Is mining cryptocurrency still profitable?
Yes…. but it’s complicated.
Taking up mining is more than it seems and actually requires considerable planning before getting started, there are many factors at stake but let’s consider the top three.
1. Cheap Electricity
The rates for this change from country to country, this will be one of your biggest recurring costs, if you can get this for free or almost nothing- then half the battle is already won. Electricity will be a considerable factor when taking up mining. Depending on the machine you go with, whether it be a few ASIC’s or a custom GPU mining rig, you want to make sure they are optimized to be as energy efficient as possible.
Consider the chart below on profits and earnings after electricity costs.
2. Hardware and Equipment
As mentioned there are currently two main methods of mining. Both require intensive technical setup and can significantly spike your electricity bill.
Option 1) GPU Mining:
It’s no surprise that college students were printing millions off their gaming computers mining Ethereum in the early days. This type of mining is done by harnessing the hash power that GPU’s are able to generate and directing it towards a network such as Ethereum or other alt coins. Profitability largely depends on the price of the coin at the time of mining and how much hash power the user is generating, i.e. how many GPU cards they have.
Option 2) ASIC Mining:
ASIC stands for Application Specific Integrated Circuit, which means they are computers awesome at mining one thing.
These can range from $5000-$9000 per machine and can last you a few years with the right model. If you’re a solo miner, you will be in fierce competition with mining farms with infinite solar power and thousands of ASICs. Which brings me to my next point…
3. Mining Pools and Exchange Fees
Mining pools are a way for many individual miners to band their hash power together and become more effective at mining new blocks. The chart below compares the fees of several mining pools.
Not only do you have to pay a percentage to the pools, but also the exchanges you interact with. There is a fee associated with placing the trade as well as making a withdrawal from the exchange itself. Below are a comparative list of fees.
If you have access to cheap electricity and can afford the hardware, mining can most definitely be a profitable venture for you. For the vast majority of us who don’t fit those requirements — we’re better of simply buying cryptocurrency and holding.
If you’d like to learn about the mining solutions we provide, check us out at www.Titan.io