How Does a Cryptocurrency Calculator Work?


Cryptocurrency is a digital currency that uses encryption to regulate the generation of units and verify the transfer of funds, operating independently of a central bank. Its most popular form is Bitcoin, which has been around since 2009. To know how bitcoin mining calculators work, you must understand how cryptocurrencies are created in the first place.

Creating Bitcoins (or any other cryptocurrency) involves solving complex mathematical problems using computer power via “mining.” Miners are people who use their computers to solve these problems to be rewarded with new units of currency. These units are then used as payment for goods or services from other people or businesses who accept them as payment.

It’s common for individuals who mine or buy cryptocurrencies to want to see how much their holdings are worth in U.S. dollars or other traditional currencies like euros or yen at any given time—which is where cryptocurrency calculators come into play! This article will provide an overview of what a cryptocurrency/bitcoin calculator does, how it works, and which ones are best suited for different users.

How to Use Crypto Currency Calculator

Since cryptocurrency is relatively new to the market, we are yet to witness a standard crypto or bitcoin calculator. Right now, you can find many different apps that can accurately calculate profits, converted sums, investments, mining calculators, etc.

Regardless of the tools, it’s essential to know the calculated values are just estimates and don’t necessarily turn out to be exactly as predicted. That’s because of the varying nature of cryptocurrency. However, the predictions from the top calculators are generally accurate.


Cryptocurrency and bitcoin calculators are a good way to calculate profit and loss. The cryptocurrency calculator helps you calculate how much money you can make or lose by investing in a particular cryptocurrency.

Even if you use a bitcoin calculator for information purposes only, it might benefit your investment strategy overall. Here is how to use different bitcoin calculators to determine profitability and currency rates.

Crypto Converter

A Crypto converter lets you convert from one coin to another. You can also calculate the value of one FIAT currency from a specific bitcoin. For instance, if you want to find out the worth of $500 in Bitcoin or how much Ethereum makes one bitcoin, you can do it conveniently through a Bitcoin calculator and converter.

You can use the Bitcoin Auto-Converter tool, available as a Chrome extension. It calculates the value of bitcoins automatically. So, wherever the browser sees terms like “0.1 BTC”, etc., it will provide a USD equivalent on your browser screen.

Moreover, the CoinMarketCap Converter lets you convert your assets to cryptocurrency based on the current average values at the CMC. You can save currency conversions as URLs in your browser. It also features a mobile app to compare currencies with the Bitcoin calculator. Go to Account and tap Tools. Next, go to the Converter option to convert currencies.

Crypto Profit Calculator

The Crypto profit calculator will give you your digital assets’ potential profit/loss estimates. One such calculator is the Dexfolio calculator. Follow the steps below to calculate different cryptocurrencies and profitability.

  • In the ‘Currencies’ section, select your preferred currency, i.e., USD, Eur, etc.
  • Next, choose the coin from the ‘Coins’ section. It provides a dropdown list of cryptocurrencies for navigation.
  • Now, enter the invested amount in the ‘Investment’ field.
  • Then, provide the ‘Initial Coin Price.’ It’s the price you bought the coin for. For instance, if the price rate was 30k USD per bitcoin, that will be your initial price for this bitcoin calculator.
  • Now, enter the ‘Selling Coin Price”. It’s the price you sold the coin for. But if you’re only checking for profits, enter the current coin price.
  • Lastly, you have to input the Enter and Exit Fee.

Once all fields are filled, you should see the net profit or loss you have made from your bitcoin investment.

Crypto Tax Calculation Tools

The cryptocurrency tax calculators tell whether you are liable for any cryptocurrency taxes. While taxation is hard to calculate, a couple of easy-to-use tax calculators can do the job conveniently.

The CoinLedger platform is an excellent option for tax calculation. You can connect it with your crypto wallet, and it will analyze your transactions, NFTs, mining, income airdrops, staking, and other crucial parameters. In addition, it can create reports for each type of taxation and gives you accurate numbers for various tax periods.


More importantly, you can use the reports from CoinLedger with other common taxation software like TurboTax Desktop, TurboTax Online, and TaxAct. Also, Accounting provides an easy and intuitive online platform to calculate bitcoin taxes. It tracks your portfolio to generate a tac report through Trading Tax Optimizer.

Final Words

The cryptocurrency industry is still largely unregulated, which means you will find a lot of incompatible variables and unforeseeable price fluctuations. It might seem overwhelming if you’re new to the space or it’s your first time calculating a crypto transaction.

However, plenty of cryptocurrency or bitcoin calculators can help you quickly get the hang of things. You just need to understand how the market works and how to protect yourself from its pitfalls.