Bitcoin is mined extensively before 2017 only by the individuals or organisations who believed bitcoin has a potential as a digital asset. But after a huge spike in bitcoin price in 2017, bitcoin mining has became more profitable than ever. Graphic processors are specifically modified to mine bitcoin, ASICs also known as Application Specific Integrated Circuits came into existence. These ASICs are efficient processors and consume low electricity than the conventional graphic cards.
When bitcoin was invented in 2009, Satoshi Nakamoto mined the first block, the genesis block on his personal computer. The mining difficulty was 1, but now it is more than 14.7 trillion, as bitcoin gained more popularity, more people entered the game and advanced mining software was created. The people who mined bitcoin early in 2012-14, mined on their personal setups, the cost for aquiring being very very low. After that mining pools and private bitcoin miners came into existence with huge mining rigs and with massive computing power. With increase in hashrate of the bitcoin network, difficulty has also been increasing. Initially individual miners were used to compete with other individual miners, but due to mining pools and increased difficulty, individuals were not able to gain profits and thrown out of the game.
What factors are to be considered for mining hardware?
1)Hash rate - No. of hashes per second, more the hash rate, easier to generate new bitcoin.
2)Efficiency - Performance w.r.t consumption of electricity
3)Price - Price of the miner is the important factor to be considered. Asic miners cost anywhere around from $1000 to $15000. Higher the initial investment, greater the return.
WHAT ABOUT MINING BITCOIN NOW?
GPUs cannot mine bitcoins now due to the increased difficulty of the bitcoin network. Hash rate of asics will be around 5-20 TH/s with average electricity consumption of 1000 watts per day. This makes mining not profitable at all and it would take few months to recover the initial investment made on purchasing the miners(at the current price of Bitcoin($9000)). If you have got free electricity, you can mine bitcoins somewhat profitably. But if you consider the long term prospects of bitcoin and believe bitcoin can go even higher to $100k, then you can mine bitcoin without any hassle.
However, due to coronavirus, the bitcoin price has fallen, hash rates on the bitcoin network has seen new lows. Many mines have been shut down due to the pandemic. With Bitcoin Halving to happen on May 12 and prices being low, miners won't be motivated to mine bitcoin as of now.
But considering the facts, of what happened during the previous halvings and a year after the halving, if a miner considers a long term prospective rather than to mine and sell bitcoins, he would be way more profitable in the first way.
As the price of bitcoin at 7300$(at the time of writing this article), a successful miner who finds a hash is rewarded with 12.5 bitcoins which is approximately 91,036$, which may vary as bitcoin swings.
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