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Mining Calculator: How Much $ You Can Make Mining Bitcoin Where You Live

A free video tutorial from Chris Haroun
CEO of Haroun MBA Degree Program®
Rating: 4.5 out of 5Instructor rating
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(A+B) Mining Calculator: How Much $ You Can Make Mining Bitcoin Where You Live

Learn more from the full course

The Complete Cryptocurrency Course: More than 5 Courses in 1

Learn everything you need to know about cryptocurrency and blockchain, including investing, mining and much more!

23:57:51 of on-demand video • Updated August 2022

Upon completion of this course, students will be able to invest, mine, trade and thoroughly understand cryptocurrencies
Understand what makes a great cryptocurrency as a great long term investment
Understand what are the biggest mistakes new investors make in cryptocurrencies?
Know how to watch out for scams and managing risk
Learn tools to be able to identify the next great cryptocurrency (what to look for & watch out for)
Learn how to read charts
How to buy Bitcoin
How to mine Bitcoin
Understand the pros and cons of Bitcoin
How to buy Ethereum
How to mine Ethereum
Understand the pros and cons of Ethereum
How to buy Ripple
Understand the pros and cons of Ripple
How to buy Litecoin
How to mine Litecoin
Understand the pros and cons of Litecoin
How to buy Monero
How to mine Monero
Understand the pros and cons of Monero
How to buy Zcash
How to mine Zcash
Understand the pros and cons of Zcash
How to buy Dash
How to mine Dash
Understand the pros and cons of Dash
How to buy NEO
How to mine NEO
Understand the pros and cons of NEO
How to buy Cardano
Understand the pros and cons of Cardano
How to buy Stellar
Understand the pros and cons of Stellar
Know what makes a great cryptocurrency wallet
How to get QR Code Wallets + how to use them +how to transfer money out of them
Understand the pros and cons of QR Code Wallets
How to get USB Wallets + how to use them (Trezor, Ledger Nano S, DigitalBitBox & KeepKey) +how to transfer money out of them
Understand the pros and cons of USB Wallets (Trezor, Ledger Nano S, DigitalBitBox & KeepKey)
How to get a Coinbase wallet + how to use it +how to transfer money out of this wallet
Understand the pros and cons of Coinbase Wallets
How to get an Electrum Wallet + how to use it +how to transfer money out of this wallet
Understand the pros and cons of Electrum Wallets
How to get a Blockchain Wallet + how to use it +how to transfer money out of this wallet
Understand the pros and cons of Blockchain Wallets
Know what makes a great cryptocurrency exchange (what to look for from researching an exchange)
How to use GDAX ("Coinbase Pro")
Understand the pros and cons of GDAX ("Coinbase Pro")
How to use Poloniex
Understand the pros and cons of Poloniex
How to use Kraken
Understand the pros and cons of Kraken
How to use Bittrex
Understand the pros and cons of Bittrex
How to use Gemini
Understand the pros and cons of Gemini
How to use Binance
Understand the pros and cons of Binance
What makes a great ICO...meaning Initial Currency Offering (what to look for from researching an ICO)
What are many great cryptocurrency online resources and how to use them (if applicable)
How to create a diversified cryptocurrency portfolio
Understand what % of your net worth should you consider investing in cryptocurrencies?
....and much much more....
English [Auto]
Before watching this lecture, please make sure that you have watched the mining lectures in part 1.3 of the course. Thanks. Now, in order to find async machines for mining bitcoin, a Chinese company called Bitmain is a good source for reliable async machines. Bitmain makes the bitcoin async miner called ant miner. But how do we know? What am I are machine to purchase? Well, if we go to shop bitmain using our resource link section here. And since we know from part one of the course that SHA256 is our algorithm and we select Bitcoin miners. And now let's pick this one here called Antminer V9 for Tera hashes per second. You can buy it here or on Amazon as I did. And the prices do change a lot, just like how they do for external hard drives. As you can see on this Bitmain website, they also have async machines for many different types of coins. We will stick with the basic antminer for bitcoin and we will use the PC parts and the PC we made earlier in the course in these lectures here to mine other coins in their respective parts here in part two, if applicable in the course. So if you order an antminer, please make sure to also order a power supply unit also called a PSU power supply unit. You need to order the PSU with the AMP minor or what you can do is you can order a separate power supply unit from Amazon or another website, but please make sure that it is able to output as much wattage as your miner is going to use. And just like how you never use a plug for one product, do you have your home with a plug for another product? Just be really careful with PSU and just make sure you always order the right one. And if you're not sure and I care about safety, that's why I mention this. But if you're not sure, then just buy the PSU with the AMP minor, even if it costs you a little bit more money just to be safe. Also, please always have a fire extinguisher close by when you run these products, just in case. I'm always that way with all computers. Better safe than sorry I ordered my amp minor and power supply and power supply cord from Amazon and the prices always drop over time. It's kind of like buying a car. So let's go to a website now called Coin Wars dot com and we'll get it from our menu up here and we'll go to Cornwall dot com in order to calculate how much money we can make buying Bitcoin, if any, based on the cost of electricity where you live. Coin Wars is an amazing website. What we're going to do is we're going to use this website in this course and other sites too, but we're gonna use this website to help us calculate how much money we can make, if any mining. And we're use this website not just for Bitcoin but for other cryptos later. So once you're on Coin Wars dot com, go to mining calculators and scroll down and click on bitcoin. This will help us understand if we should even buy the equipment. And we need to find out what the hash rate is of the machine, the async machine we're using to mine Bitcoin. We all seem to find out the power, meaning the what's. And I'll explain all this in more detail soon. Okay. Now, where do we get the information? What we have to do is we have to go back to the Bitmain website and just scroll down and find out what the hashrate is and the power meaning what's of the the Bitcoin basic mining machine that we purchased. And I'm going to show you in the next lecture how to configure the whole thing and get it up and running. Okay. So let's let's go and get the details now from the Bitmain website on the machine that we bought so we can enter it in here into Coin Wars. And this information changes constantly on the Coin Wars website. But if we select antminer V9 at four TERA hashes per second, which is the same thing as 4000 giga hashes per second. So hashes per second tells you how fast the miner mines. So hashes goes from the low end of hashes per second of h per second. That's hashes per second. Then you have k per second, that's kilo hashes per second which is written k slash us. Then you have mega hashes written as mh. S, that's mega hashes per second. And then you have giga hashes per second, which is often written as G. S, and then you can have tera hashes per second, which is written as rtf s. Okay. Now we enter in the Watts of the AMP minor at 1027, which we also got from the Bitmain website. I typed 1024. That's close enough to 1027. Next up, we enter in the power cost in kilowatt hour format, which has a symbol KW. This is how much money your electricity company charges you for electricity. And this can vary a lot based on where you live, of course. A kilowatt hour, meaning KW, is a measure of how much energy you are using. It doesn't mean the number of kilowatts you're using per hour. It just means a unit of measurement that equals the amount of energy you would use if you kept a 1000 watt appliance running for an hour. For example, a 100 watt light bulb would take 10 hours to use one kilowatt per hour. Because one kilometer is 1000 watts and 1000 divided by 100 watts is 10 hours. Now, in the state of California, where I live, it's ridiculous how expensive electricity is at a cost of $0.14 per kilowatt hour here, and it's actually closer to $0.20 per hour for people in certain areas of California. And what I'm going to do is I'm going to give you details on all states and many countries in a minute. And you can calculate the cost of having this light bulb on where you live, that hunter Watt light bulb. And and I'm going to break this down in easy to understand terms so we know how much it will cost us to mine based on where you live. Now this is a 1000 watt light bulb. And I ordered this from Amazon. And this one here is a 100 watt light bulb that you probably have at your house in your lamp. Now, this 1000 watt light bulb is used by people that grow stuff that is actually now legal in the state of California. I did not inhale Mr. Clinton. Just kidding. I don't I don't use that stuff. But this this light bulb here is really bright. And since it's a 1000 watt light bulb, that means that it costs me $0.14 per hour to use this bulb. Why? Because in California, where I live, at least it cost me $0.14 per kilowatt hour written as $0.14 per meaning. 1000 watts per hour for electricity. So if I left this 1000 watt light on for one hour, it would cost me $0.14 in electricity. And if I left this 1000 watt light bulb on for 10 hours per day, it would cost me a dollar 40 per day in electricity. And if I kept this light on for 10 hours per day for 365 days per year, it would cost me a dollar 40 times 365 days, which equals $511 per year. That's a lot. And that's actually more than 20 times what this 1000 watt light bulb costs, which is $23.95 here on Amazon. Now let's talk about my antminer that I bought the Watts for this Antminer is 1027 watts, which is almost the same lots as this 1000 watt light bulb. Why am I showing you this? Because I want to show you how the cost of electricity is more important to consider than the cost of the hardware you are going to consider using to mine cryptocurrencies. Kilowatts per hour or KW are usually as low as $0.08 in countries like China and India and as high as over $0.40 in countries like Denmark. Now we understand why a lot of mining occurs in China. Among other reasons. Now this 100 watt light bulb here would need to be on for 10 hours in order to use as much electricity as this 1000 watt light bulb here uses in one hour, which is dope. I mean, used for dope. Sorry. My kids also say that's lit. Okay, no more, Dad. Humor, I promise. Okay. This time I really promise. My kids think I'm like that guy Phil from that TV show Modern Family. All right. Moving on, Haroon, here we go. Now, I understand why my mom want us to use lower watt light bulbs growing up to save money because a 50 watt light bulb could stay on for 20 hours until it uses the same amount of electricity as a 100 watt light bulb did in 10 hours. You know, my mom would always ask me, Christopher, did you turn off the light in your room? Then for some reason she would always turn on the lights when I was watching TV, which drove me crazy. I love you, Mom. All right. Where I live, we get charged less for electricity use after 9:00 pm because the electricity company wants to incentivize people not to use electricity at the same time, which could stress the electricity grid. So what we do in my house is and Christine, my wife, she's amazing. She's so much better than I am at saving money. But she uses the dishwasher and then I use the dryer after 9 p.m.. Because of that, it all adds up. So please find out if this is the case where you live as well. If you consider mining, that is. Cool. So if it costs $0.14 per kilowatt hour in California for me and close to $0.20 for some people to run a 1000 watt product like this and minor for one hour or 100 watt light bulb like this one for 10 hours. What does it cost you where you live? We need to know this before you even consider spending a penny on mining equipment. I want to save you money. I don't want you to buy anything until you understand this place. So to find out, please click here in Part six and select the mining category. Remember, all the categories are sorted alphabetically and then select kilowatt hours prices globally. And these statistics are a little bit dated, they're a bit old, so please use this as just a guide and make sure to search for your country and state and even city name and kilowatt per hour or kw h in google to get the most recent prices. Or if you live in the United States, you can even click this link here called Kilowatt Hour Prices per US State. Now if you look at that US State link here, you will see how expensive it can be depending on where you live. For example, in Hawaii it can cost over $0.30 per kilowatt hour and it costs around $0.10 in Washington state, which is where Amazon.com is headquartered. And that's important for Amazon, too, because although they don't have all of their computers running in that state, they run a massive data center, many of them actually globally called Amazon Web Services. And the cost of electricity must be very low for them. And AWS or Amazon Web Services powers, many companies like Airbnb, etc.. I'm not going to go there. Sorry. Okay. So for more details on the kilowatt hour calculation or KW PH calculation, please see this link here. It's called kilowatt hours. Explain. Okay, cool. So you should now have an idea what electricity costs you in kilowatt hours or KW where you live so you can do the kilowatt hour calculations while I do them and find out what it would cost you, where you live to mine. And since the ant miner we are talking about uses one kilowatt or one KW, meaning 1000 watts per hour, we know that it would need that that we would need to keep a 100 watt light bulb on for 10 hours in order to use the same amount of electricity as Antminer would use in just one hour. Okay. I remember that that big light bulb here for for growing stuff. This is 1000 watts per hour, which is basically the same as the amp meter, which is 1027 OC. And remember we said if we kept that light bulb on for many hours per day, over a year is going to cost over 500 bucks in electricity. So think of it as being the same thing, roughly power usage for this amp minor versus this grow growing stuff. Light bulb. Okay, so these these ATM machines can cost you a ton to run an electricity, which is why a lot of people and a lot of companies, if they get electricity included in their monthly rent, they mine a lot unless the landlord sees the bill and freaks out. And and I'm sure that a lot of college students might in their dorm rooms. And if you do that, then please, please have a fire extinguisher handy or close by. Great. We're making good progress here. So what does what we have discussed so far in this lecture, I mean, for you. Well, depending on where you live in the world, we can calculate right now what your break even point would be in using an antminer. We'll do break even stuff like this for making minor rigs later. Later in part two of the course, depending on what cryptocurrency you're thinking about mining. And so the foundations of what we're discussing right now when it comes to the cost of electricity and the cost of mining. We will use for the cost of mining with the machine we made. Let's assume in this example that you are in China or India now, and let's assume that the cost of mine is $0.08 per kilowatt hour. So let's enter that in the coin WorldCom calculator here. Then let's assume that the cost for us to use our miner as part of a pool with others is 1%. And this is how most people use ant miners as part of larger pools, where the fee is often about 1%. And I'll explain that soon in more detail. Let's just continue our earnings and break even discussion first. Next up, we have the current Bitcoin mining difficulty and I want you to please just leave this as is here with the current rate and this will change over time. Then there's the reward for mining, which will be lower in the long run. It started out at a lot higher 50. Then it got cut in half to 25. But for now, just leave it alone at the default of 12 and a half bitcoins as a reward for mining. And this will change automatically to as more bitcoins are mined. Okay. So we're almost done. Then I want you to leave the current Bitcoin per dollar rate as is here, and I promise you that the information will be different every time you try this exercise as the price for Bitcoin and some other items here does change a lot. One more step. The cost of electricity has already been entered by us. But we need to enter in one more thing, which is the cost of the hardware, the mining hardware, which in this case is about $400, including the power supply and the cost of shipping. The antminer on Amazon for me at least. And you can get it cheaper I'm sure now because again, prices always come down. Again, these prices continue to change. And it drove me nuts because every time I rerecorded this lesson, the prices kept going down. Okay, let's scroll down now and look at the results. So here's how many years it will take us to break even on this hardware investment. If we bought the ant miners in bulk, meaning many at a time, we would pay a lot less per units. And if we bought them use on eBay, they are cheaper, of course. And if we made them ourselves, if we had the expertise, the budget and the time, we would pay a lot less. And mining bitcoins is getting so incredibly competitive, and I don't recommend doing it unless your electricity costs are low or unless you can buy these machines in bulk and get a better price. Or if you want to do what Facebook and Amazon do with their data centers, which is they create many, many, many, many computers using cheap parts that they buy in bulk and they Velcro it all together in their massive data centers. And what they do is they try to locate these data centers in places where electricity is cheap. You'll notice that in the promotional trailer video for this course, I walk through a data center and actually I was in Prague recording that as it was cheaper to rent that data center there. Okay. Moving on. Okay, scroll down a bit more now and you can see that your annual profit will be this after paying for electricity and after paying the 1% mining fee. And yes, this will generate a profit here, but it will take years to pay it off in this example, which is why people like to run many mining machines at the same time and scale this to save money. Okay. So this entire example was using the favorable rates of $0.08 in China per kilowatt hour and India at $0.08 per kilowatt hour. Now, it makes sense why 81% of all Bitcoin pool miners mining, I should say, takes place in China. Look at this chart. Unbelievable. Just for fun, I want you to please change the numbers here. A lot to see what happens to the break even and profitability data. Also, please use a resources or websites that I mentioned in this lesson and enter in the cost of electricity based on where you live. In addition to using the resource that I provided you, I recommend using Google and doing your own search on the price per kilowatt hour or KW based on where you live, as this cost can change a lot depending on government policies, etc.. And to be really sure before you even consider ordering equipment for mining, please call your power or electricity company and ask them many questions about the cost per kilowatt hour where you live and if the cost changes for you. If you use a lot of electricity. And also ask them if the cost is lower at certain times of the day and if the cost is lower if you use solar and we have solar at my house as well. So it kind of keeps costs a little bit lower. A little off topic. Okay. So using coin wars, if you increase the price of bitcoin a lot just for fun, the breakeven time will be much shorter and the profits go up a lot. However, if the price of bitcoin goes goes up a massive amount, that is pure capitalism and the free market as a result will, will will come into play as more people will start mining. And what will happen is it'll make it much more difficult to mine when competing with others and the mining difficulty data field here will change. Okay. And this is why when the price of Bitcoin was way lower. Years ago, when I used to mind using cheaper computer parts, I didn't have to use an acid machine like this and miner, you know, I was able to use my computer in my home. And you'll see later on during part two of the course that the break even time for other cryptocurrencies is much lower than Bitcoin. And please use what you learn in this course when considering mining other cryptocurrencies not mentioned in this course if they can be mined at all. I want to I want to empower you and arm you with the right tools so that you can understand how to mine not just Bitcoin but other products as well. Before you spend a penny on this stuff. I want to save you money. So I'm still going to mine though, using this miner here in California just to show you how it's done. This is a good exercise because understanding this process will help you understand if you should buy async machines like this to mine other cryptocurrencies like the crypto async mining machines you see here at shop at bitcoin.com. Com. And this page will change for you, I promise you when you click on it in terms of the detail that I have and what you will have. And so what we just did in this lesson, we will do again when we calculate the cost of the mining PC that we made earlier in the course when we might other cryptocurrencies mentioned in part two of this course. Now in the next lesson we will set up this amp miner together. Thanks.