Mining is most profitable and safest way to invest in Bitcoin. Our production cost of 1 BTC is around $10,000. Much lower than the Bitcoin market price.
Mining has less volatility than BTC and we get high returns even when BTC price drops. There is a higher stability of NAV (Net Asset Value).
The correlation between the price of BTC and the difficulty of mining ensures the long-term profit stability in the event of BTC price drops. Depending on how many miners are competing, the difficulty (complexity of the miners’ work) will vary, and therefore the amount of electricity needed.
Miners’ efficiency matters more than power because it marks profitability and allows you to keep operations afloat in complicated times. This is why VentureBit invests in the most efficient computers. Inefficient computers cease to be profitable because the cost exceeds the reward, so lowering the price of BTC lowers the difficulty.
The reward for mining a block is reduced by half for every 210,000 blocks added (roughly every four years). The latest and third halving took place in May 2020.
While it will reduce the miners’ reward from 6.25 to 3.125 BTC, the miners’ profitability will depend on the price of BTC at the time of the halving.
- BTC price on halving day (2012): $12.35
- BTC price on halving day (2016): $650.53
- BTC price on halving day (2020): $8821.42
- Next halving is expected in 2024.
Transaction fees will pay miners for securing the network once the block subsidy expires.
All 21 million bitcoins will be mined by 2140. But more than 98% will be mined by 2030.
The halving is necessary. This is how Bitcoin controls its supply.
Bitcoin mining is mainly located in global regions where there are large, unused supplies of renewable electricity available, making Bitcoin mining greener than almost every other large-scale industry in the world.
Bitcoin’s energy use in many cases does not deprive anyone anywhere of energy, and it doesn’t increase their energy costs, because Bitcoin unlocks stranded energy assets.
Bitcoin’s energy use has and will continue to catalyse the exploitation of otherwise unviable, nongrid energy assets. These are sources of energy that wouldn’t otherwise be used.
VentureBit is commited to avoid the impact on the environment. Most of the electric power our facilities use comes from renewable energy sources.
BITCOIN MINING PROCESS EXPLAINED:
Miners bring computational power to solve the cryptographic problems needed to validate and include a new block of transactions on the Bitcoin blockchain, in exchange for being rewarded with new bitcoins and transfer fees:
- Users transact Bitcoins.
- Transactions are grouped into «blocks».
- Miners compete to solve a mathematical problem (hash).
- The network checks the validation of the new block that is added to the chain every 10 minutes.
- It is attached to the blockchain, which is Bitcoin’s ledger.
- Miners are rewarded with Bitcoins. Currently 6.25 BTC plus c. 5% transaction fees.
HOW POOLS WORK?
Miners can be grouped into «pools» to ensure more chances of solving a block outside of «luck». Rewards are distributed based on the work contributed. The higher the mining power provided (hash rate), the greater the prize.