Definition
Mining profitability is the bottom-line measure of whether mining is financially worthwhile. The basic formula is: Profit = Revenue – Costs. Revenue comes from block rewards and transaction fees, proportional to your share of network hashrate. Costs include electricity (the largest expense), hardware depreciation, maintenance, and hosting fees.
Key variables affecting profitability: Bitcoin price, network difficulty, electricity rate ($/kWh), miner efficiency (J/TH), and hashrate. Profitability is dynamic and can change rapidly with Bitcoin price swings and difficulty adjustments.
In Simple Terms
Net financial return from mining after subtracting electricity and other costs from Bitcoin earned.
The net financial return from mining after subtracting electricity costs and other expenses from mining revenue (block rewards + transaction fees).