The economics of mining Bitcoin

Cryptocurrency has been getting a lot of attention in mainstream media lately, leading to a large influx of people wanting to get in on the action. As a co-founder of a cryptocurrency index fund, a blockchain developer and a Bitcoin miner, I have a little advice for those folks who are new to the scene and want to ride Bitcoin’s coattails. I’m purposely targeting Bitcoin mining, ignoring other — possibly more profitable or easy to mine —currencies. However, most of the challenges and calculations I’m introducing in this article will apply to altcoins as well.