You don't think Bitcoin mining is just about turning on a computer and launching the Bitcoin program to earn Bitcoin, do you?
Let's assume individuals participate in Bitcoin mining, and calculate the thresholds and investment returns. The first step is to purchase a mining machine. The currently available Bitcoin mining machine is the Bitcoin Miner S21 XP Hyd, developed and manufactured by Bitmain.
The power of a Bitcoin mining machine is 5676W, which is about 5.6 kWh per hour, with a computing power of 437TH, and the price is equivalent to 103,000 yuan per unit. If the electricity cost is calculated at 0.4 yuan/kWh for household use, it would need to run continuously for 24 hours, taking 1166 days to break even, which is about 3 years.
Even with Inner Mongolia's cloud computing policy of 0.23 yuan/kWh, it would take 924 days to break even.
Of course, this mining machine is currently hard to buy, and the mainstream mining equipment is likely still from the previous generation or even the generation before that. The mining industry is not as simple as everyone thinks; just setting up a few computers does not mean you can mine.
Although it seems that investing 103,000 yuan takes a long time to break even, which is a bit unprofitable, you should know that if Bitcoin's price rises, it can be quite terrifying. If the market is good, you might break even in half a year.
This is also why countless mining farms are willing to continuously upgrade their equipment, and mining machine manufacturers are eager to develop new devices. Constantly pushing the limits of mining machine performance and researching new mining chips is not something small workshops can accomplish.
In addition to mining machines, you also need to secure a site, especially a large power input. This leads us to the social connections; having good relationships helps with the process. It's not just about electricity, but also requires approvals from environmental assessments and other departments to start building the mining site. The era of Bitcoin mining is no longer something individuals can participate in. Without significant capital, over 100 million yuan in strength, the money involved is not enough to maintain social connections. Moreover, mining is not allowed in mainland China (although there is still 0.3% of computing power deployed).
The chart below shows the difficulty of Bitcoin mining. Looking back from now, in September 2017, China banned digital currencies and subsequently prohibited the national mining industry. The growth of Bitcoin's computing power has not been significantly affected; decentralization originally means to go 'de-' (just a joke).
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