are the odds?
Should you be mining?

Let me break it down for you 👇

Solo mining is exactly what it sounds like. It’s what you probably think of when you think of mining. It means someone is mining all by themselves.

So why is it explicitly called out as “solo mining”? It’s because the norm these days is to mine as part of a pool.

What is a mining pool? Well as more and more people mine it becomes harder and harder to mine a block by yourself.

This means the time it takes for you to find a block is also increasing. In order to generate a steady stream of revenue miners often pool together.

This means everyone in the pool contributes their hash rate and when the pool finds a block they can split the revenue proportionally based on how much hash rate you contributed.

This reduces the variance in your revenue, allowing you to generate it more evenly over time.

The two solo miners both had a little over 110 TH/s of mining power. That means they can calculate 120 trillion hashes per second.

Miners are searching for a hash that is below the current hash target. For a refresher on mining, see my earlier thread:

https://twitter.com/JohnCantrell97/status/1480233613547483138

So how much does 110 TH/s of mining equipment cost? This is roughly how much power a single Antminer S19 Pro has.

The price fluctuates with demand but will cost you roughly $12,000 USD. We need to factor in the cost of electricity as well because it uses 3250W of electricity.

The price of electricity varies all over the world but in the US this would cost you roughly $10/day to run. So the total cost is roughly $12,000 + $10 per day it takes you to find a block.

So how long on average will it take you to find a block solo mining with this S19 Pro?

Based on the current difficulty it is expected to take roughly 104,669,950,140 trillion hashes to find a block.

If our miner can perform 110 trillion hashes per second this means we will be able to perform 66,000 trillion hashes in the 10 minutes we have to find a block.

This means we have roughly a 0.00006% percent chance to find the block before we expect someone else to.

It also means it will take us roughly 951,545,001 seconds or about 30 years to find a block on average. The odds aren’t so great, those miners got so lucky!

This means the expected cost to solo mine a block is $12,000 + ($10 * 365 * 30) = $121,500.

This is less than the $250,000 you will earn!

Of course this depends on the hashrate,price of electricity, and price of Bitcoin remaining constant for 30 years.

So should you mine?

Well if your intent is to be profitable then you should probably join a pool. Mining solo you can expect to earn $0 almost every day for 30 years until you maybe find a block.

If you join a pool you can expect to generate roughly $28 per day.

If we subtract the electricity cost then you will profit almost $20/day!

So how long will it take to pay off the $12,000 the mining equipment cost?

Roughly 600 days!

That’s a long time.

Also, the amount you make daily will drop each day as more miners join the network.

So if you should mine really depends on your risk appetite. You need to be able to acquire the equipment, have a low electricity cost, and be willing to wait for a return on your investment.

It’s often a better investment to just buy BTC directly.

A huge benefit of mining is that it’s a way to acquire Bitcoin without having to provide anyone with personal identifying information.

It’s one of the only ways to acquire Bitcoin in a truly private way.

I hope this helped you understand what solo mining is and just how lucky those miners were.

I hope it also helped you understand a little bit more about the costs and potential profitability of mining.

Follow me for more daily education about Bitcoin!

There’s a typo in that 5th tweet. A 110TH/s is 110 trillion hashes per second 😅sorry for any confusion!