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

VforV

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Rule number 1 in crypto: never invest more than you are willing to lose.

That's for trading. For mining it's a little different, because you can always sell the GPU(s) and recoup some or a lot (depending on other factors and circumstances) of the price you paid, so it's not as risky as trading, in general.
 

Co BIY

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But now is probably a great time to roll out a new crypto that will be attractive to all the slow to the game people who will be willing to buy the mining hardware finally getting available at "normal" prices.

The anonymous Founders (none of whom will be known to be connected to Nvidia, Intel, or AMD) of course will get substantial reserved blocks of "value".
 
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bigdragon

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Buy the dip! HODL! Take it to the moon! Diamond hands! What goes down must go up! Your friends at Newegg, Ebay, Amazon, Microcenter, ASUS, Zotac, EVGA, MSI, Sapphire, and more NEED you to to keep getting into crypto! GPU prices are starting to fall! They NEED you to keep buying! Gamers [and especially crypto fans], please, spend more money! Hurry, before interest rates increase! We can't have this little pullback affect quarterly profits!!!
 
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VforV

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I think this article had the opposite effect, BTC has now risen to 40k USD.

Will we have another bull run and peak at 70k maybe, before the half year point and the ETH POS dreams of some come true, if they do this year?

Regardless, I love people celebrating crypto's death too soon, like when it reached 33k 2 weeks ago and so many were being gullible again thinking it's over and now it sits at 40k...
 

AtrociKitty

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Mining is still an attractive way to offset the cost of a new PC, even if your primary use is gaming. I wouldn't want to buy an entire mining rig today, but there's very little reason not to mine when you're not using your computer if you have a newer graphics card.
 
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Mining is still an attractive way to offset the cost of a new PC, even if your primary use is gaming. I wouldn't want to buy an entire mining rig today, but there's very little reason not to mine when you're not using your computer if you have a newer graphics card.
Or one could just wait some months for graphics card prices to potentially plummet to offset the cost of their PC. >_>

As for reasons not to mine to recoup overpriced hardware costs, harming the environment burning significant amounts of electricity for the sole purpose of paying a ransom to those price gouging graphics hardware seems like a fairly good one.

Or putting needless wear on your new hardware, making it more likely to fail sooner, perhaps when it's just out of warranty.
 
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Mining is still an attractive way to offset the cost of a new PC, even if your primary use is gaming. I wouldn't want to buy an entire mining rig today, but there's very little reason not to mine when you're not using your computer if you have a newer graphics card.
If mining demand was zero, I can almost guarantee you would have some nice cards at MSRP right now instead of 100% markup. How long does it take mining on 1 card + wear & tear to make up 100% markup? Let's take a $900 markup due to scalping @ ~$1.50 profit/day assuming you have proper efficiency setup. That's still 600 days + wear & tear to make up the money over buying the MSRP. With the complexity bomb coming, that's even worse.
 
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AtrociKitty

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Let's take a $900 markup due to scalping @ ~$1.50 profit/day assuming you have proper efficiency setup.
Your numbers are off quite a bit. An LHR 3060 Ti will profit $1.50/day right now, and costs less than $900 on eBay. A non-LHR 3080 profits triple that a day, and goes for about $1,700.

You're also ignoring the entire premise of my earlier comment. I agree, it's not worth buying a new card (and especially an LHR one) at current markup expressly for mining. But, if you buy a new card or a new PC for gaming, there's really no reason not to mine when you're not using it. You already have the hardware, and even LHR cards are still profitable.
 
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Do you expect the coming age of quantum computers will affect current cryptocurrencies? Quantum physics is fascinating to me, I hardly understand it, but having been an IT in the military and worked closely with encryption keys, I recognize the field of cryptography to be fast evolving, and question the sustainability of current cryptocurrencies.
 

VforV

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Or one could just wait some months for graphics card prices to potentially plummet to offset the cost of their PC. >_>
"Potentially"... like it was potentially for 1 and a half years now and counting?

Until I see that mining crash and the real crash of crypto I don't believe it one second.
If mining demand was zero, I can almost guarantee you would have some nice cards at MSRP right now instead of 100% markup. How long does it take mining on 1 card + wear & tear to make up 100% markup? Let's take a $900 markup due to scalping @ ~$1.50 profit/day assuming you have proper efficiency setup. That's still 600 days + wear & tear to make up the money over buying the MSRP. With the complexity bomb coming, that's even worse.
IF and WHEN and IF again, like I said above when I see it I'll believe it. One thing is sure, we will never have the "old" MSRPs again, ever. And quite possibly we will never have MSRPs again, if you look at nvidia and thier NO MSRP 3080 12GB and most likely they will do the same, NO MSRP for 3090 TI and 3070 Ti 16GB and then Lovelace if people don't lash out at them and make them change their mind. AMD will follow too if nvidia is allowed to do that.

Also, there is this presumption that everyone that mines is an idiot, like I consider those that pay 2x prices on GPUs, regardless if they mine or not. We are not all idiots... although there are plenty.

I bought my RX 6700 XT at "only" $80 over MSRP in July 2021. I would not pay 2x or more on any GPU or anything for that matter, even if I had $10000 dropped from the sky today in my lap. I don't support these prices and practices these companies are doing now, I still look for best deals and best price/perf products when I buy, but I am willing to beat them at this stupid game of high prices and offset it with casual mining, 16/7 and while I'm not gaming.
 
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Athan

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Either I missed it in my skim-read or you didn't make even the slightest effort to mention the environmental and social costs of cryptocurrency mining.

I'm not asking you for full coverage in such a technical costs analysis, but at least demonstrate you're aware of these other costs and make the effort to inform your readers about them. A single sentence with a link or two would have sufficed.
 

Endymio

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For mining it's a little different, because you can always sell the GPU(s) and recoup some or a lot
Yes, the accounting methodology of this article is entirely incorrect. Hardware costs are not "sunk costs", of which crypto-mining has almost none. From a cost-accounting perspective, as long as profits are exceeding the sum of energy costs and the hardware depreciation rate, you're making a profit. For simplicity, I'll leave off complications like opportunity cost, but in general, mining might possibly be profitable on the very first week -- not the "500+ days" of this article.
 

JarredWaltonGPU

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Either I missed it in my skim-read or you didn't make even the slightest effort to mention the environmental and social costs of cryptocurrency mining.

I'm not asking you for full coverage in such a technical costs analysis, but at least demonstrate you're aware of these other costs and make the effort to inform your readers about them. A single sentence with a link or two would have sufficed.
"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."

I guess I didn't explicitly state, "Using 111 TWh per year of power for securing the blockchain of just one coin isn't environmentally friendly and that power could bet put to a lot of better uses," because I figured that was implicitly obvious.
 

JarredWaltonGPU

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For simplicity, I'll leave off complications like opportunity cost, but in general, mining might possibly be profitable on the very first week -- not the "500+ days" of this article.
So for simplicity, you're going to assume all the money spent on hardware doesn't actually exist as a cost. That's amazing.

As a different example, if you start a restaurant and spend $5 million on the location, staff, etc. and then proceed to start turning a "profit" of $500 per day (after all expenses), that is still a really crappy business model. 10,000 days to break even on the initial investment at that rate. Sure, it's making money, but 27 years of continual work is a long time. You could invest $5 million in other endeavors that would require far less effort and earn back the investment much faster.

If you have $10,000 or $100,000 or even $10 million to invest in some business venture right now, cryptocurrency mining would absolutely be one of the riskiest approaches. Assuming you could get all the hardware you want, just for kicks let's say you go all-in on RTX 3090 systems as detailed in the article. $10 million could buy 600 such rigs... but where do you put them all, and where do you get the infrastructure to support the 1.2 MW of power draw? That's a decently sized warehouse, with a lot of air conditioning and basically a 10,000 Amp circuit. Or the equivalent of 50 houses, if you prefer. Most likely, total initial costs would then be double the actual hardware cost, all to earn a potential $13,644 per day in cryptocurrency. That's going to be around 1,500 days to break even, with nothing changing — but as noted in the article, all sorts of things will change, on a daily basis. There's no guarantee of turning an eventual profit whatsoever.

May as well just go buy 444 BTC and call it a day.
 

Exploding PSU

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Forgive my ignorance, as I simply watch the entire cryptocurrency ordeal from the sidelines, but what IF someone already has a few GPUs that could pick up the slack?

For simplicity, let's use my own GPU, a Vega 56. One of my local stores currently sells one for $700 USD (it's actually 1000 AUD but the calculator uses USD so let's just convert everything).
Punching in the Vega 56 and the electricity cost in my area (turns out it's 0.1 USD) in whattomine calculator (hope I'm using it correctly), shows it earns about $2 per day. That's $60 per month, and $720 per year. That's less than a year to breakeven, still much better than the typical business breakeven of 2 years, or my land (5 years to breakeven).

Now, let's say the guy already has 2 Vega 56s in his arsenal (already paid off itself), and he added a third one for $700. Run it through the same calculation, we're looking at $6 per day, $180 per month, breakeven time in just 3.8 month FOR THAT NEW GPU, provided the guy is willing to take no profit for about ~4 months. And let's be honest, that's still very decent.

The way I see it, it just doesn't matter. If a miner already has a couple of GPUs running, buying one is simply going to be a blip for a while when he won't earn any money, but then he'll be back in profit afterwards. Also, this means GPU prices don't matter to the miners anyway, hell even if that Vega 56 costs like $2000, if the guy already has a 6 Vega 56-rig, it's merely 4 months away from breakeven.

Which means I'll probably write in my will to my grandsons to finally buy the 6700XT in like 10 years from now. Honestly, I just don't think GPU prices will normalise, ever. Not trying to be pessimistic, but it is what it is.

The entire calculation disregards ethereum going POS, difficultry rise, and GPUs earning less as times goes on for simplicity.

What I'm saying is the article applies for someone who just getting started to mine, and thus only have his new GPUs to breakeven. For the "old players", I think it won't sting that bad.

Or maybe I'm missing something (I'm sure I have, not the first time my calculation comes up wrong).
 

JarredWaltonGPU

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Forgive my ignorance, as I simply watch the entire cryptocurrency ordeal from the sidelines, but what IF someone already has a few GPUs that could pick up the slack?

For simplicity, let's use my own GPU, a Vega 56. One of my local stores currently sells one for $700 USD (it's actually 1000 AUD but the calculator uses USD so let's just convert everything).
Punching in the Vega 56 and the electricity cost in my area (turns out it's 0.1 USD) in whattomine calculator (hope I'm using it correctly), shows it earns about $2 per day. That's $60 per month, and $720 per year. That's less than a year to breakeven, still much better than the typical business breakeven of 2 years, or my land (5 years to breakeven).

Now, let's say the guy already has 2 Vega 56s in his arsenal (already paid off itself), and he added a third one for $700. Run it through the same calculation, we're looking at $6 per day, $180 per month, breakeven time in just 3.8 month FOR THAT NEW GPU, provided the guy is willing to take no profit for about ~4 months. And let's be honest, that's still very decent.

The way I see it, it just doesn't matter. If a miner already has a couple of GPUs running, buying one is simply going to be a blip for a while when he won't earn any money, but then he'll be back in profit afterwards. Also, this means GPU prices don't matter to the miners anyway, hell even if that Vega 56 costs like $2000, if the guy already has a 6 Vega 56-rig, it's merely 4 months away from breakeven.

Which means I'll probably write in my will to my grandsons to finally buy the 6700XT in like 10 years from now. Honestly, I just don't think GPU prices will normalise, ever. Not trying to be pessimistic, but it is what it is.

The entire calculation disregards ethereum going POS, difficultry rise, and GPUs earning less as times goes on for simplicity.

What I'm saying is the article applies for someone who just getting started to mine, and thus only have his new GPUs to breakeven. For the "old players", I think it won't sting that bad.

Or maybe I'm missing something (I'm sure I have, not the first time my calculation comes up wrong).
You’re basically correct on all of the above. If you already have the hardware, sitting idle, mining can earn some money. And large-scale mining farms aren’t going to stop now just because profits are lower. But I also don’t think they’re going to look to expand — some probably will, but most will stick with what they have until they’re in the black at least.

I did note the coming POS transition for Ethereum multiple times in the article. It’s one of the three major factors listed at the beginning. We’ll have to wait and see if/when it actually occurs, and what happens afterward, because it’s impossible to fully predict. Some think other coins will pick up the slack, or that ETH will fork and miners will stick with the mineable variant, or that a new coin will be created that all the big miners will back and that will force the coin into profitability. All are possible, but none seem terribly likely. Then again, the whole house of cryptocurrency cards seems incredibly unlikely in the first place.
 

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