There’s plenty that goes into crypto mining, from the value of a mining rig to electricity expenses.
First, you’ve got to take a position in expensive graphics processing units (GPUs) or application-specific integrated circuits (ASICs) for your rig.
A basic rig for a few of the lesser-known cryptocurrencies can cost you around $3,000. For the more popular cryptocurrencies, you’ll invest the maximum amount of $10,000.
The electricity costs for mining one Bitcoin can vary from country to country and state to state. The foremost expensive state to mine Bitcoin was Hawaii, with a median cost-per-BTC of over $9,000.
Still, with Bitcoin prices hovering around $35,000, that’s a small low price to procure a giant payout! And this can be why the investment opportunities for cryptocurrencies have not been better.
Profitability Before and After ASIC
Old-timers (say, way back in 2009) mining bitcoins by just using their personal computers could make a profit for several reasons. First, these miner’s systems were owned by them, so equipment costs were effectively nil. They might change the settings on their systems to run more efficiently with less stress. Second, these were the times before professional bitcoin mining centers with massive computing power entered the sport. Early miners only had to compete with other individual miners on electronic computer systems. The competition was on even footing. Even when electricity costs varied between supported geographic area, the difference wasn’t enough to discourage individuals from mining.
After ASICs came into play, the sport changed. Individuals were now competing against influential mining firms that had more computing power. Mining profits were getting chipped away by expenses like purchasing new computing equipment, paying higher energy costs for running the latest gear, and the continued difficulty in mining.