Mine Bitcoin or Sell Hashrate?
You can point your miner at a Bitcoin pool and get paid in BTC, or you can sell your SHA-256 hashrate on a marketplace and get paid for providing work. In South Africa, the right choice often comes down to volatility, uptime, and what your electricity bill really looks like.
By the end of this post you will be able to model both options with the same inputs, spot where difficulty and payout methods change expectations, and choose a default approach you can justify. You will also have a decision tree you can reuse when tariffs, downtime, or fees change.
Note for South Africa:
- Your all-in R/kWh is not just the energy rate, fixed charges and tariff structure can dominate small, home setups.
- Load shedding changes effective cost because uptime drops, cooling changes, and restarts can increase stale shares.
- Tax and records matter, treat mining like any other income activity and keep clean invoices, statements, and logs.
At a glance:
- Mining to a pool pays you based on BTC earned by the pool, plus variance, fees, and payout method.
- Selling hashrate pays you based on a marketplace price for SHA-256 work, you outsource pool choice and some variance but take platform and pricing risk.
- Difficulty affects expected BTC per TH over time, it can turn a good month into a bad month without your hardware changing.
- In South Africa, decision-making usually starts with your true R/kWh and your real uptime percentage, not your miner model name.
Key takeaways:
- Difficulty shifts your expected BTC output, pools and marketplaces just change how that risk is packaged.
- Payout method is a hidden fee, it affects variance, timing, and whether you effectively pay for luck.
- Track everything, especially timestamps and ZAR values, because SARS cares about facts and records.
What you are really choosing, mining Bitcoin directly vs selling SHA-256 hashrate
At a high level, both options turn electricity into expected BTC over time, but they do it through different contracts. Pool mining is a shared effort where your payouts depend on the pool’s results and its payout method. Selling hashrate is closer to renting out your machine’s work, where you are paid a rate determined by buyers.
The confusing part is that both paths can look similar in a dashboard, you see hashrate, accepted shares, and BTC paid. The economic reality is different, because the buyer on a marketplace is usually the one taking the pool, luck, and block-finding risk, and pricing that risk into what they pay you.
Before you compare anything, decide what you want to optimise for.
- More predictable cashflow: you will usually prefer payout schemes that reduce variance, even if fees are higher.
- Maximum upside: you will tolerate variance and you will accept that luck can dominate short windows.
- Operational simplicity: you want fewer moving parts, fewer pool changes, and fewer payout rules.
- Counterparty risk minimisation: you prefer to avoid holding balances on platforms for long.
If you are still deciding whether to keep mining hardware at all, it can be worth checking what your hardware would fetch on the secondary market via our sell your items page before you commit to months of power cost.
Quick comparison table, what changes between the two
| Topic | Mine to a pool | Sell hashrate (marketplace) |
|---|---|---|
| What you sell | Shares to a pool | Hashrate to buyers |
| What you earn | BTC based on pool payout rules | BTC based on marketplace price |
| Variance | Depends on PPS vs PPLNS and pool luck | Often lower for sellers, pricing can move fast |
| Fees | Pool fee plus withdrawal fee, varies | Marketplace fees plus withdrawal rules, varies |
| Operational load | Choose pool, tune, monitor, manage payout | Configure once, monitor uptime and rejects |
| Key risks | Pool downtime, payout scheme risk, custody | Platform risk, pricing risk, custody |
How Bitcoin mining difficulty works, and why it matters for your expected BTC output
Difficulty is Bitcoin’s way of keeping blocks close to a target schedule, even when total network hashrate changes. When more hashrate joins, blocks are found faster for a while, then difficulty adjusts upward and your BTC per TH tends to drop. When hashrate leaves, the reverse can happen, but it can take time to show up.
Bitcoin retargets difficulty periodically, based on a window of blocks and their timestamps. For a technical but readable overview, Bitcoin Optech’s topic page on the Bitcoin difficulty adjustment algorithm is a solid reference.
For miners, the practical point is simple, difficulty changes your expected output without warning and without you changing anything at home. That is why screenshots of one good week are not a plan.
- Short windows: luck and variance can dominate, especially on PPLNS style pool payouts.
- Medium windows: difficulty movement starts to matter more than luck.
- Long windows: power cost and hardware efficiency dominate, and difficulty is the big external variable.
If you want to sanity-check timing, you can watch an independent Bitcoin difficulty estimate and compare it to what your pool or marketplace profitability view assumes.
Mining to a Bitcoin pool, payout methods, variance, fees, and the role of luck
Most miners should not solo mine, the variance is brutal unless you are operating at very large scale. Pools smooth variance by combining many miners and distributing rewards according to rules. Those rules matter more than many people realise.
Common payout families include PPS style schemes and PPLNS style schemes, and there are hybrids. PPS tends to pay per share with lower variance but the pool takes more risk, so fees can be higher. PPLNS tends to pay based on a window of shares, it can be lower fee but more volatile for the miner.
When you compare pools, do not only compare the headline fee. Also check payout method, payout threshold, how they handle transaction fees, and what they do during downtime.
- Variance: ask yourself if you can handle a bad week without switching strategies mid-stream.
- Transparency: you want clear reporting of accepted shares, stale shares, and payout calculations.
- Payout control: check whether you can set thresholds and whether auto payouts are optional.
- Geography and latency: closer stratum endpoints usually mean fewer stales.
If you are new
- Start with one reputable pool and run it for at least a few difficulty periods before you judge results.
- Do not chase daily profitability graphs, learn how to read rejected and stale share rates first.
- Make sure your pool payout address is a wallet you control, not an exchange deposit address unless you understand the risks.
- Log your hashrate, watts, uptime, and payouts daily, even a simple spreadsheet is enough.
If you have done this before
- Re-check your assumptions after every major tariff or fixed charge change, your break-even moves.
- Compare pool results using effective BTC per TH over at least two payout cycles, not a single payout.
- Validate your stratum endpoint choice, many stales are just latency or DNS issues.
- Review firmware, fan curves, and thermal limits, SA summer heat changes everything.
Selling hashrate on NiceHash, how the marketplace works for sellers, and what you get paid for
When you sell hashrate you are not mining Bitcoin for yourself in the usual sense, you are selling SHA-256 work to someone else. The buyer decides where that work is pointed, often to a pool or sometimes to other destinations. You get paid in BTC according to the marketplace rate and the platform’s seller rules.
It is tempting to think of this as a free lunch, because it can feel more stable than pool payouts. The stability is not magic, it is the buyer paying for risk management, and sometimes that price moves against you quickly.
Do not assume any specific fee schedule, payout timing, or payout method without checking the platform’s current documentation. NiceHash has changed products and terms over time, and these details are the difference between a good and a bad decision.
- Good fit: you want simplicity, and you value more predictable BTC flow.
- Bad fit: you want maximum upside from good pool luck, or you distrust platform custody.
- Key operational metric: rejected shares and downtime, because marketplaces still pay based on accepted work.
If you need help deciding whether it is worth the operational simplicity trade-off, you can contact our team via contact us before you lock in a strategy.
Where pool selection still matters when selling hashrate, and why some setups fail
As a seller, you typically do not choose the pool the buyer points to, but you still have a pool-like connectivity problem. You must connect to the correct stratum endpoint, identify correctly, and keep rejects low. If your configuration is wrong, you can run hot and get paid poorly, even if your hashrate looks fine locally.
Many failures are boring ones, wrong region endpoint, wrong worker naming, wrong wallet field, or unstable internet. A third-party guide can help you understand the moving parts, for example minerstat’s overview of NiceHash stratum configuration, but always cross-check against the platform you are actually using.
- Pick the closest region endpoint that is stable for your ISP.
- Check time sync on your mining controller, bad time can cause connection weirdness.
- Watch stale and rejected shares, do not only watch local hashrate.
- Keep fallback endpoints configured if your software supports it.
Cost model for South Africa, electricity tariffs, fixed charges, load-shedding, and cooling
Mining profitability in South Africa is often decided by your all-in electricity cost, not by marginal tuning. Your bill can include a per kWh energy charge, plus fixed charges, plus time-of-use components depending on your tariff. Municipal structures can differ materially from Eskom direct, so your neighbour’s numbers may not apply to you.
Eskom’s own notice about NERSA-approved tariff changes and structural adjustments is worth reading as context, see Eskom FY2026 tariff increase. For a more reader-friendly local summary, TechCentral also covered the approvals and categories in NERSA approved tariff increases explained.
The point for miners is that fixed charges can raise your effective cost per kWh, especially if you are a small household with low monthly usage. BusinessDay has reported on how restructuring and fixed charges can hit smaller users harder, which is relevant when you are adding a miner to an otherwise modest household bill, see how tariff restructuring changes household bills.
Mini worksheet, get to an honest all-in R/kWh
Use this quick worksheet before you compare pool vs marketplace. You are trying to avoid the common trap of using a prepaid rate, or an old rate, and ignoring fixed charges.
- Take your latest bill and identify total cost and total kWh for the month.
- Compute effective R/kWh, total bill divided by total kWh.
- Adjust for mining, add the miner’s kWh and re-check what tariff step or time-of-use bracket you move into.
- If you have fixed charges, calculate what portion is unavoidable even if you switch the miner off.
Load shedding and uptime, why 80 percent uptime can be worse than you think
Uptime affects revenue linearly, but cost does not always drop linearly. Cooling fans, networking, and monitoring may keep running, and restart behaviour can waste time and increase stales. If you run batteries and an inverter, you also need to model conversion losses and battery cycle impact as part of the all-in cost.
- Grid-only: plan for off periods and slow restarts, and use smart plugs and surge protection.
- Inverter and battery: track AC output kWh, not only DC battery stats.
- Generator: model fuel cost per kWh and maintenance, not just today’s pump price.
If your mining stability depends on backup power, our professional inverter repairs service can help when uptime issues are caused by the power layer.
Risk and custody checklist, payout thresholds, counterparty risk, and wallet hygiene
Both pools and marketplaces add counterparty risk, and both can have outages, policy changes, or withdrawal delays. Your job is not to eliminate risk, it is to keep risk proportional to the size of your balances and your operating budget. The easiest risk reduction is to avoid letting balances build up on third-party platforms.
Custody and payout checklist
- Use a wallet you control for payouts where possible, and test it with a small payout first.
- Set payout thresholds with intent, low thresholds reduce platform exposure but can increase fees.
- Enable strong account security, unique passwords, and two-factor authentication where available.
- Keep a clean device for managing withdrawals, avoid browser extensions you do not need.
- Document where your BTC goes next, exchange, cold storage, or spending, and keep those records.
If you are upgrading or rotating hardware to reduce risk and downtime, check our current miner options in the Bitcoin ASIC miners section, and use it mainly to compare form factors, power draw classes, and cooling approaches rather than chasing advertised returns.
Tax and recordkeeping in South Africa, how SARS describes mining and what to track
Mining creates crypto receipts, and in South Africa those receipts can be taxable under normal income tax principles depending on your facts. SARS explicitly discusses crypto assets and notes mining as a way crypto assets can be acquired, see the SARS page on SARS guidance on crypto mining tax. The practical action is to keep detailed records, because tax outcomes depend on evidence.
Do not guess whether your activity is a hobby or a trade, and do not assume all gains are capital. If you are operating systematically, with an intention to profit, SARS may view it differently than occasional hobby activity. If you are unsure, speak to a qualified tax practitioner and bring organised records.
What to track, minimum viable recordkeeping
- Date and time of each payout, amount in BTC, and the platform statement or transaction ID.
- ZAR value at receipt time, using a consistent method and a recorded source.
- Electricity invoices, tariff codes, and any fixed charges, plus proof of payment.
- Hardware invoices, import documents, repairs, and spare parts, with serial numbers if possible.
- Uptime logs and configuration changes, so you can explain performance drops.
Decision guide, when each option makes sense for ASIC owners vs GPU miners vs hobbyists
This decision guide assumes you are choosing between mining BTC to a pool or selling SHA-256 hashrate, so it is mainly about SHA-256 ASIC owners. If you are a GPU miner, you are usually not mining SHA-256 profitably, so selling SHA-256 hashrate is not the relevant comparison. For GPU miners, the higher-level lesson still applies, compare predictable payouts versus variance, and watch fees and custody.
Decision tree, pool vs hashrate marketplace vs pause
Work through this in order, and do not skip the electricity and uptime steps.
- Hardware type: Are you running a SHA-256 ASIC? If no, a SHA-256 pool vs SHA-256 marketplace comparison is usually not your path.
- All-in power cost: Do you know your effective R/kWh including fixed charges? If no, pause and do that worksheet first.
- Uptime reality: Can you sustain high uptime despite load shedding? If uptime is low or unpredictable, focus on reducing stales and using stable endpoints before you optimise anything else.
- Variance tolerance: Do you need steadier payouts for cashflow? If yes, prefer mechanisms that reduce variance, which may include a marketplace or PPS style pool payouts.
- Operational preference: Do you want to actively manage pool selection and payout rules? If yes, mine to a pool and choose a scheme that matches your goals.
- Risk appetite: Are you comfortable holding balances on a platform? If no, pick the option that lets you withdraw frequently and reliably, then set strict payout thresholds.
- Outcome: Choose one, mine to a pool, sell hashrate on a marketplace, or pause and sell hardware if your all-in cost and uptime do not justify running.
Mini prompt, compare both options with the same inputs
- Your hashrate (TH/s) and measured watts at the wall.
- Your uptime percentage over the last 30 days.
- Your effective all-in electricity price in R/kWh.
- Pool fee percentage and payout method assumptions.
- Marketplace fees and payout rules you have verified in current platform documentation.
Common mistakes
- Using a prepaid per kWh rate and ignoring fixed charges and tariff steps.
- Comparing a good luck week on a pool to an average week on a marketplace.
- Ignoring rejected and stale shares, then blaming difficulty for bad payouts.
- Letting balances accumulate on a platform because withdrawals feel like admin.
- Not keeping ZAR-at-receipt records, then trying to reconstruct months later.
Frequently asked questions
Does difficulty affect NiceHash sellers the same way it affects pool miners?
Difficulty affects the underlying economics for everyone, because it changes expected BTC output per unit of hashrate over time. As a seller you may feel it indirectly through marketplace pricing, because buyers adjust what they are willing to pay as conditions change.
Is selling hashrate always more predictable than pool mining?
It can be more predictable in the short term, but it is not guaranteed. You swap some block-finding variance for pricing risk, platform rule risk, and sometimes higher effective fees.
Should I choose PPS or PPLNS on a pool?
PPS style payouts usually reduce variance for the miner, while PPLNS often increases variance but may have lower headline fees. The right choice depends on your cashflow needs and how long you plan to stay on the same pool.
How do I think about electricity cost when I have solar and batteries?
Model it as an all-in cost per kWh delivered to the miner, including inverter losses, battery wear considerations, and what you give up by using that energy for mining instead of household loads. Keep it conservative and track real measured kWh, not estimates.
What records should I keep for SARS if I mine or sell hashrate?
Keep payout statements, wallet transaction IDs, timestamps, and a consistent ZAR value at receipt time, plus electricity invoices and hardware invoices. SARS guidance emphasises that tax treatment depends on facts, so documentation is your protection.
Summary, a practical way to decide
- Start with your effective R/kWh and uptime, not with profitability screenshots.
- Choose your variance profile, pool payout method versus marketplace pricing behaviour.
- Keep platform balances low and tighten wallet hygiene and security.
- Track payouts and ZAR values from day one, do not try to rebuild later.
This is educational content, not financial advice.
