I want to know how I can calculate the profit of bitcoin mining in bitcoins. I am interested in the formula that is used by calculators. For example lets say I have 700mh/s hashrate, current difficulty is 908350862,437. The calculator says I will mine 0.00038755 BTC per day. What algorithm is used to calculate these figures?
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possible duplicate of How much Bitcoin will I mine right now with hardware X?– Murch ♦Commented Dec 12, 2013 at 21:32
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Check out this answer: bitcoin.stackexchange.com/a/135/5406– Murch ♦Commented Dec 12, 2013 at 21:33
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2 Answers
I want to give an extended answer as I found the pre-existing here or elsewhere in need of a bit more clarification, specifically for newcomers.
Formula
In order to calculate the approximated total bitcoin earnings value per month from a mining operation (not taking into consideration mining costs [electricity, hardware maintenance etc...]) the following formula can be used:
H = Hashrate (hashes / second)
D = Difficulty (Reference for values below)
B = Reward per Block (Reference for value below)
N = Number of days per month (default = 30)
S = Number of seconds per day (S = 60 * 60 * 24 = 86400)
Example
H = 21,990,232,555,520 h/s (~= 20TH/s)
D = 47,427,554,950.648
B = 25
N = 30
S = 86400
The total number of bitcoins earned per month as per the defined variables above will be ~6.995. Dismiss N from the numerator and you'll get the daily value.
Python
A quick python statement as an example implementation (you can type this directly in the terminal)
$ python -c "print (30*21990232555520*25*86400)/(47427554950.648*2**32)"
$ 6.99542703277
Some References:
Difficulty (Current Value | Wiki)
Reward per Block (Current and Future values)
The average time to find a block can be approximated by calculating:
time = difficulty * 2**32 / hashrate
Where difficulty is the current difficulty, hashrate is the number of hashes your miner calculates per second, and time is the average in seconds between the blocks you find.
Mining is a game of variance and luck. There are times that you could get lucky and generate more blocks than predicted and there will surely be dry spells when blocks do not occur. This can be seen by watching large mining pools as they solve blocks, blocks are not created on a set schedule by any means the network adjusts such that one block should be generated every 10 minutes, but we know that this will need to be adjusted regularly based on new miners coming online all the time. The network hashrate and thus the difficulty will be regularly changing.
