Don’t Start Crypto Mining Now: 500+ Days Just to Break Even

These days it seems like cryptocurrency is constantly in the news with some investors and miners taking home huge profits. If you’re not already involved, it may seem like getting into cryptocurrency mining — the process of minting a new coin by having your computer solve complex equations — could earn you some money. However, if you look carefully at the cost of building and maintaining your own mining rig, as we have below, you’ll find that it currently takes between 500 and 900 days just to break even. And that’s assuming your equipment doesn’t break and that current prices don’t sink much lower.

The latest downward trend in crypto prices, along with the uncertainty surrounding the key currencies, is bad news for new miners. However, given that miners have been snatching up GPUs and driving up GPU prices, it could be good news for gamers who want to buy the best graphics cards at anywhere close to MSRP.

One of the biggest factors in mining profitability is the amount of energy consumed. Looking just at Ethereum, since that’s by far the largest cryptocurrency that’s mined via GPUs, current estimates peg the Ethereum network’s power use at 111 TWh per year and 261 kWh per transaction. That means if someone wants to buy lunch at a place that accepts Ethereum and sends $15, around the globe there will be about $26 worth of electricity (at a rate of $0.10 per kWh) burned up “securing the blockchain” for that (and other) transactions.

Ethereum 2.0 looks to address this major concern by switching to a proof of stake model, which would eliminate most of the power drain. That’s slated to occur some time in the first half of 2022, though do note that it has already been pushed back two years and could end up being delayed once again. Now factor in the still-inflated GPU prices and you have a trifecta of great reasons to not think about starting mining or expanding an existing mining farm.

But let’s say someone wants to throw caution to the wind. Just how bad an investment would it be to purchase PC hardware for cryptocurrency mining right now? Let’s run some numbers, but start with a look at the current profitability of the last two generations of GPUs. We’ll sort these according to the time required to break even, using current eBay GPU prices. We’ve factored in the cost of the rest of the PC as well as electricity costs, which gives the following:

One thing to note is that we’re using LHR hash rates for the RTX 30-series GPUs, as Nvidia isn’t allowing the production and sale of new non-LHR cards. Only the RTX 3090 remains fully unlocked for GPU mining. Also of note, more recent drivers and firmware seem to have rolled back some of the gains made by NBminer in overriding the LHR limiter, so that RTX 3080 Ti as an example only ends up running at 63 MH/s. We’re giving miners the benefit of the doubt by not using the half-speed figures on the LHR cards, but Nvidia hasn’t given up on limiting Ethereum mining performance. 

If Ethereum goes through with the proof of stake change, miners could be looking at 780–825 days to break even.