How to Calculate Bitcoin Mining Profitability (Step-by-Step Formula)
Mining calculators can feel like black boxes. The underlying math is actually simple once you understand the units. This guide walks through every step so you can check any calculator — including ours — by hand.
Step 1: Your share of the network
Your expected share of block rewards equals your hashrate divided by the total network hashrate. Make sure both use the same units.
| Unit | Hashes per second |
|---|---|
| TH/s (terahash) | 10¹² |
| PH/s (petahash) | 10¹⁵ |
| EH/s (exahash) | 10¹⁸ |
| ZH/s (zettahash) | 10²¹ |
Example: 200 TH/s ÷ 1,000 EH/s = (200 × 10¹²) ÷ (1,000 × 10¹⁸) = 2 × 10⁻⁷.
Run your own numbers with the free calculator: Bitcoin Mining Calculator
Open calculator →Step 2: Daily BTC rewards
The network targets one block every 10 minutes, which is 144 blocks per day. Each block pays the subsidy plus fees.
BTC per day = Share × 144 × (subsidy + average fees per block) × (1 − pool fee)
With a 3.125 BTC subsidy, 0.03 BTC of fees and a 2% pool fee:
2 × 10⁻⁷ × 144 × 3.155 × 0.98 = 0.0000890 BTC per day
Step 3: Daily revenue
Revenue = BTC per day × BTC price
At $100,000 per BTC: 0.0000890 × 100,000 = $8.90 per day
Step 4: Electricity cost
Convert watts to kilowatts and multiply by 24 hours and your price per kWh:
Daily cost = (Watts ÷ 1,000) × 24 × price per kWh
A 3,500 W machine at $0.08/kWh: 3.5 × 24 × 0.08 = $6.72 per day
Step 5: Profit
Daily profit = Revenue − Electricity cost = $8.90 − $6.72 = $2.18 per day
Monthly: about $66. Yearly: about $796.
Step 6: Break-even calculations
Break-even electricity price = Daily revenue ÷ Daily kWh
$8.90 ÷ 84 kWh = $0.106 per kWh
Break-even BTC price = Daily electricity cost ÷ BTC per day
$6.72 ÷ 0.0000890 = about $75,500
If Bitcoin falls below that level, this machine loses money at $0.08/kWh, assuming the network hashrate stays the same.
Hardware payback (days) = Machine cost ÷ Daily profit
A $3,500 machine earning $2.18 a day takes about 1,600 days — over four years — to pay back, and only if nothing changes.
Efficiency in J/TH
Efficiency = Watts ÷ TH/s
3,500 W ÷ 200 TH/s = 17.5 J/TH. The lower this number, the cheaper each terahash is to run.
What changes over time
- Network hashrate generally rises, shrinking your share. Bitcoin adjusts its mining difficulty every 2,016 blocks (about two weeks) to keep blocks near 10 minutes. See mining difficulty explained.
- Transaction fees fluctuate with network demand.
- The subsidy halves every 210,000 blocks, about every four years.
- Bitcoin's price can move revenue by 20% in a week.
Because of these, a payback estimate based on today's numbers is usually optimistic.
Let the calculator do it
The Bitcoin mining calculator runs exactly this formula with the live network hashrate and BTC price, and shows every intermediate number so you can verify it.
CryptoMathly provides educational estimates only and is not financial, investment or tax advice. Crypto assets are volatile and you can lose money. Always verify figures with a qualified professional.