More than a decade ago, mining bitcoin at home was incredibly straightforward. If you had diamond hands (never sold), sold at the right times, and didn’t throw away your hard drive, you could mine so much bitcoin with just a few gaming machines or by covertly tapping into your school or office’s infrastructure that you’d be set for life.
Such wild days are long gone, notwithstanding one-in-a-million anomalies like the bitcoin miner who mined a block by himself in January 2022. Mining companies with whole warehouses full of strong, custom-purpose mining equipment are now fighting for block rewards because the Bitcoin network has become so huge. However, there are still ways for the average person to profit from cryptocurrency mining – and not only bitcoin mining. In this post, we’ll show you how to analyze your chances of generating a profit and which coins are the greatest.
Is it Profitable to Mine Bitcoin at Home?
With Bitcoin, the world’s first globally accessible cryptocurrency, mining — the process of using computer power to produce a winning code (known as a hash) before anybody else in order to be chosen to add a new block to the blockchain – became popular. In exchange for their efforts, each successful miner receives newly minuted bitcoin as well as any fees linked with the transactions they include in the new block. This kind of blockchain validation process is known as “proof-of-work.”
When mining a cryptocurrency, you must evaluate the risks that might lower your profits, such as the price of bitcoin, the cost of electricity, maintenance fees, and the cost of your mining equipment, as well as how long it will be able to survive more powerful miners. When more powerful gadgets hit the market, your once-powerful equipment may not be able to keep up.
Profitability calculators, like as those provided on Nicehash, may assist you in determining if your company will make or lose money. Assume you don’t have access to a hydroelectric dam and must rely on the average home rate of $0.1411 per kilowatt-hour on the US power grid.
Mining bitcoin using one of Nvidia’s newest graphics cards, such as the RTX 3080, would net you $139 a month in bitcoin, according to Nicehash. As of January 2022, the RTX 3080 costs about $1,400.
According to Nicehash, if you employ a custom-built AntMiner S19 Pro, you may earn $17.79 per day. A single S19 Pro miner, on the other hand, costs about $10,000 and is only used to mine bitcoin. Over half of the Antminer 19 Pro’s revenues are spent on electricity.
It’s difficult to determine whether you’ll be able to return your investment in an RTX 3080 graphics card in 10 months or the S19 Pro mining setup in 25 months since bitcoin’s price is so volatile. As of publication time, Bitcoin’s price had decreased roughly 10% in the previous week.
The network difficulty, which determines how difficult (in computer terms) it is to mine new bitcoin, is also subject to change. After China’s crypto-mining crackdown in July 2021, network difficulty fell by 28%, making it easier for remaining miners to locate new blocks. However, this was just a blip on the radar, as the market has almost recovered to its previous highs.
In mining, scale counts, and home miners are likely to earn less per miner than a professional mining company. To fulfill their expenditures, professional mining firms often travel between nations with inexpensive energy, make agreements with local power networks, produce their own electricity, and dump out-of-date mining equipment at an alarming rate.
What Currencies are the Most Profitable to Mine at Home?
Even so, the weekend hacker has a plethora of options for mining bitcoins at home. Regrettably, there are so many options and variables that genuine comparisons are difficult.
There are certain universal truths: mining bitcoin rather than ethereum using computer chips is usually more efficient than mining with graphics cards at some point, since Ethereum favors GPU miners greatly. Ethereum is phasing out miners in preparation for its shift to a “proof-of-stake” blockchain design, so this won’t last long.
The difficulty in procuring mining equipment continues to be a severe problem. In 2021, the GPU market went wild, making premium graphics cards almost impossible to come by at market value. To make matters even more complicated, certain networks, such as Chia, rely on hard drives rather than graphics cards or computer CPUs, causing some to blame Chia mining for the hard drive shortage in 2021.
Certain profitability calculators, such as CoinWarz, are effective in displaying the profitability ratio if your hash power — the amount of computing power you employ to mine a cryptocurrency — stays constant. Based on a $1,000 hardware expenditure, CoinWarz considers the following currencies to be the most profitable:
- Ethereum
- Peercoin
- Bitcoin Cash
- Bitcoin
- Ethereum Classic.
According to CoinWarz, a thousand dollars worth of hash power would generate $20.94 in ethereum each day at a cost of $0.411 per kilowatt, more than double the $9.63 value of ethereum classic mining.
Smaller currencies may prove to be more profitable since they face less competition from other miners. The value of your returns, on the other hand, is far less predictable since the prices of smaller coins are frequently more volatile than the prices of larger coins.
Alternatives to Lonely Mining at Home
If you want to boost your chances of receiving mining rewards, joining a bitcoin mining pool is another possibility. This requires forming a group with other miners in order to increase your chances of discovering new blocks and benefiting, but it also entails splitting the gains.
