Many people ask us, “How much will a mining rig make?”. Turns out that is a hard question to answer, because profit depends on multiple factors that are changing constantly. In this article, we will try to answer this question by understanding the factors and looking at how they work together to determine what an ETH mine can actually produce.
In addition to covering how mining profitability is determined, you’ll also notice something when you look at these numbers: The potential profitability of mining ether (ETH) on the Ethereum blockchain has fluctuated dramatically over the past six months. By understanding the factors that contribute to profitability, you’ll see why these dramatic swings have occurred.
Before we jump into the analysis, please note that we are using the term “profit” to describe the potential production (in $USD) of a typical GPU mining rig during a certain period of time (30 days in this case). To determine that production number, we consider expenses such as electricity and mining pool fees. That gets us to a gross monthly “profit” potential – or “profitability”. However, there would only truly be “profit” if your rig had reached payback (earned more than it cost to build) and is now mining at a net profit. We’ll look at the initial investment and the payback period a bit later.
WHAT DETERMINES MINING PROFITABILITY?
Mining rig profitability is driven by:
– Cost of the rig (e.g., $2800-3200 – parts only – in our example)
– Hash rate the rig produces (e.g., 140 MH/s)
– Power usage of the rig (e.g., 950 Watts)
– Cost of electricity (e.g., $.07 per kilowatt hour)
– Difficulty of the hashing algorithm (See on Etherscan.io)
– Price of the cryptocurrency (See on CoinMarketCap.com)
Most of these factors are pretty straight-forward and easily understood, except for difficulty.
Difficulty is the mechanism that (proof of work) blockchains use to control the amount of the cryptocurrency that will be mined (created) every day. A blockchain seeks to issue a fixed reward (amount of coins) each day. If twice as many machines come on line to mine a cryptocurrency, the difficulty of mining will automatically adjust so that all miners earn half as much as they did before the hash rate doubled. Difficulty controls the rate at which new cryptocurrency is mined.
WILD SWINGS IN ETHEREUM MINING PROFITABILITY
When we look at the past six months, we see that a typical 6-GPU ether mine would have monthly profit potential that ranged from a low of $69 last October to high of $605 in January. As of today (March 8, 2018), the price of ETH has fallen and the number is now below $200/mo.
UPDATE – As of March 15, 2018, with ETH = $612 USD, the 30-day profit potential of the subject mine is now $148 USD.
For more info on the complete parts specifications for a rig, check out:
How much does it cost to build a GPU mining rig?