Bitcoin prices are soaring past 15000 on to new heights for the year. This tends to be good for miners, same with high fees. Cryptocurrency mining is now a dream for most. On paper, it’s the ultimate “job”. Build a rig and earn money in your sleep 😏
The economics of that was easy in 2011 when no one was doing it, cryptocurrency mining is now a complex calculation that almost always sums up to “unprofitable”. If you wanted a quick answer to the question “Is cryptocurrency mining still worth it?” the answer is 98% no. With that in mind, let’s dig into what we can do to be in that 2%.
Poolin‘s mining profit‘s calculator is a great starting point to do research on different mining rigs.
- A mining rig will cost you around 2-4 thousand dollars.
- Currently, profits are between 5-10 dollars a day (factoring in electricity).
- It would take a year to recoup mining costs at this rate
Of course, we’re in a big bull run at the moment so those margins are unlikely to last. Further, mining profit is constantly depreciating. Before the year is up someone will come up with a better, faster, ASIC model which will slash your own returns. At face value, you’re unlikely to recoup your initial value.
Trick 1: Cutting Costs
Have or aquire low electricity costs. The most obvious path to profitability is to cut your costs somewhere. Having cheap/free/subsidized electricity costs are one way. That alone could add 2.30 dollars onto your daily profit. That’s easier said than done, of course. The amount of electricity a mining rig will use is definitely an amount your electricity provider would notice. If they are subsidizing your electricity costs, they’d likely consider the use of mining equipment as abuse.
Buy a used rig. Another place we can possibly cut down on costs is the machine itself. Buying used is a good option, but comes with the problem of finding parts in good condition (plus labor involved in building the thing). When bitcoin prices fall, some miners can no longer afford to stay in business. Someone savvy with foresight can pick up a good deal for cheap.
Trick 2: Make it Worthwhile For You
Use your miner as a space heater. Cryptocurrency miners are big, loud, and generate a lot of heat. Surely the first two will always be annoying, but the heat generation could be useful. For those who live in a colder climate, it might help heat your place, and in turn, lower your heating bill. That would effectively decrease your electricity costs
Use your gaming rig for mining. For those of you who are into PC gaming, having a GPU intensive machine fulfills a second role. In fact, you might already have a gaming rig and make relatively minor modifications to use it for mining as well. This effectively slashes your initial hardware investment.
Trick 3: Be Cunning With What You Mine and How You Spend it
Get the early mover‘s advantage. Before new projects are listed on the exchanges, coins have to be mined. This means that miners have an advantage that allows them to get in earlier on a new coin than anyone else. Instead of cashing out immediately, HODL them. These new coins will either shoot up in value or tank to nothing later. This is risky business of course. A fair amount of skill is required to pick promising projects. When done well, it can easily end up paying off your rig and more.
When mining popular coins, sell them above market value. As a miner, you’re the minter of the currency. This means that you can turn dollars (electricity) into cryptocurrency without having to suffer through an exchange and their fees and policies. That can be extremely useful in and of itself. We’ve written posts before about how to spend cryptocurrency for more than it’s worth. Mining gives you a steady, predictable stream of income that you can potentially flip for an even higher value.