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Everyone knows that Ethereum mining is carried out using our computers. However, even if we use computers, the mining process is not as simple as we imagine. First of all, the cost of use is a big problem, such as When purchasing a mining machine, etc., the editor will carefully calculate the specific costs required for you to understand.

Our hypothetical mining rig is more efficient and profitable than some of the best mining equipment on the market today. We assume four GPUs each with 40 MH/
s. Hardware specs are four GPUs, plus a processor, a motherboard and a power supply rated at 1,000 watts. The rig costs approximately $3,000.

A reasonable cost of electricity is about 10 cents per kilowatt hour. This is lower than the national average for retail electricity prices in the United States. When running a mining rig, you're likely to pay at least 10 cents/kW per hour of runtime. This means that a full day of mining brings an electricity cost of $2.40. We will also use the block rewards and block difficulty in January 2018 as the base point. Moreover, we assume that it is reasonable to use a single rig for mining when working on a mining pool. Some mining pools take 10% of your income, but some of them only take 1% at best. For this reason, we chose a modest 1.5%.

On Etherescan’s difficulty history chart, we can run an exponential regression. This gives us an exponential growth factor describing the growth in Ethereum mining difficulty:

Based on this fit, we find the following values to describe the predicted line for future values of the difficulty function.

Using the increase in block difficulty, we can calculate that the difficulty factor will increase from 2,280,210,891,539,710 to 11,880,071,363,893,300 in one year. We do this by using a fit of the difficulty function and assuming that this fit is correct for future values.

The difficulty of the block is inversely related to the profitability of your Ethereum mining rig. This means that every day, as the difficulty increases, the profitability of the rig decreases.

Ultimately, your rig will use less electricity each day to keep power running. At this point you will have to shut down your miner as keeping it will cost you money.

Using CoinWarz’s Mining Profitability Calculator, we can plug in the increasing resistance difficulty so that the profit per day drops from $18.24 to $1.60 over the course of a year. The calculator uses the following input: Hash rate (MH
/s), Power (Watts), Power Cost ($/kWh), Difficulty, Block Rewards, Pool Fees, ETH/BTC Value, BTC/
USD value and hardware cost. For our forecast profit function, we plug a point into the calculator once a month and assume a linear fit between each point.

According to this calculator, if you started mining in January 2018, a year and a half (476 days) away, you would start losing money because the cost of running your Ethereum mining rig would be higher than the cost of generating profits (again assuming a static price in Ethereum).

Your total profit at the end of the mining rig profit is $2,916.59. However, if you back out of the initial upfront costs discussed above, you're actually investing less than you invested. You can resell your GPU to reduce some of your losses, but your rig will lose a lot of value, and that loss will only intensify as new mining rigs continue to improve at an astonishing rate, which is what GPUs are about to do in a year and a half. It has lost most of its value months ago. The resale value of your GPU will ultimately determine your overall mining investment return.

Consider this: a 50% depreciation rate (over a year) is the prime rate pegged to a $600 GPU. If you sell your GPU for $300 each, you'll make $1,200 from resale, bringing your overall revenue to $4,116.59. This means your profit is $1,116.59, which is approximately a 37% return.

How profitable is it to mine Ethereum? Looking at the value of GPUs on Amazon.com will give you a very good idea that the depreciation of GPUs can be less than $100. Even for $100, your total resale value will be $400. This would bring your overall revenue to $3,316.59 and your profit to $316.59, which is approximately a 10.5% return.

In our calculations, we also used a favorable but less than ideal electricity cost scenario. Consider the following three examples, a miner in Connecticut, a miner in Washington, D.C., and our hypothetical mining tool:

Depending on where you live, electricity can greatly affect the profitability of mining. For DC miners, even if you sell all the GPUs for $150, you can barely make ends meet.

We also excluded other potential costs from the calculation. These costs may include further expenses such as operating, cooling and maintenance costs.

Of course, the real hope of mining is that the currency you're mining (Ether in this case) will greatly appreciate in value. Obtaining Ether through the mining process may seem like an inefficient path to money.

You can choose to start by investing all of these funds in your desired cryptocurrency, in which case you will earn profits without the operational headaches of running a mining rig.

There will be an even greater threat to mining profitability in the near future: Ethereum will soon move to the Casper Protocol’s proof-of-stake model. When this occurs, it is expected to be between 2 -
Within 3 years, traditional mining will no longer work and mining rigs will be obsolete. Rig will no longer be able to create a revenue stream through Ethereum mining. Instead, profits from the Ethereum blockchain can only be made by locking up shares that are “pegged” (rather than by miners). To become an author, you will no longer need the complex hashing power of a GPU required for proof of work.

Friends who have mined before will probably know that the price of a mining machine is quite high, especially the purchase of a high-efficiency Ethereum mining machine. The cost of this alone is quite high. Small. Therefore, everyone should learn more about the costs before using Ethereum to mine, and then purchase according to their own economic situation.