$1,000,000 Question: Is Mining Worth it?

$1,000,000 Question: Is Mining Worth it?

By LeftAntiPC | Left AntiSJW | 9 Aug 2020


Mining has been around the crypto world from the beginning, and yet, it is now out of reach for almost everybody. Mining farms in 3rd world countries with cheap electricity dominate the mining business, increasing difficulty and inconsistent value make it hard to predict whether mining is worth it or not, and different coins are more difficult to mine than others. I've been intensely researching this topic for the last few days and have come to the conclusion that mining...basically isn't worth it for 99% of people. 

CPU and GPU mining is so slow now that you are going to spend more money on power than you'll get in whatever coin you are mining - often by a margin of 10 to 1. Even ASICs, the computers made to literally only mine, are often not worth it. They are expensive, and as they become more popular coins become more difficult to mine, making their returns quickly decrease in value. The way one Youtuber put it was "If you can get one of the first batch of ASICs - basically in the first one to three months they are out - you might make some money". However, brand new high quality ASICs can run 1,000s of dollars. 

Now let's talk opportunity costs. Let's say you buy a brand new $1,000 ASIC. Let's also say that you are mining some coin with it that is extremely profitable. You are making $200 a month doing this (nearly unheard of for all but the most expensive rigs). Let's also pretend that, somehow, even though it literally defies the most basic principles of mining, nobody else busy ASICs like this and the difficulty of this coin does not increase, so you keep making $200 a month rather than seeing diminishing returns like you would in real life. In five months, you are back to where you started - you have only paid off your $1,000 machine. What if you had instead invested that $1,000 in just directly buying a coin, like Ethereum?

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Even if you had only done that one month ago, you'd now have over $1,600 of Ethereum. So would you rather have $0, or $1,600?

Don't even get me started on cloud mining - it's basically a scam that takes advantage of people who don't understand how mining difficulty increases over time, and thus the amount they make the first month will drastically decrease over the term of the contract. 

Think logically - if cloud mining or ASICs made more money than they charge to buy one, then the people who have that hardware would just use it to mine for themselves instead of selling it. 

I've looked at mining Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Dash, and Monero, and so far Monero is the only one where I could actually "make" money mining it. Monero is designed to be ASIC resistant, which I appreciate. They basically want to have people mine with CPUs or GPUs, which I really appreciate. Still, if I could get power for free, I'd only be making around $40 a year on my (admittedly non-specialized) rig. Taking into account the wear and tear on my CPU, which would have to run at almost 100% usage for an entire year straight, it just isn't worth it. Not to mention, it's worth losing $40 a year to actually be able to use my computer to do things I want at a reasonable speed. 

I wanted to write an article on how to mine when I started looking into this, but I'm afraid I just didn't find any good news to share. To me it looks like mining is essentially dead for everyone who can't get either free electricity, or can set up a mining farm with 100s of GPUs or ASICs. Like I said though, I only intensely researched this for a few days, so there are others out there who know more. Please do comment if you think you have a realistic way of making money mining, I just haven't been able to find one.


LeftAntiPC
LeftAntiPC

Left-Leaning, Pro Free-Speech, Anti-PC Culture


Left AntiSJW
Left AntiSJW

You don't have to be right-wing to see the harm that modern PC culture can cause.

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