How to Calculate Mining Profits

This article shows how to calculate mining profitability using the special formula, how much money you are going to spend for hardware depending on its type, approximate electricity costs by country and additional pool fees. Moreover, it provides the list of online calculators which will help you to estimate your expenditures.

Before committing your resources to mining, you will have to make sure it is profitable for you. There are a lot of factors that may come into play when calculating your mining profitability, such as mining algorithms, hardware, and electricity bills.


Expressed in the simplest form, your mining profitability equation looks like this:

I - B = P,

where I stands for income you make, the value of the number of coins you mine each month, B — electricity bills, money you spend on electricity, P — profit, money you are left with at the end of the month. You can figure out approximate earnings beforehand by going to online mining calculators, where you can choose your GPU model, enter your electricity rate, and the cryptocurrency you mine.

Hardware expenses

You will have to make sure your equipment pays for itself in a reasonable amount of time — usually three months. As a miner, you would usually use either GPUs or ASICs. Graphics cards are common for mining ASIC-resistant cryptocurrencies, such as Ethereum and Monero.

A GPU-powered mining rig implies that you will have to spend extra money on additional hardware, such as PSUs, Power Supply Units. PSUs differ in the watts they supply and draw. If a PSU claims to supply 800W and is 80% efficient, it would actually draw 1000W from your wall. Don’t cheap out on PSUs and buy those with higher efficiency. GPUs also generate a lot of heat, so unless you want to risk your house setting on fire, you will have to have a good cooling system, which is another item on your expenses list.

ASICs are usually easier to manage as they come in their own cases with their own fans for cooling. You may want to buy a UPS (Uninterrupted Power Supply) so that you can go on mining your precious coins without downtime, even if power shuts down. Although this is true for both GPU and ASIC rigs. Among the most popular ASICs are:

  • Antminer S9, 14 TH/s, $3k;
  • Dragonmint 16T, 16 TH/s, $2.7k;
  • Antminer R4, 8.6 TH/s, $1k.

Electricity bills

After you’ve returned back the money you had spent on your rig, you start making the actual profit off of it. Electricity costs can vary dramatically depending on where you live. In EU, due to their ecological policies, prices for electricity are much higher than, for example, in China, where coal is cheap. Due to this, mining is big in China, and Chinese miners provide the largest portion of total hashrate in many cryptocurrencies. Here is an incomplete list of how much electricity costs in some countries:

  • China, 4 US cents/KWh;
  • Germany, 35 US cents/KWh;
  • Japan, 22 US cents/KWh;
  • Russia, 2.4-14 US cents/KWh;
  • South Africa, 15 US cents/KWh;
  • UK, 22 US cents/KWh;
  • United States, 8-17 US cents/KWh.

To calculate the precise amount of money you spend on mining, compare your bills from before you started mining and after, and find the difference.

Additional costs

If you are pool-mining, which is most likely, you should also take into account the pool fees. Some pools do not have fees at all, other can charge you up to 4% of your earnings. Read their instructions carefully and learn about their reward structures, before joining a pool. Here is the list of the biggest mining pools:

  • Antpool, 0-2.5% fees depending on the type of membership;
  • Slush Pool, 2% fee;
  • F2Pool, 4% fee;
  • BTCC Pool, 2% fee;
  • BW Pool, 1% fee.

Mining equipment is mostly manufactured in the US, so this means that you will have to spend some money on shipping, which is not very cheap, considering that ASICs can be heavy big machines. Some of your money will go to various accessories, such as cables, adapters, and so on.

There are plenty of useful websites that will do all the math for you.

  • Crypto Compare. An easy calculator. Choose the cryptocurrency, enter your hashrate, wattage, and power cost, and it will give you your daily average profit.
  • What To Mine is one of the most useful calculators online. You choose your GPU model, and the site will calculate the power draw, hashrate, profit, and even recommend the most profitable cryptocurrency for your hardware.
  • NiceHash Calculator is an easy straightforward calculator that lets you choose your GPU model and country, and gives you the average daily, weekly, and monthly profits.
  • MyCryptoBuddy is another good calculator, which accounts for the average difficulty increase each month;
  • Coin Warz is an Ethereum mining profits calculator that allows you to put your hardware cost in calculations.

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How a Large Cryptocurrency Mining Operation Is Handling the Current Market

Cryptocurrency miners of all sizes have been suffering from the bear market that has heavily depressed prices, causing some to abandon the field as their proceeds were no longer covering expenses. However, for others this period has formed a time to grow while their competitors are struggling. To find out how one operation is handling the situation, talked to the CEO of Bitfarms about a big step his company recently took. Also Read: Bitmain Releases Miner 3x More Powerful Than Its Predecessor Bitfarms Secures $20 Million in Loan Financing Bitfarms Ltd. (TASE: BLLCF) notified investors earlier this month that it has secured $20 million in strategic debt financing to fund the crypto mining company’s ongoing operational expansion. The capital is being provided by New York-based Dominion Capital and will be made available in four $5 million tranches tied to various milestones such as infrastructure building and hardware purchases. The loan will bear a 10 percent interest rate and Dominion will receive approximately 6.7 million equity purchase warrants that can be exercised to acquire Bitfarms’ common shares. Bitfarms operates four mining farms in Québec, Canada with about 220 Ph/s of hash-power, all using green and renewable hydroelectricity. Wes Fulford, CEO of the company, explained to that Bitfarms has already begun deploying the proceeds of the debt financing deal. The plan is to construct a new center in the municipality of Sherbrooke, Québec and purchase new generation, higher efficiency ASICs as “current hardware pricing presents a compelling opportunity to invest in our operational build-out.” Crypto Winter Brings Challenges But Also Opportunities Besides the obvious negative effects of a sustained bear market, the situation also offers opportunities for big miners. These include the aforementioned cheaper hardware prices as well as killing off weaker competitors who depend on more costly electricity, and also deterring new miners from entering the business, thus clearing the field for those that survive this period by hunkering down. “It has been a very challenging environment for many cryptocurrency miners to maintain profitability,” explained the Bitfarms CEO. “At current network difficulty and BTC pricing, and assuming the average miner allocates 10% of power to cooling, a 13.5 TH/s S9 Antminer (arguably the most prevalent SHA-256 ASIC miner in use) is currently losing money at power costs above US$0.068 per kWhr. This break-even analysis doesn’t include operational overhead. Despite falling BTC prices, in 2018 we witnessed a period of exponential network hash rate growth as miners purchased earlier in the year were brought online.” “Many miners paid exorbitant pricing for hardware in late 2017 and during the first half of last year. Much of this hardware landed in expensive hosting facilities under contracts that are no longer economic,” Fulford told “With the decrease in BTC pricing and increase in mining difficulty, these participants have failed to recover their original hardware costs which will certainly deter further investment. As in any nascent industry, markets will experience volatility and things will take time to mature. Going forward, external investment capital will be reserved for the best projects led by experienced operators.” The head of the mining company also sees some positive signs in the market. “In recent months, we are pleased to see a more normalized and somewhat predictable correlation between price and difficulty. With attractive current hardware pricing, specifically price/TH metrics, we have a unique investment opportunity and plan to aggressively pursue our operational expansion,” he said. “We believe the industry is shifting from hobbyist ‘garage’ miners to large industrial operators,” added the Bitfarms CEO. “The pricing and difficulty correlation looks to be stabilizing at these levels. We anticipate further growth in hash rates throughout 2019, however at a much more subdued pace to that witnessed last year. In a stable BTC environment, network growth will be heavily influenced by the undercapitalization of major hardware manufactures (i.e. smaller production runs), marginal hardware efficiency gains and a more measured pace of capital investment.” Do you think crypto winter is good for ecosystem development and company consolidation? Share your thoughts in the comments section below. Images courtesy of Shutterstock. Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Satoshi’s Pulse, another original and free service from The post How a Large Cryptocurrency Mining Operation Is Handling the Current Market appeared first on Bitcoin News.
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