It was once easy for Bitcoin miners to mine in the comfort of their homes. You only needed to get your hands on a couple of gaming computers, and you’d be able to mine a significant number of BTC. However, nowadays, mining Bitcoin seems like a pipe dream, despite the rare instances wherein a miner recently mined a BTC block solo.
The Bitcoin network has gotten so massive these days that mining operations involve warehouses full of powerful machines, and these groups compete with each other to earn the block rewards. However, there are still some ways you can make a profit from being a home miner. This article will discuss the different tools you can use to make it possible to mine crypto and earn from it.
Can You Make a Profit Out of Home Mining?
Bitcoin was the first-ever globally accessible crypto in the entire world to popularize the process of mining. Crypto mining is when you use computational power to produce a winning code (a.k.a a hash). Mining is a competition because you have to generate the code before anyone else does. The first miner to produce the code gets chosen to add a brand-new block to the blockchain.
As a reward, successful miners are offered newly-minted crypto and any fees that come with the transactions they include in the newly-added block. This type of validation system in a blockchain is called “Proof-of-Work” (PoW).
When mining crypto, there are a few liabilities you need to be mindful of, such as the coin’s market price maintenance fees, electricity costs, equipment costs, and how long it will survive against increasingly powerful miners. Your machine may be powerful now, but computer companies constantly release more powerful machines. Sooner or later, your equipment will become obsolete.
If you’re mining BTC with one of the newer graphics cards from Nvidia, like the RTX 3080, you could produce approximately $139 worth of Bitcoin in a month, as per Nicehash. However, as of January 2022, the price of the RTX 3080 is $1,400.
On the other hand, if you’re using the AntMiner S19 Pro, Nicehash says you could earn a daily profit of $17.79. However, buying one S19 Pro miner will already cost you $10,000, and it’s not good for anything else aside from mining BTC. Not only that, but electricity costs alone could eat up nearly half of your total revenue if you use this purpose-built miner.
Since Bitcoin’s price is constantly changing, there’s no guarantee that you’ll get your money back in 10 months with an RTX 3080 or 25 months with the S19 Pro. It’s challenging now that Bitcoin has been experiencing a constant downtrend.
Not only that, but Bitcoin’s network difficulty is also unstable. Network difficulty determines the difficulty level of mining Bitcoin in computational terms. The asset’s network difficulty nosedived by 28% on July 2021, when China had an intense crackdown on crypto trading and mining. In other words, it was easier for miners to discover new blocks. However, this moment was only short-lived, as the network difficulty quickly returned to normal.
Crypto mining benefits from scale, which is why home miners typically receive less profit than, say, a professional mining company. To cover the costs of crypto mining, professional mining companies typically flit between finding cheap electricity, making broker deals with local power grids, or somehow producing electricity themselves. Not only that, these companies tend to throw away outdated mining equipment at an astounding rate.
Which Coins Should You Mine at Home to Make a Profit?
Bitcoin may be out of the question, but there are still many crypto projects out there you can mine at home. However, there are so many options that it can be challenging to compare them accurately.
Nevertheless, there are a couple of truisms worth keeping in mind. For instance, mining BTC than ETH is generally more efficient with computer chips than graphics cards. This is because Ethereum favors graphics processing unit (GPU) miners. However, things will change drastically soon for the Ethereum network, as the blockchain will be migrating to a “Proof-of-Stake” (PoS) consensus mechanism.
Getting your hand on sufficient mining hardware can also pose a real challenge. The GPU market went wild during 2021’s bull run, which saw leading graphics cards nearly impossible to buy at market value. Some networks like Chia only support hard drives rather than computer chips or graphics cards. As a result, many started pointing fingers at Chia mining as the cause for the hard drive shortage during the same year.
On the other hand, profitability calculators like CoinWarz show the profitability ratio assuming that your hash power is constant. So, if you have a hardware budget of only $1,000, CoinWarz ranks these coins according to profitability:
- Ethereum
- Peercoin
- Bitcoin Cash
- Bitcoin
- Ethereum Classic
If you have an electricity rate of $0.411 per kilowatt, you could generate $20.94 worth of ETH a day if you have a thousand dollars worth of hash power, according to CoinWarz. This figure is double the amount you could produce with Ethereum Classic, which is only $9.63.
Small, lesser-known coins tend to be more profitable, but the value of these coins is also more volatile. In other words, it would be more challenging to determine the value of your returns.
According to Whattomine’s prediction, you could earn a daily profit of $1.21 mining firo, $1.07 with ravencoin, and $0.9 with sero if you use three Radeon RX 480 graphics cards.
Alternatives to Solo Home Mining
As you may have guessed, solo mining from home is a challenge that doesn’t guarantee fruitful rewards. If you want to amp up your chances of reaping mining rewards, one option you should consider is joining a Bitcoin mining pool.
Participating in a mining pool means you’ll be joining forces with other miners like yourself to significantly increase your chances of discovering new blocks, ultimately earning a profit. However, you’ll need to split the rewards among everyone in the pool.
Another option is cloud mining if you don’t have sufficient computing power at home. As always, weigh the pros and cons of this endeavor first before making any final decisions.
