Thursday, December 26, 2013

Mining Litecoin and Alternative Cryptocurrencies - Estimated ROI

My last post on the ROI for mining Litecoin with the new R9 290/290X GPUs is still more or less on target -- difficulty is stabilizing for now, with an expected return of around 2 LTC per week per R9 GPU. That works out to around $45 per week, or $180 per month, so you'll have paid for your R9 290/290X in three months, give or take. But what about switching to some alternative cryptocurrency?

In roughly one week of mining, I mined about 1 BTC with 7000 KHash of GPUs. That works out to over $700 per week for hardware that you could match with seven or eight R9 290X GPUs, eight or nine R9 290 GPUs, or ten R9 280X GPUs. Now if you do the math, at present that means best case you would need $4600 worth of R9 290X cards, $4000 or R9 290 cards, or just $3500 worth of R9 280X (HD 7970) cards. Until prices are closer to MSRP, it looks like the 280X is the one to get.

Now, if current alternative cryptocurrency mining remains even close to where it's been, we're looking at roughly $2800 per month, so you'd pay off the GPUs in less than two months, and realistically all of the hardware could be paid for within two months. That's pretty darn appealing if you ask me! And you don't have to go out and buy dozens of cards in one fell swoop either -- just start with a single rig and if you go with 3-way R9 280X you could have the whole system for around $1500, and it would be paid for in about six weeks.

The problem is Hashco.ws is still in a state of disarray following the hack, so I've moved to Middlecoin for now. I switched about 5000 KHash of PCs to Middlecoin six hours ago, and at present it looks like my BTC balance is 0.0135 BTC. For a full day of mining that works out to 0.054 BTC, which would yield roughly $40 per day, $1200 per month -- not quite so rosy. I'll update tomorrow when I've seen just how many BTC I get through Middlecoin after a full day of mining, as it could still be ramping up my payouts; I'm hoping to get about twice that (0.1 BTC per day), which is closer to my previous rate with Hashco.ws.

Update: I've switched most of my systems back to Hashco.ws as the primary pool, with Middlecoin as the secondary pool. Hashco.ws is still a bit of a pain, as you can't log in to create new workers, and if you don't have an account already you're out of luck until they get the front end to their site working again. However, I'm getting payouts of around 0.075 BTC per day from Hashco.ws, and Middlecoin is typically providing another 0.015 BTC per day. So around 7000KHash/sec is generating 0.09 BTC daily, or close to $70 per day in income. Power costs are around $400 per month for my systems, but modern R9 builds should be more like $200-$250. Net income per month thus works out to $1500-$2250.

17 comments:

  1. Hello Jarred and thanks for your great insights. I would like to have your opinion regarding the future profitability trends of alt currencies, since I consider expanding my mining rig.
    With 1 MH/s it normally takes 40-55 days to generate a bitcoin by mining the most profitable coins (and then selling them to buy BTC at specific time intervals). This rate (bitcoins/day with alt currencies) has been higher in August/September 2013 with some upward fluctuations in November...do you think it will be flat, increase or decrease within the next 12 months, given that new alt coins emerge all the time? A lot of them die out but this is not problematic for me since my strategy is to sell them once per day and buy bitcoins.

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    1. It's impossible to say with certainty, obviously, but most of the alt-coin trading seems to be relatively flat, perhaps with a slight downward trend. But if you get in on a good alt-coin early (hello DOGE), you can more than make up for weeks of not-so-good alt-coins. It's more work to do all the trading manually, though, so I'm more inclined to stick with the multi-coin pools. Hashcows has averaged somewhere around 0.012 BTC per MHash per day for a while (https://hashco.ws/profits.html -- maybe a bit higher on the returns), as an example, which means about 2.5 to 3 months per BTC per MHash. Of course, you can do better than that with the right coin(s) -- I've traded for probably 2 BTC with Frozen in just two weeks (and half of that was from CPU mining)!

      Short of some major upheaval -- either scrypt ASICs or a security breach or something similar -- I think alt-coin mining is going to remain profitable for the next 12-18 months at least. And at some point, someone will probably create another proof of work function to shift the balance back to CPUs (and maybe GPUs) over ASICs.

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  2. I've also been on Middlecoin due to the Hashcows problems. My rig is pushing an accepted rate of about 2.39MH.

    Day 1 - 0.029 BTC (this was not quite a full 24 hour cycle, though)
    Day 2 - 0.034 BTC
    Day 3 - 0.041 BTC

    I'm not sure if it's ramping up due to PPLNS or something like that. Or whether it was just a good altcoin day for the pool. I think you need to give it a week or two with these things to see any kind of trend. Probably more.

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    1. Yeah -- I had around 0.067 BTC yesterday with roughly 5000KHash, so a little bit better than mining LTC directly. We'll see what the second full day of having most of my rigs at Middlecoin does for me. The current exchanged balance is only 0.045, but often it seems there's a big jump right near the end of the day.

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  3. Hi Jarred - I cannot install "Catalyst Install Manager" at all on my Windows 8.1 machine.

    I run into error "Install Package failure" all the time. I have multiple r9 290's, have tried using powered risers and without and still get this error. I also do not see any GPU drivers listed under "Device Manager".

    This is a brand new computer and have installed all drivers for everything else but just cannot for the life of me figure out why Catalyst and AMD Drivers will not install, any ideas?

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    1. Sometimes the Microsoft Visual C++ 2010 Redistributable will fail to install properly and cause this error, but things will still work. What is the specific error?

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  4. Do you have any input on whether the gains from BitCoin exchanging to cash could become an issue in regards to tax? For someone mining a couple thousand dollars of Bitcoin - $ per year, should one be concerned with the taxman? Maybe this is something that needs a new blog entry but I would like to know your throughts on this.

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    1. If you withdraw a lot of BTC money to a US bank account, you'll probably need to deal with the tax issue. I'm not sure if I'm going to receive a 1099 from any of the places I've used or not, so we'll see. Of course, all the costs of hardware and power are business expenses so don't forget to sort those out -- hiring a CPA to do your taxes might prove necessary. :-)

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  5. Hi Jarred, I know you mentioned diversify (just like real life funds) Can I ask what you do? 2-3 rigs for LTC, a couple on multicoin and all of them doing cpu mining frozen?

    Just wondering as I'm building another rig right now.

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    1. Right now I have half of my hash rate going to Middlecoin, half to Hashco.ws, and CPU mining FZ on the ones where that makes sense. (I figure if the CPU can't do at least 200KHash on the Quark PoW algorithm, it's not worth mining.)

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    2. Sounds alot of what I was thinking of doing with 2nd rig. Split it up between middle and hash. Also not sure if you saw on the FZ boards but I went ahead and setup a few Azure VMs and HP Cloud VMs to do some cpu mining, only in a limited fashion because you only get a few "free trial" credits but its a nice way to boost the FZ mining.

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  8. Hi mate!

    Have you tried undervolting R290. Im just wondering should i try to do that. I got good results with r280x 370w --> 300w. That kind of decrease would be great with r290 too. :)

    cheers

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  9. Just tried out Hashco.ws for 2 days and got worse results compared to the ltc mining i did before. My hashrate is about 1300 Kh/s, which yields about 0.33 ltc per day (~0.00955 btc) at current diffculty. With hashco.ws I mined 0.0068 btc per day. So is litecoin mining generally more effective currently? Any ideas?

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    1. The past couple of days had some odd stuff happen with Hashcows, so you might want to give them another day or two before pulling the plug. Anyway, LTC is basically a "guaranteed" stream of revenue, where alt-coins can be more variable. I had one day where Hashcows got me 0.25 BTC with 7000 KHash; mining LTC at the time would have been more like 2.5-3 LTC or <0.1 BTC, so the returns can at times be awesome.

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    2. Yeah, I got that feeling, so I am tempted to give them another try. Although the good days with hashco.ws might even out with the bad days. Well, I guess latest when LTC difficulty goes up again significantly like it did last week hashco.ws might be more profitable.

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