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Monday, January 11, 2021

GPU Cryptocurrency Mining Profitability, January 2020

Bitcoin is up, and mining is making a comback. Again. At least for the time being. If you're looking for advice on the best GPUs for mining, right now, here's my breakdown and analysis, based on testing over the past few days. These are the best GPUs for mining cryptocurrency, which currently means Ethereum. I'm putting prices in as MSRP, which you probably won't find anywhere for many months. But these are theoretically prices you could pay if supply was keeping up with demand. Adjust your expectations accordingly!

All of my values are based off mining via Nicehash. That's because, frankly, I want either Bitcoin or Ethereum, not one of the other potentially garbage coins. Plus, you can easily trade BTC or ETH for a different coin if that's what you're after. You can probably earn 10% more via mining ETH directly, but then you have to manage things more and it's frankly a pain I can't be bothered to deal with. I use a standard cost of $0.10 per kWh for power, with my own power measurements taken at the outlet, using an 850W 80 Plus Platinum PSU.

Component $ per Day Power per Day Profit Break Even
GeForce RTX 3090 ($1499) $7.50 $0.96 $6.54 ~229 days
GeForce RTX 3080 ($699) $6.50 $0.86 $5.64 ~124 days
GeForce RTX 3070 ($499) $4.50 $0.62 $3.88 ~129 days
GeForce RTX 3060 Ti ($399) $4.40 $0.58 $3.82 ~104 days
GeForce RTX 2080 Ti ($1199) $4.40 $0.72 $3.68 ~326 days
GeForce RTX 2080 Super ($699) $3.40 $0.61 $2.70 ~259 days
GeForce RTX 2070 Super ($499) $3.30 $0.52 $2.69 ~186 days
GeForce RTX 2060 Super ($399) $3.10 $0.48 $1.82 ~154 days
GeForce RTX 2060 ($299) $2.30 $0.48 $1.82 ~164 days
Radeon RX 6900 XT ($999) $6.00 $0.84 $5.16 ~194 days
Radeon RX 6800 XT ($649) $5.25 $0.84 $4.41 ~147 days
Radeon RX 6800 ($579) $4.50 $0.72 $3.78 ~153 days
Radeon RX 5700 XT ($399) $4.00 $0.66 $3.34 ~119 days
Radeon RX 5700 ($349) $3.75 $0.55 $3.20 ~109 days
Radeon RX 5600 XT ($279) $2.70 $0.48 $2.22 ~126 days

So, there you have it. If you could buy the GPUs, the best options right now are the RTX 3060 Ti and the RX 5700. Neither one is readily available at the pricese listed, and we could see prices more than double the MSRP in the coming months, depending on how things develop. But if you get the right hardware, assuming you already have a PC, breaking even on the GPU in just four months still looks possible. At the outside, you might break even in a year. Assuming of course that Bitcoin doesn't go tits up again.

The Rise and Fall of Bitcoin, Round Four

The only thing predictable about cryptocurrencies at this point is that they're unpredictable. Sure, there are larger patterns that repeat, but knowing when a new swing up is starting, or a new trend down is on its way, is tricky business. The past month has seen Bitcoin eclipse the previous high of 2017, followed by a surge to more than $40,000. That appears (maybe!) to have been the peak, as prices dropped over 20 percent just today (Jan 10, 2020). Will Bitcoin and the other cryptocurrencies rebound and head back up? Will they collapse back to early 2020 prices? I could guess, but then I'm no better than the rest of the pundits. All I know for certain is that cryptocurrencies are extremely volatile, the past month or two being a prime example of that volatility.

I've spoken with a few people over the past week who basically wanted to know what I thought about Bitcoin. One is an investment advisor, and naturally people he advises right now are asking about Bitcoin. Others were computer enthusiasts wondering if now is the time to start mining. My answers to both were somewhat nebulous, but I'll share them here.

Should you invest in Bitcoin or any other cryptocurrency, right now? No, I don't think so. We're already far into the surge upward, and the inevitable collapse will eventually follow. As fast as Bitcoin rocketed to $40,000, it can drop back to $10,000. Since we're still at about $33,000 (update: now past $50K), I wouldn't want to get caught holding the bag. Maybe we'll see $50K before a crash, maybe even $100K! Maybe not.

Longer term, you could still buy in today and very likely recoup your investment in the coming years, but history suggests we'll see $10,000 long before we see $100,000. Wait for the next drop, and if you still want to buy into Bitcoin or some other cryptocurrency, that's the time to make your move. Play the long game, buy when it's low, sell when it's high, but don't buy everything and don't sell everthing — I'd sell 25, 50, or even 75 percent right now, then set a target where you'll buy back in with a similar 25, 50, or 75 percent of what you put aside.

If you have 1 BTC today, then, sell half of it for $20,000 (give or take) right now and keep the other half. Then plan on buying $10,000 worth of BTC when it reaches your desired threshhold, like maybe $10,000. That theoretically gets you $10,000 of profits, plus increases your BTC holdings to 1.5 BTC. Do that a few times over the coming years and you could end up with $50,000 in the bank and 4 BTC or whatever.

As for mining, if you have the hardware available (meaning, a graphics card), I figure any time the net gains from mining are at least double the cost of the power you put into it, that's an okay time to mine. Right now, a GPU that uses perhaps 350W of power (including the rest of the PC) can generate about $5-$7 per day of BTC, using Nicehash. The power cost for running such a PC 24 hours a day is going to be 8.4 kWh, so if you pay $0.12 per kWh, that's $1 per day in power, which means it's a good time to mine.

If you pay $0.30 per kWh, that's $2.52 in power per day, which means it's still a viable time to mine ... but you really ought to consider lower power locations rather than mining in California or Europe or wherever. Cheap power can get as low as $0.05 per kWh, which means it's usually far easier to turn a decent profit.

But more on that in my next post...