How to calculate mining profitability?

How To Calculate Mining Profitability

Mining Profitability Calculation

Blockchain technology is adapting and evolving rapidly. Initially, anyone could mine bitcoin using a PC and a graphics card, as there were no special requirements. However, this is no longer the case – as more and more bitcoins were mined, the mining difficulty increased significantly. Higher difficulty meant more and more power was required to solve the cryptographic tasks. Electricity and hardware outputs raised dramatically. It was a motivating factor for miners to form mining pools, whose profitability proved to be more reliable, with more frequent payouts. With new Altcoins flooding the market, the numbers in the mining community are growing, as well. Today’s mining community is huge, with some web mining providers counting over half a million members. In this article, we will provide some essential information about the calculation of mining profitability and the profitability of mining pools. Stick with us and check everything out.

MINING PROFITABILITY AND COSTS OF RIGS

The optimal and operational grid is the most important part of any mining system. There are two common ways of building this type of system.

  • DIY mining rig: built from PC elements in a case(hull); with the most important ones being CPU, GPU and power adapters. DIY rig is practical for mining Altcoins since CPU power is used in the process, as well. Bear in mind that this type of setup requires additional power adapters. Altcoin mining profitability calculators can help you estimate your investment returns. CoinWarz is one of the most used ones.
  • ASICs: Specialized pre-made units, often higher in price then DIY rigs. They come with a USB or an Ethernet port. ASICs are capable of doing more calculations using less power then DIY rigs. Calculations are measured in hash power (rate). It is important to use a GPU mining profitability calculator before investing in such products.

To calculate a hardware return of investment rate check out nicehash. We recommend you consult this site before investing in the equipment parts. They also provide a free GPU mining profitability calculator.

Nicehash Profitability Calculator

Nicehash Profitability Calculator

MINING PROFITABILITY CALCULATORS

Mining profitability calculators work on a fairly simple principle. The calculation involves the input of hashing power (Ghash/s), power consumption (w), the cost of the power (kW/h($)), and the price of the cryptocurrency, of course.  Also, make sure to involve secondary costs into your calculations. These expenses involve the initial cost of the equipment, delivery, and various accessories. The result of mining profitability calculation is a return rate of your investment. Keep in mind that results might be volatile due to erratic price trends on the crypto markets.

Bitcoin mining profitability calculator

The difficulty of mining bitcoin in 2018 is rather high. It might be overly optimistic for a newcomer to hope to obtain the expensive grid required to mine bitcoin. This is why bitcoin is usually mined in pools or via services like Genesis mining. Services of the websites which provide bitcoin mining profitability calculators can assist you as well. Trade block is one of them, or you can check out Botcoinx as another option. However, if you are looking to get yourself a quality ASIC rig, something like Antminer S9 might be a good choice to go.

Example: With 1 Anminer S9 you could be mining around 0.11 Bitcoins a month. If we also calculate the pool fees, hardware costs and electricity cost you could be scoring the profit of $2000 in a 12 month period. Cost of the rig is also covered (Antminer S9 costs around $2000).

Altcoin mining profitability calculator

The altcoin mining profitability calculators provide calculation services for cryptocurrencies other than bitcoin. If you are interested in an ethereum mining profitability calculator, visit CoinWarz or Dustcoin. The difficulty of mining operations in these cases is lower than with bitcoin. Thus, mining Altcoins might show greater profitability for home-made rigs.  Ether is a specific cryptocurrency, however, since its price and difficulty is relatively high compared to other Altcoins. Calculations show that Ethereum might show greater profitability when initial investments are higher.

Mining profitability example: With 12 GPUs which cost approximately $3,800, 1200 w Power consumption and rate of 0,06 KW/h ($) you would be looking at the 14.73 ETH a year. A clean profit around is $3,100, which is pretty nice. Once again, profit rates might oscillate depending on the movement of Ethereum price charts.

CoinWarz Profitability Calculator

CoinWarz Profitability Calculator

PROFITABILITY OF MINING POOLS

Mining pools were a natural reaction to progressive jumps in the mining difficulty. Since mining requires a system to „find and solve“ the „lucky“ block to recive a reward – solo mining became obsolete for many without expensive ASICs. Thus, the mining pools came into existance. They function on a principle of sharing. When a miner from the pool solves a rewarding block, a pool takes it and rightly distributes the reward among all miners in the pool. Higher frequency of rewards is why mining pool profitability tends to be more effective for stand-alone miners.

Blockchain technology and mining pool profitability vastly depend on the trust among the investors and the contractors. Especially on the internet. Fortunately, reliable contract providers are avliable nowadays. Genesis mining is an example of a profitable cloud service provider. Cloud services are great solution for new miners. Providers own huge GPU facilities – which they build near power plants because of the enormous electricity output. The basic idea is to „rent“ the hashing power from providers. Users are basically buying a share of GPU for mining, pay a fee and receive payments. Mining profitability using Genesis has shown to be greater than many solo-setups.

Mining profitability example: $30 investment in Bitcoin mining (1BTC=$15,000), with 168GH/s, might optimistically result in $100 profit in a 12-month period (Genesis mining profitability calculator). Sceptically, the results would be around $50 in profits.

Blockchain technology is here to stay. The system built on trust and the financial independence is useful and wanted by the people. As more of us learn about it, the community grows.We still don’t know how will everything unfold. However, if you are interested in mining cryptocurrencies, you are definitely not too late.

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Author: Ben Prescott
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