How much can you make mining Ethereum? This concerning question is stuck in many peoples mind. And they have asked me a number of times to provide them with the answer.
So, in this article, I’ve decided to answer to one of the very basic and the first question beginners have. And that is, how much can you make mining Ethereum?
Mining Ethereum is not a task which involves setting up a mining rig and then waiting for Ether to flow in.
If you’re thinking you’ll just set up a mining rig and you’ll turn rich. Then let me tell you that you’re totally wrong.
Setting up an Ethereum mining rig requires the right information about the world of Ethereum mining.
Without having the knowledge of the basics and some advanced concepts, you’re likely to end up investing your money in the wrong mining rig.
So, without wasting any time, let’s first start with the basics.
What is Ethereum?
Ethereum is a decentralized blockchain based platform featuring smart contracts.
With the help of Ethereum, you can create any software or any application. You can also create or build your own startup or a company from scratch.
You also have the freedom to invest in your own projects, and if you do not have the required money to invest, you can complete your projects through writing smart contracts.
The above sentence might confuse you a little, but this is what Ethereum is all about.
There is a lot more to explain, but I’ll rather focus on explaining only the important things.
What is Ether?
Ether is the token name of Ethereum. Every cryptocurrency has its own token name.
And the token name is the name of the cryptocurrency.
In the case of Ethereum, Ether is the token name.
With the help of Ether, you can carry out smart contracts in Ethereum.
Or, you can also buy, sell, trade and invest using Ether for profits.
What is Ethereum mining?
Ethereum mining is the process of solving complex math-associated problems.
When you set up a mining rig, you basically are spending your resources to solve these math problems.
These math problems are dispensed by an organization or a single person. Upon completion and fixing of the math problem, you are awarded a block of Ether, Generally known as proof of work.
Ethereum Mining concepts
What is Hash rate?
A mathematical problem which the miner needs to solve is considered as a hash. The speed or the rate at which the miner solves the mathematical problems is called a hash rate.
The higher the hash rate, the faster and more mathematical problems the miner will be able to solve.
If you solve more mathematical problems you’ll get more Ethereum.
What is mining difficulty?
This is an estimation of how tough it is to solve a mathematical problem.
As more miners join the network, the hash rate increases, and as the hash rate increases, more difficult it becomes to solve a mathematical problem.
The Ethereum chain provides a uniform quantity of Ether coins every several minutes.
So, if the difficulty increases, the chances of making more Ether decreases.
Cost of running a mining rig?
Cost of running a mining rig is nothing but the cost of the Electricity.
When you create or build a mining rig, you use very powerful resources to run and compute the mathematical problems.
To support the consistent working and solving of the high resourced mining rigs you’ll require a high amount of electricity.
The amount you spend on the electricity should be calculated for your returns.
If the power consumption is more and the electricity bill is high, and if the mining difficulty is also high.
You’ll just end up paying electricity bills and you’re less likely to make any profits form Ethereum mining.
In easy terms, Mining is beneficial if the difficulty level is low and the mining rig’s hash rate is high.
How much can you make mining Ethereum
Let’s consider a few example of Ethereum mining rigs.
1. Radeon R9 295X2
This mining rig costs around $600 which provide 46.0 MH/s of hash rate.
The power cost it requires per day is set to around $1.45 with a return per day of $1.61 with cost per MH/s of $13.04.
Which when calculated will give you a profit of somewhere around $590 per year
2. Radeon R9 HD 7990
This mining rig costs around $680 which provide 36 MH/s of hash rate.
The power cost it requires per day is set to around $1.08 with a return per day of $1.29 with cost per MH/s of $18.89.
Which when calculated will give you a profit of somewhere around $469.40 per year.
3. Geass ASIC Miner
Let’s consider you have a mining rig which has powerful resources.
This mining rig costs around $2289 which provide 200 MH/s of hash rate.
The power watt it requires is somewhere around 800.
With medium to average mining difficulty, using this miner you’ll be able to make.
- 0.050 ETH per day, valued at $15.
- 1.497 ETH per month, valued at $451.
- 18.215 ETH per year, valued at $5,489.
Note: The above calculations are made based on Medium to average mining difficulty.
The mining difficulty increases frequently. So, the amount of ETH earned can be less compared to the data I’ve provided above.
Important note: Ethereum is planning to switch from a proof-of-work to a proof-of-stake this year. Which will stop Ethereum mining.
It is best considered to mine ETC other than mining ETH.
Because ETH will move to a proof-of-stake and will stop all mining activities yet, as ETC is a part of Ethereum you will be able to mine ETC.