Mining cryptocurrency can be fun and profitable at the same time. You can mine cryptocurrency with graphics cards, CPUs, or ASICs. Bitcoin was the first cryptocurrency to enter the crypto market in 2009. Back then, you didn’t need to own expensive hardware to mine Bitcoin. Your laptop CPU or GPU was good enough.
If you want to mine Bitcoin today, you would need to own an ASIC. Powerful CPUs and GPUs aren’t merely enough to mine Bitcoin. Fortunately, there are so many other cryptocurrencies that can be mined profitably with a decent graphics card.
Cryptocurrency profitability changes from time to time. How much you are going to earn from mining cryptocurrency is dependent on a few factors:
- Cryptocurrency you mine
- Hash rate of your mining hardware
- Electricity fees and power consumption of mining hardware.
- Pool fees
- The total cost of mining and mining equipment
Before we determine how much you are going to earn from cryptocurrency mining, it is essential to understand each factor.
1) Cryptocurrency You Mine
The cryptocurrency you choose to mine is crucial when estimating how much you are going to earn. There are three types of miners:
- Miners that mine the most profitable coin at the given moment and sell it for a quick buck.
- Miners that mine their favorite coin and hold it for the long term.
- Miners that support the cryptocurrency network by mining.
When asking the question “how much can you earn from cryptocurrency mining?”, we assume that you want to mine the most profitable coin at the given moment.
You may choose to mine your favorite coin and it may not be the most profitable cryptocurrency to mine at the moment. However, if the coin appreciates in the future, you can earn a lot more than mining for short term profit.
However, no one can guarantee the future price of a cryptocurrency. Therefore it is pure speculation.
On the other hand, mining the most profitable cryptocurrency at the moment can give you a rough estimation of how much you are going to make.
Check out our article on how to find the most profitable cryptocurrency to mine here.
2) Hash rate of your mining hardware
This is perhaps the most critical factor when determining how much you are going to earn from cryptocurrency mining. Hash rate is the number of hashes your hardware can generate, usually within a second. More power the mining hardware has, the more hashes it can generate.
It is important to understand that some cryptocurrencies are more profitable to mine with a graphics card than with an ASIC. Some cryptocurrencies like Monero has made it incredibly difficult to ASIC mine on their network, while other cryptocurrencies like Ethereum allows both ASIC and GPU mining.
When estimating how much you are going to earn from cryptocurrency mining, you have to decide if you are going to mine with a graphics card, ASIC, or a CPU.
Whichever you choose, the hash rate of the hardware is what is important. You can find the hash rate of your hardware with a simple google search. It is important to understand that the hash rate is different for different mining algorithms. If you are mining with a graphics card, you can check here to find the hash rate for different mining algorithms.
If you are looking for new graphics cards and wondering what is the most profitable graphics card, check out here.
3) Electricity fees and power consumption of mining hardware
If you are mining with graphics card/s, you can check here to find the power consumption of the mining set up.
If you are mining with an ASIC, you can check out the manufacturer’s website to find the power consumption.
Now you must find the cost of KWH in the area you live. You can find this easily by looking at the electricity bill or google searching for it.
4) Pool Fees
If you are solo mining, there is no fee. If you are a small scale miner, mining in a pool is the best way to mine. You can check out the best cryptocurrency mining pool for different cryptocurrencies, along with the mining fee here.
5) The total cost of mining and mining equipment
As a cryptocurrency miner, your goal is to cover the cost of mining and mining equipment with mining payouts. The power supply unit, graphics cards, motherboard, CPU, etc. can add up to a few thousand dollars. And don’t forget about electricity, maintenance, and repair cost.
The money you earn after covering the total cost of mining and mining equipment is precisely how much you are going to earn by cryptocurrency mining.
So, How Much Can You Earn from Cryptocurrency Mining?
Now that you have all the information needed to estimate how much you are going to earn, let’s calculate.
You can use a cryptocurrency calculator like WhatToMine for this. Go to WhatToMine and check if your graphics cards are listed there. If it is listed, you can input the number of graphics cards in each graphics card field. Click on the name of the graphics card to include in the calculation. See example:
Now, scroll down, enter the $/kWh in the cost field and hit calculate. You will be shown a list of the most profitable coins to mine with your graphics cards.
If you are mining with an ASIC, you can use the ASIC calculator in WhatToMine. Enter the hash rate and power consumption of your ASIC in relevant algorithm fields, enter $/kWh in the cost field, and hit calculate. You will be shown a list of the most profitable coins to mine with ASIC/s.
The first cryptocurrency shown in the list of coins is the most profitable one. The daily profit you are going to make if you mine this coin is also displayed. So, to answer the question, “how much can you earn from cryptocurrency mining?”, this is your answer.
You can now estimate the weekly, monthly, yearly profit using the daily profit. Keep in mind that the difficulty of a cryptocurrency network can increase in the future. So, extrapolating future profit using the daily profit is not accurate, although it can give a rough estimation.
It is important to understand that the most profitable coin to mine today may not be the most profitable coin tomorrow. If some other cryptocurrency becomes the most profitable coin to mine, you must switch to mining that coin.
How much you are going to earn from cryptocurrency mining is dependant on the factors mentioned above. With abrupt cryptocurrency price movements and difficulty increases, it is now even more difficult to estimate how much you are going to earn by mining. Nevertheless, we can still estimate. Check out the article: How Much Can I Earn from Cloud Mining.