Modeling of Bitcoin mining return projections requires one to consider two factors; namely growth of global hashrate and price of the cryptocurrency with respect to the base currency. Before doing that, let’s ascertain how many miners the market see in 2018?
Bitmain, a Chinese privately owned multi national semiconductor company controls 70 percent of the market for Bitcoin mining rigs. It also has a higher percentage in some coins according to the Miner’s Union website.
According to information shared by Bitmain to analysts by its Taiwan Semiconductor Manufacturing or TSCM unit, the level of Q3/Q4 (last year) production of miners was around 10,000 wafers per month. The Miner’s Union estimate that one wafer supports 27-30 units at 189 chips each.
100,000 new units were put online in the month of December. At 16 exahash, and assuming everyone is using 14 TH/s Antminer S9s, that puts it to around 1.1 million units in total.
The Miner’s Union
Bitman is planning to produce about 400,000 – 600,000 new units per month in Q1 according to The Miner’s Union. Bitcoin mining earned miners about $800 per month profits in December without considering costs, says the same source.
Moving on to 2018 projections. Two factors would play to affect this profitability in Bitcoin mining; namely drop in Bitcoin price and substantial increase in hash power. Hash power would need to drop by 100% in order to cut profitability down to $400 per month — which would come in if there is addition of 1.1 million 14 TH/s S9s.
If 500,000 units are added per month, daily mining rewards would drop by 0.00025 BTC (.25 mBTC) per day, which is about $3.75 at the price of $15,000 a Bitcoin.
An S9 would be expected to produce 0.2 bitcoin and there is no chance that the price will drop much lower because demand will likely increase if indeed 500,000 new units must be used every month.
So in short, Bitcoin mining will be a very profitable venture in 2018.