Bitcoin mining is 10,000x less Profitable than Micro-mining

With the price of Bitcoin surging this year, mining bitcoin has suddenly started to generate more revenue than extracting gold from the Earth.

What if there was something similar, but vastly more profitable?

Bitcoin mining economics

According to at least one person who tried mining on AWS (see this article), it would appear that using a c5n.xlarge instance is best and buys you about 1,635 hashes per second at a cost of around 4 cents per hour. At the current Bitcoin price of 50,000 that doesn’t cut it, sadly. You’ll make about 13c for every dollar you pay to AWS.

Crawling economics

Don’t quote me on this, but I estimate that the revenue from doing this is ten thousand times what you will receive from mining bitcoin, plus or minus one order of magnitude.

Relative economics of microprediction “mining” versus bitcoin mining

I don’t suppose that will last forever. This extraordinary ratio is held up by the absurd pride of data scientists who are too proud to simply run a model that was created by someone else (or maybe they didn’t notice the CODE badges) on the leaderboards.

Sometimes this 10,000:1 ratio to bitcoin economics surges even higher. For example, a clone of Yex Cheetah’s could be expected to earn roughly $100 today alone (in expectation) because there is $500 on the line.

You can follow the instructions here, should you wish to take advantage of this temporary arbitrage. Over time, it might go away as other algorithms get smarter — at which point it starts to look more like proof of prescience than proof of stake — but that’s a bridge to cross.

Oh, and if you want the economics to be even better, consider clapping, following, or sharing. Ta.

Chief Data Scientist, Intech Investments