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Why you should NOT invest in BTC mining

  • Have you ever wondered why enormous amount of money is wasted on BTC mining enterprises which are not profitable?
  • Is it reasonable that Venture Capital firms invest in BTC mining endeavours?
  • Are you really satisfied with your BTC mining investments?

Answers to these questions can be found in our recent report titled Why you should not invest in mining endeavour? The efficiency of BTC mining under current market conditions.

The main aim of our research is to analyse the efficiency of BTC mining under current market conditions. After thorough analysis of initial assumptions concerning:

  1. the price of mining machine and its effective amortization period,
  2. difficulty and hash rate of BTC network,
  3. BTC transaction fees, and
  4. energy costs

we have found that currently BTC mining is not profitable, except for some rare cases.

The main reason of this phenomenon is the fast and unpredictable increase of difficulty of BTC network over time which results in decreasing participation of our mining machines in BTC network hash rate. The research is augmented with detailed sensitivity analysis of mining efficiency to initial parameters assumptions, which allows to observe that the conditions for BTC mining to be efficient and profitable are very challenging to meet.

The project has been prepared jointly by Labyrinth HF project, Circus Consulting Group and QFRG Group.

Short clip presenting results of our research is available under link.

Full text of the paper is available here, while the presentation can be downloaded here.