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. 

The best-case scenario for breaking even right now is around 520–550 days. That could be accomplished with the Radeon RX 5700 XT or 5700, Radeon RX 5600 XT, GeForce RTX 2060 Super, or the RTX 2070, using current prices. This of course assumes static profitability and the continued mining of Ethereum, neither of which are likely. For nearly all GPUs, Ethereum remains the most profitable option, with the next best choice typically averaging 33% less income. What that means is that in the coming months, if Ethereum goes through with the proof of stake change, miners could be looking at closer to 780–825 days just to break even, assuming all of the hardware remains fully functional.

That's at the "good" end of the spectrum as well. If you wanted to blow nearly 17 grand on an RTX 3090 setup, the current rate of around $4 per day per GPU means it would take 731 days to break even mining Ethereum. Without Ethereum, you're basically looking at three years of continuous mining to recover the cost of the hardware purchases.

And that's just for the cost of the mining rig, which of course doesn't exist in a vacuum. You also need space, infrastructure, internet, and cooling to keep everything running, especially in the warmer summer months. You also need someone to put everything together, maintain the hardware, and troubleshoot any problems. Those costs could easily double the expense, meaning double the amount of time to break even.

Just for clarity, here's the sample mining rig we're using for the above calculations, which uses six GPUs per PC. We have a motherboard that supports six PCIe slots (two x16 and four x1 slots), six riser cables, storage, memory, a modest CPU, and a good power supply. 

That's $758 as a baseline, not including the graphics cards and whatever extras might be needed to put it all together. Realistically, the cheapest approach is probably a bunch of zip ties to secure everything in place. We'll leave that as an exercise for the potential miner, because the whole point is that this really isn't going to be a great money making proposition.

With the above setup, after tuning for optimal efficiency, you could run six budget to mainstream GPUs (<150W power each), or if you want to chase higher hash rates, adding a second PSU would allow for up to six extreme GPUs like the RTX 3090 or RX 6900 XT and increase the cost by $220.

Mining on a Laptop?

As bad as that all sounds, there are even worse ways to try to mine cryptocurrencies. At the height of the crypto bubble last year, we reported on some places setting up mining farms using laptops. It was a stupid and short-sighted idea then, and it's an even worse idea now. The RTX 3080 mobile as an example is basically equivalent to a desktop RTX 3070, meaning best-case (i.e., without an LHR limiter) it could do perhaps 60 MH/s on Ethereum. With the limiter, it would be closer to 40 MH/s or less.

The problems with mining on a laptop are numerous. You have to pay for the entire system, and you only get a single GPU miner in the process. The cheapest RTX 3080 laptops typically cost more than $2,000 — twice as much as you'd pay for a similar performing desktop card. Even worse, cooling on a laptop most certainly isn't designed to run 24/7 at maxed-out loads. Even if we take the higher hash rate, you'd be looking at roughly 1,000 days to break even at current rates. Use the lower 40 MH/s value and that climbs to about 1,500 days. Then take away Ethereum mining and we'd be looking at perhaps 2,200 days to break even.

Raise your hand if you actually think a gaming laptop will run at 100% GPU load 24/7 for six years straight. Anyone with your hand up, I've got a sure-fire business proposition that will only require a modest investment…

Just Say No to Mining

The bottom line is that, as good as things might have looked in early 2021 for cryptocurrency mining, we knew it wouldn't last, and it didn't. There are of course pundits predicting the next big wave of cryptocurrency fever, and maybe they'll even be right. That's the problem with unregulated and pseudo-anonymous commodities like crypto coins. Maybe in a few years we'll see Bitcoin break $100,000 and Ethereum at $10,000 or more! Equally possible — more so in the minds of many people — is that this whole funny money scheme will prove unsustainable and many people will lose whatever savings they put into it.