Bitcoin – Are Nerdminer and BitAxe profitable?

Is the decentralization of the Bitcoin network about to improve thanks to minimalist miners such as Nerdminer and Bitaxe?

Bitcoin – a centralized industry

The decentralization of the Bitcoin network is a vast subject. On the one hand, there are the nodes, and on the other, the miners.

Unfortunately, hashrate is tending to consolidate in the hands of giants such as Marathon, Core Scientific and Riot.

American miners now account for over 40% of the world’s hashrate! What’s more, their facilities are mainly concentrated in Texas.

Even more worrying is the consolidation at pool level. These centralize the hashrate of numerous miners in order to smooth out profits. According to Braiins.com, the Foundry USA pool accounts for 26% of hashrate. The Bitmain pool (Antpool) claims 24%.

Pools can censor transactions, since they are the ones who build the transaction blocks from which miners work.

It is therefore urgent that miners regain control by adopting the latest Stratum protocol. If only half the energy expended debating BIP-300 could be devoted to Stratum…

It should also be pointed out that few companies are capable of manufacturing ASICs. Bitmain has long claimed over 80% of the market. The only serious competitors (Canaan, MicroBT, etc.) are all Chinese.

We’ll have to wait for the Americans Circle and Blockstream to finish designing their own ASICs to gain decentralization in this area.

However, there’s no need to be paranoid, and there’s no shortage of good initiatives. The arrival of tiny miners is a potentially important one.

Inside BitAxe and NerdMiner

Bitaxe is a fully open-source mini miner. The Ultra model is the third version and supports the BM1366 ASIC of the antminer S19XP. In other words, the best chip on the market.

NEW: HUGE DEVELOPMENT IN HOME #Bitcoin MINING 🚨

The open source bitaxeUltra is a miner running off a BM1366 ASIC, which only costs $15 to purchase 👀

It runs at 527 GH/s and a very efficient and competitive 20 J/TH.

This could help democratize bitcoin mining and bring it to… pic.twitter.com/tzEdg3q8CB

— Bitcoin News (@BitcoinNewsCom) August 28, 2023

For comparison, an S19 XP (~$3,900) has 330 BM1366 ASICs. A BitAxe Ultra has just one.

So, even if the efficiency is the same (21 J/TH), the overall power of the BitAxe is only a fraction of that of an S19 XP miner. That’s around 500,000,000,000 hashes per second, compared with a global hashrate of 360,000,000,000,000,000,000 H/s.

So don’t expect to mine many bitcoins. Especially since the BM1366 chip isn’t enough on its own. You obviously need to add a motherboard, a fan, connectivity (Wi-Fi), a temperature sensor and so on.

The cost of these components is negligible for a 330-chip S19 XP. But that’s not at all the case with the BitAxe Ultra, which costs $95 (including only $15 for the chip). Put another way, a BitAxe costs eight times more than an S19 XP for the same hashrate.

And an S19 XP needs electricity at less than 12 cents per kWh to be profitable. We’re talking about 22 cents in France…

Can we expect a profit?

No. BitAxe isn’t even profitable, with electricity prices at $0. The profit would be barely $20 after three years (~0.001 bitcoin mined). That’s a loss of $75 when you subtract the initial investment of $95.

BitAxes with greater carrying capacity should be created to improve supply. Using a dozen or so chips would eventually help.

But as engineer @skot, who is involved in the BitAxe project, said:

“The goal is not necessarily to make a profit. This miner allows you to get your foot in the door to understand and learn.”

Indeed, building your own BitAxe is certainly a very rewarding experience. Here’s a video showing the assembly from A to Z :

For the Nerdminer, we’re talking about 55,000 hashes per second. This is laughable. It’s almost 10 million times less powerful than the BitAxe for a price of 35 euros. You might as well buy a lottery ticket, especially as the pools don’t accept such a small hashrate.

Finally, we’d like to point out that mining at home allows you to obtain “virgin” BTC. In other words, BTC not linked to your identity. That said, you still need to go through the right pool, since half of them now require you to show your KYC.

In any case, you can join a Coinjoin to cover your tracks after withdrawing your bitcoins from an exchange.