Can Mining From Home be Profitable?

Typical 12 GPU Mining Frame

When people hear I’m involved in digital currency, the next question inevitably asked is, can I still mine from home at a profit? There are several answers. If you want to mine for Bitcoin, the straight-up answer is no. Some large industrial miners have made it all but impossible to compete. First, they buy their mining rigs at a significant discount off the retail price. Second, they always have the latest most efficient mining rigs, often before they are generally available to consumers through exclusive deals with the manufacturers. Finally, their cost for electricity is nearly free or at most a few pennies per Kilowatt hour. Mining at home means you’re paying the power company the residential, retail rate for power. In my case, that averages out to about $0.1025/kWh annually, making my operating costs roughly 3X higher than that of the industrial miners. So what about if you were to mine for alternative coins (alt-coins)?

There are four ways to mine for digital coins. You can use a generic computer that uses the CPU, an Application Specific Integrated Circuit (ASIC) based rig, a Graphical Processing Unit (GPU) card in your computer, or a Field Programmable Gate Array (FPGA) accelerator card in your computer. Today mining with the CPU on your computer is pointless; even the best Intel or AMD chip is orders of magnitude slower than the other three methods. ASIC based mining rigs are specialized for specific coins, specifically Bitcoin, and at this point, they should be left to professional or industrial miners. If you do buy an ASIC rig, it will almost certainly be an older, less efficient rig than deployed by industrial miners. What is available for sale to ordinary folks is often at least one generation behind what the big guys are using. This leaves GPUs and FPGAs for mining at home. This article will focus on GPU based miners.

There are nearly two thousand alt-coins, but those whose hashing algorithms are memory-bound makes them the most attractive for GPU miners. The recent low price of Bitcoin (under USD 8K) has put downward pressure on all of the nearly two thousand alt-coins; at this point, only one appears to have retained some degree of mining profitability, and that’s Ethereum. Using the WhatToMine.com site and selecting GPUs and picking the Radeon VII card (most affordable and efficient one out there), one can see that daily; you can make $0.36 per GPU card, after power (at $0.1025/kWh). So with a twelve card rig, we’re talking about a $4.32/day profit before taking into account the cost of the hardware. So what will that be?

Assuming we buy everything retail on Amazon, here is a complete bill of materials, it should be noted that other than the GPU card I’m not suggesting specific components, but have used average prices.

So my all-in cost, after NC sales tax, is about $7,700, and that’s assuming my labor to build this system is free. As mentioned above, this 12 GPU mining rig, when mining Ethereum, will generate $4.32/day in profit, and this is after the cost of electricity. So assuming nothing changes, and stuff always does, the return on investment (ROI) for this rig will be $7,700 divided by $4.32 or 1,782 days or 58 months, basically a car loan that pays itself off. After that nearly five year period, then, and only then, you will begin to turn a profit. As a rule of thumb, most industrial miners expect a 24 month ROI on GPU mining rigs; at 58 months, this is more than double that ROI.

Now I’m sure some miners may soon be jumping all over me, but these are the numbers today. The price of Ethereum could go up, other coins like Grin, Lite, and Raven could once again become profitable. Each coins algorithm will eventually fork (change) forcing hardware changes for some, so anything is possible. Some might suggest the buy and hold model, which says that while Ethereum mining at this price ($138) today might not be profitable if you hold onto everything you mine that perhaps in the future, it could produce a windfall. For example, Ethereum was $364 last summer so this argument might hold some water. In general, the answer at this point is no; it is no longer profitable to mine at home. It should also be noted that nearly all the energy into this mining rig becomes heat, while the rest goes into the fan noise. With 12 fans (two are in the power supplies), this setup could be very noisy. If you can duct the heat to warm your home then there could be some benefit. If you wish to remain heat neutral though, you’ll need an AC unit that can cool at least 1.5 Ton, which during the summer can be significant.