There are a few ways a cryptocurrency miner can earn. They can either mine for themselves or sell their computational power. Hashing cryptocurrency can be profitable at times. When the price of a cryptocurrency increases, there will be more miners joining the network of that cryptocurrency to profit from the opportunity. As a result, the difficulty of that cryptocurrency increases, earning you less.
The amount of cryptocurrency you are going to earn is mainly dependant on the amount of hash power you have. Although, factors like price, difficulty, and power cost, all come into play here. If you are mining, your goal is to cover all the expenses with mining rewards and have some of it left as profit.
Some miners are selling their computational power as an alternative to mining. Although there could be many reasons why a miner does this, the most common reason is for profit. If the miner charges a higher rate for using his mining rig than what he can earn from mining, the profit will be higher. A miner may also lease his rig if the electricity cost is very high in the area he lives in.
Mining and selling hash power has its own advantages and disadvantages. Arguably, it can be said that selling hash power is more profitable than mining, but exactly how much more profit can you earn? In this article, we will compare mining rewards with hash power earnings.
Mining vs. Selling Hash Power
Antminer S17 Pro
You can mine or sell hash power if you have a powerful enough CPU or GPU. But in this example, I’m going to compare my Antminer S17 Pro earnings. This ASIC is capable of hashing at 53 TH/s. Although you can use Antminer S17 Pro to mine any SHA-256 coin, the following table shows my actual Bitcoin earnings from selling hash power compared with mining. Bitcoin is priced $7,352.31 right now.
|Antminer S17 Pro – 53 TH/s||Profit: Day||Profit: Week||Profit: Month|
|Selling Hash Power||0.00122 BTC||0.00863 BTC||0.03684 BTC|
|Mining||0.00106 BTC||0.00748 BTC||0.03207 BTC|
Profit is calculated after deducting electricity cost of 13.19 cents per kilowatt-hour (kWh) for both mining and selling hash power. This calculation also includes the pool fee for mining. Seller pays no pool fee when selling hash power but they do pay a service fee for using a hash power exchange like Nicehash or MiningRigRentals. For this calculation, I included Nicehash’s service fee of 2% for payouts of balances greater than or equal to 0.001 BTC.
So, judging by my earnings, selling hash power is the clear winner. You earn an extra 0.000152 BTC every day if you sell hash power. That is $1.12 at the current price of Bitcoin.
It is important to note that hash power exchanges like MiningRigRentals allow you to lease your rig at your own prices. Which means, your profit can be much higher than this. But, if your prices are too high, no one would rent it from you. The great thing about MiningRigRentals is that when your rig is not being rented, you mine directly to your configured pool. So, your computational power and electricity are not wasted.
Antminer Z11 hashes Equihash algorithm at 135 KSol/s. It is commonly used to mine Zcash as it is one of the most profitable coins to mine right now. The electricity cost is quite high where I live at 13.19 cents per kilowatt-hour (kWh). These are my actual Zcash earnings from selling hash power, compared with mining.
|Antminer Z11 – 135 KSol/s||Profit: Day||Profit: Week||Profit: Month|
|Selling Hash Power||0.0015770 BTC||0.008755 BTC||0.05232 BTC|
|Mining||0.0014702 BTC||0.010293 BTC||0.044112 BTC|
Again, if we look at the table, selling hash power was more profitable. When I mine Zcash, the payout was sent to me in Zcash. The table above shows earnings in Bitcoin. I excluded the conversion fee when I converted Zcash to Bitcoin, yet selling hash power was more profitable.
There is no conversion fee for selling hash power. Hash power exchanges like Nicehash, send payouts in Bitcoin. But, they do have a service fee of 2% which is deducted in my profit calculation.
Please be aware that earnings shown in tables are my actual earnings as of 18th May 2019. This does not mean you are going to get similar results if you compare the two. Your earnings can change with altering difficulty rates, price of the cryptocurrency, halving, among lots of other factors. But, you could reasonably say, selling hash power is more profitable than mining.
Sell Hash Power or Mine Cryptocurrency?
Why You Should Sell Hash Power
In terms of profit, arguably, selling hash power is more profitable than mining. But, if cryptocurrency price drops, none of them will be profitable. Apart from profit, there are a few reasons why selling hash power is advantageous.
The major advantage is being able to set your own prices and conditions. If your rig is not being rented, you can have it automatically configured to mine in a pool.
Another advantage of selling hash power is constant payouts. Having your own prices mean, your payout is constant as long as someone is renting your rig. MiningRigRentals is one of those services that let you set your own prices. This means you do not have to wait to get rewarded a random amount of cryptocurrency, each time you mine.
Almost all hash power exchanges send payouts daily. On the other hand, mining in a pool means you have to wait until a certain day to receive the payout. It is usually slow and no auto withdrawal is supported.
Why You Should Mine Cryptocurrency
Mining cryptocurrency is not without its unique advantages. The major advantage is low fees. When you sell hash power, you pay a service fee and a withdrawal fee. For example, Nicehash charges a fee of 2% of your total payout, if you send payouts to Nicehash wallet and a 5% fee for wallets outside Nicehash. You also pay withdrawal fees when you withdraw from Nicehash wallet.
On the other hand, when you mine cryptocurrency, you only pay pool fees. Of course, excluding electricity fees and all other expenses associated with mining. Some of the pools take 0 fees from you.
Another advantage of mining is that you can alternate between mining different coins. If you see a sudden spike in the price of a cryptocurrency, you can switch to mining that coin.
You can also mine 2 or more cryptocurrencies at the same time if you are a miner. This can be a profitable strategy sometimes.
The biggest advantage to mining is, you own the coins you mine. If the price of the cryptocurrency increases, you earn significantly higher, compared to selling hash power.
Selling hash power and mining cryptocurrency has its own advantages and disadvantages. If we compare selling hash power with mining, you could say, selling hash power is more profitable in the short term. But, in the long term, especially if the price of cryptocurrency increases, mining is more profitable.