Is Bitcoin lottery mining worth it?

The break-even sums

Illustration with a network near 966 EH/s and bitcoin near $85,000. Use the calculator for today's numbers.

Electricity decides it

At $0.05 per kWh, a Bitaxe's yearly electricity is about $8, and its expected income of about $18 is above that: a small positive average, before hardware. At $0.30 per kWh the cost doubles to about $47. In the end, small amounts: the real "price of the ticket" is a few dollars a month. If your power is free, for example surplus from solar, the economics change, though the odds remain tiny.

Why bigger miners do not fix it

A larger ASIC miner has far better odds, but costs far more to run and to buy. Expected income and electricity scale together, and ASIC efficiency determines whether the margin is positive. In recent years, the margin for individual miners buying hardware at retail has been thin or negative, and difficulty increases erode it further. Industrial miners with cheap power and bulk hardware are the ones with an edge.

When it makes sense

• You enjoy tinkering with hardware, firmware and the open-source community.
• You think of the electricity as the price of a lottery ticket.
• You have cheap or free power.
• You can afford the hardware cost and the loss without stress.

When it does not

• You expect steady income.
• You are buying because of stories of winners.
• You are using money you cannot afford to lose.
• You are tempted by "cloud mining" or apps that promise returns.

Alternatives

If you want the chance of a big prize, a weekly lottery has a very different shape: a fixed $5 ticket, much smaller prizes, far better odds and no electricity bill. If you want exposure to bitcoin, you can buy it directly, with price risk. Each has its own costs and risks, and none is guaranteed.

A budget approach

If you decide to try, set a total budget for hardware and a year of electricity, say $150 in total, and treat it exactly as you would a lottery budget. If the amount is easy to lose, that is a sign the decision fits. If it is money you need, do not do it. Keep a note of what you have spent and review after a year.

Three owner profiles

The curious tinkerer buys a NerdMiner for under $40, enjoys setting it up, spends about a dollar a year on electricity and never expects a block: worth it as a hobby. The long-shot player buys a Bitaxe, spends about $25 a year on electricity plus $100 on hardware, hopes for the one-in-a-million-per-day chance and treats it as a lottery ticket: worth it only if the cost is a comfortable entertainment budget. The would-be earner buys an ASIC miner expecting income, discovers that electricity and hardware cost more than the expected rewards and loses money: not worth it. Knowing which of these you are is most of the decision.

Questions to ask before buying

1. 1How much will I spend in total over a year, including electricity?
2. 2Would I be happy to lose that amount completely?
3. 3Do I understand that the chance of a block is tiny and income is likely zero?
4. 4Where will it run, and is it safe to leave powered?
5. 5Is my electricity price low enough that the running cost is small?