Three questions before you buy a miner

Most miner comparisons start with terahash. It is the number printed on the box, it is the number every reseller leads with, and on its own it tells you almost nothing about whether a machine will make money.

Terahash decides your share of what the network pays out. It does not decide what that payout is worth, what it costs you to earn it, or how quickly your share shrinks. Those are three separate questions, and they are the ones worth asking first.

1. What does the power cost, and who is exposed to it moving?

Electricity is the whole game. A machine at 5 cents and the same machine at 9 cents are different businesses, and the gap widens every month the machine runs.

The thing to work out is not just the rate but who carries the risk if it changes:

• A fixed rate moves the risk to whoever sold it to you, and you pay for that in the rate.
• A floating rate is usually cheaper and leaves the risk with you.
• A prepaid discount fixes what you save, not what you pay, if the underlying rate floats.

A quoted rate means nothing until you know whether it includes cooling, network, and hands on site. An energy-only rate with fees on top can beat an all-in rate, or lose to it badly.

2. How fast is difficulty growing?

Your machine's output falls every time the network adds hashrate, whether or not you do anything. Two machines with identical specs bought a year apart earn very differently, because the second one starts further down the curve.

This is the number people leave at zero when they model a purchase, and it is the single assumption most likely to turn a projection into fiction. Run it pessimistically at least once.

3. What happens at the end?

A miner is equipment, and equipment has an end. Three things happen there and all of them are worth a number:

1. It stops being economic before it stops working. The date it becomes unprofitable is not the date it breaks.
2. It has a salvage value, which is rarely zero and rarely much.
3. Owning it may have had tax consequences that owning bitcoin would not have had.

That third one is genuinely different from buying the coin, and it is specific enough that it gets its own page rather than a paragraph here.

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So is a machine better than just buying bitcoin?

Sometimes. It depends entirely on the three answers above, and anybody who gives you a single number without asking for them is selling you something.

The honest version: mining wins when bitcoin appreciates and you are buying cheap power, and loses to simply holding when the price is flat and difficulty keeps climbing. Where the crossover falls is arithmetic, not opinion, so we would rather you did the arithmetic.

Put your own assumptions in the calculator — power price, difficulty growth, horizon, and your own tax rates. It plots what a fleet does against buying the same dollars of bitcoin on day one, and tells you which period the two cross over in, if they do.