Instructions explaining how to use the Advanced Options in our new Bitcoin mining profitability calculator in order to estimate cash flow for your mining operation.
There are dozens of Bitcoin mining profitability calculators out there that miners can use to make quick estimates about their margins. In fact, these mining tools have existed for almost as long as Bitcoin itself.
However, we’ve created a new profitability calculator which aims to provide far more customization for the many variables that go into a mining operation’s cash flow analysis. Namely, we enable users to set advanced variables such as monthly Bitcoin price and difficulty increments, capital expenditure (CAPEX) and ASIC hardware inventory values, asset appreciation or depreciation, additional fees and operating expenses, and more.
In this guide, we’ll explain how to use these advanced options to make detailed projections of your potential cash flow from Bitcoin mining. These cash flow visualizations can be particularly useful for pitch decks if you are raising funds or just for yourself to get a better idea of how to best reinvest past profits into newer hardware.
The basic version of our profitability calculator is what you’re likely already accustomed to seeing on other sites. The inputs are:
Bitcoin’s network difficulty has always increased significantly over long time periods, but the increase typically lags price increases because the time to manufacture and deploy new ASIC hardware is a bottleneck on difficulty growth.
Keep in mind that both of these increments are MONTHLY, meaning that the difficulty increment in the cash flow calculator accounts for a bit more than two actual Bitcoin difficulty adjustments each time. For difficulty to approximately double over the course of 1 year — as it has historically done in the last few years — the monthly difficulty increment should be set at about 6%.
Price is relatively harder to predict, so we recommend playing around with different bullish and bearish scenarios. For example, see what would happen by increasing price faster than difficulty (as occurs in bull markets) or increasing it slower than difficulty (as occurs in sideways movements or bear markets).
Once you put in your values for the inputs above, you’ll receive the following information about your operation:
But to really make the most of this tool, we recommend using the advanced options.
The advanced version of our mining profitability calculator gives you a much more sophisticated overview of how your mining business will perform in different scenarios. Let’s explain the custom options one-by-one.
Capital expenditures are costs you pay to acquire or upgrade your business’ assets. In Bitcoin mining, examples of CAPEX include:
If you have fixed monthly costs that are independent of your mining revenue, you can factor those in here. Examples of common OPEXs include:
Note that this should not include OPEX to run the miners, as that is calculated for you based on your power consumption and electricity price per kWh.
The Initial Hardware Value input should be the estimated resale value of any mining hardware (ASICs and PSUs) you own. Meanwhile, the Initial Infrastructure Value should be the market value of all your infrastructure such as containers, immersion cooling tanks and fluid, generators, etc.
These two inputs for monthly appreciation / depreciation allow you to change the value of your physical assets over time.
Historically, the value of ASIC hardware is highly dependent on Bitcoin’s price (and to a much lesser extent, the price of other SHA-256 coins including Bitcoin Cash and Bitcoin SV as well). At the same time, ASICs become less valuable when newer and more efficient models reach the market and the network difficulty increases. For instance, Antminer S9s that were originally selling for $2000 - $3000 in 2016 were available for $20 - $50 after the 2020 halving.
If you calculate mining cash flow for 6 - 12 months, BTC price should be a significant variable that determines the change in value of your hardware. On the other hand, increasing difficulty and newer ASICs hitting the market should be the main factors that contribute to depreciation over longer time periods.
The value of your infrastructure such as containers, buildings, land, etc. is likely less correlated with BTC price compared to ASIC hardware. That’s why we enable you to set a separate rate for appreciation and depreciation of infrastructure.
Most miners do not mine bitcoin purely to maximize their fiat profit in the short-term. Instead, it’s very common for miners to hold at least some portion of their profits in BTC on their balance sheet, giving them exposure to potential price appreciation. With this in mind, we created the HODL Ratio as a way for users to determine a percentage of their net profit each month they want to keep in BTC rather than cashing it out. If you set a nonzero value for Price Increment in the basic inputs, the HODL Ratio will impact your End Profit/Loss as the value of BTC on your balance sheet will appreciate or depreciate in fiat terms over time.
To illustrate this, below is a chart with all of the inputs exactly the same as the one posted most recently above. The only difference is that the first had a HODL Ratio of 0%, and this one has a HODL Ratio of 100% (aka a MicroStrategy Treasury Policy).
For a much deeper overview of different strategies for treasury management, we strongly recommend that you read The Intelligent Bitcoin Miner by Anicca Research.
If you set a nonzero Discount Rate, it will not impact the stats or the data series on the chart. However, we calculate NPV (Net Present Value) in the backend, and we print this value in the CSV file which you can download (see the Download CSV text right above the stats.)
In Discounted Cash Flow Analysis, the Discount Rate is an interest rate used to determine the present value of future cash flows.
Finally, we’ll leave you with an example of how you can use the Braiins mining cash flow calculator to visualize projections for multiple different scenarios for BTC price action in the future. Whether you want to present financial projections to prospective investors or just inform yourself in order to make better decisions when managing your business, this can aid you in that venture.
Since difficulty is increasing faster than price, the revenue and profit per month decreases when holding hashrate constant. This is also likely to result in Hardware Value depreciation, as the ASICs are becoming less profitable over time.
With price outpacing difficulty, the profitability of hashrate is increasing over time and the Hardware Value is depreciating much more slowly than in the previous case, leading to cumulative profit and net cash flow both accelerating upward each month.
Bitcoin mining software company: Slush Pool, Braiins OS+ & Stratum V2.
By miners, for miners.
پیشگام صنعت ماینینگ در شفافیت و نوآوری، دارای بیش از ۱/۲۵میلیون بیتکوین استخراج شده از سال ۲۰۱۰
افزایش هشریت در دستگاههای سری S9 به بیشتر از 17TH/s, بهبود بهره وری تا 20%, و دریافت 50% کارمزد استخر پایین تر در استخر Slush Pool
فریمور پیشرو در پیادهسازی پروتکل Stratum V2 و توسعه نرم افزار ماینینگ از پایه به زبان Rust
بهبود کیفیت از جمله کاهش بار داده ، حذف بلوک خالی ، پیشگیری از ربودن هشریت ، و بیشتر.