Ethereum Mining- How Much Does it Cost!?
While I am generally a bitcoin bull; however, I am a big fan of Ethereum as well. I see great potential in its use case and community that has been built up, but most importantly for me; I see great potential in it as an investment.
Recently the price of most cryptocurrencies have been soaring. This means that I have not been able to accumulate my two favorites; bitcoin and ethereum as quickly as I have been able to in the past. This has led me to search for alternative options to find ways to accumulate as much of these coins as I possibly can. For bitcoin I have been lending out more and more to custodial lending services such as BlockFi and Celsius. While there is admittedly risk with doing this; personally after the research I did was fine with the risks at present time to help jumpstart my portfolio growth even more.
For ethereum I have been staking ETH 2.0 over on Kraken. While the interest rates have been quite great, helping me to receive more ETH than I would if I was lending out to other services. Admittedly my ETH stack is much smaller than my bitcoin holdings as I had focused completely on accumulating as much BTC as I could to reach my portfolio goals. But as I mentioned above; I am a big ethereum fan as well and naturally I wanted to grow my ETH holdings as well. But in the last 5-6 months ethereum has done a 4x in price and now much more capital is required to accumulate decent amounts that would satisfy me.
So I began looking for alternative ways to get more ETH. I was spot buying, converting my blogging earnings and more, but it still wasn't enough. And then I started researching more into ethereum mining and found out that the market is really booming right now; largely due to the record-high prices and fees. While there may only be 1-2 years left that one can mine ethereum before the chain completely changes to a proof-of-stake blockchain. That still gives myself quite a lengthy amount of time to turn a profit from my initial investment, and make a large amount of ethereum as a passive income. Earning far more than I would be able to buy if I had just stuck to spot purchases.
I did make a post about a week ago talking about my new plan to get more ethereum through mining and many people had come to me asking for what I was using to mine. So I thought I would go through piece by piece what I am using to mine Ethereum, how much It costs, and finally how much this set up will allow me to earn in ETH at the current time.
So let's talk about how much it costs to get into ethereum mining.
Motherboard -
(Market Cost = $100-$400)
This is naturally what everything is connected two and is the heart of your mining computer. The price here can vary quite a bit depending on which model you decide to go with, anywhere from $100-$400. Luckily through a connection of mine I was able to get this part for free, which helped me to save a lot of money and also will help me to become profitable from mining much faster.
My Cost = Free
GPU-
(Market Cost = $1,500-$2,000+)
If the motherboard is the heart of the mining machine, the gpu is the muscle behind it. This is a large part of what is going to determine what hashrate you are able to pull; which is what will determine how much ethereum you are able to mine. And this is what is going to cost you the most money. I decided to go with the AMD Radeon VII, which will net me about 100mH/s. Running one of these would net me about 0.17-0.20 ETH a month, but I decided to initially buy 2. So it will net me about 0.34-0.40 ETH a month. The market for these is quite insane right now actually, and have seen a large price spike because of that. Just a few months ago you may have been able to regularly find these for under $1,000, but now they are often going for over $2,000. Thankfully I was able to find 2 at an average price of $1,150 each.
MY COST ($1,200 x 2 = $2,400)
Power Supply -
(Market Cost = $150)
This is what feeds power to your machine. If your power supply isn't powerful enough, it won't be able to turn on and run. I bought an 850w power supply which should be enough to run 3 gpu's of the model that I bought. After that I will need to either upgrade the power supply or start a new mining machine. You can find cheaper models here, but it is best to find a well-reviewed model, because this is something that will make your machine safer and hopefully prevent fires.
MY COST = $150
Keyboard - (Market Cost = $8.00)
Perhaps many people will already have a keyboard laying around the house and will not need to buy this, but I didn't and so I had to buy one. You can save money here by going very cheap, and will only be used when you are initially setting up the machine.
MY COST = $8.00
Mouse - (Market Cost = $5.00)
This is the same as the keyboard just above. I didn't have an extra mouse and so I had to buy one. It is needed for the initial setting up of your system and you can use the cheapest model that you can find.
MY COST = $5.00
RAM - (Market Cost = $50-$100)
MY COST = FREE
GPU Risers - ($40--$100)
If you are only using one GPU you won't necessarily need this, but after you buy more than 1 you will need gpu risers.
MY COST $60.00
Ethernet Cord - (Market Cost = $10.00)
For a more consistent internet connection it is recommended to have your miner connected via an ethernet cord. Because my machine will be placed quite far from my modem, I needed to buy quite a long ethernet cord. But again you can buy a cheap cord as it won't affect your mining rate as long as your connection is stable and decently fast.
MY COST= $15.00
Hard Drive -
This is needed to have your operating system on your machine, and also the mining software itself. As long as you have enough storage and works fine almost any model is fine for this. You can go cheap here. Thankfully again, I was able to receive this for free from a family member.
MY COST = FREE
Electric Cost -
This is key make or break think that will determine how profitable a mining machine can be. I will fully admit that the electric cost in the area that I live is definitely not cheap and will cut into my earnings quite a bit. But thankfully the price of ethereum is at all-time highs, and the transactions fees are high as well, allowing this to be quite a profitable venture for me. But it is very important to know what the electric costs in your area are, and how much your machine would use before even deciding to begin mining. For my two GPU's that I will be using, I'm expecting it to cost me just about $100 a month in electric costs. And in the future I am planning to add a third gpu, which only will make it increase even more. But it will be different for the area that you live in.
MY COST = $100/month
Monitor -
On a side note, when setting up your mining machine it will need to be connected to a monitor. You can choose to purchase your own monitor and always have it connected to it, or just initially during the set up. Personally I will just connect mine to my TV during the set up and save the money that I would have otherwise used to buy a monitor.
MY TOTAL COST = $2,638 + Monthly $100 Electric Cost
With the machine that I currently have I should be able to mine approximately 0.40 ETH per month. With the current price of ethereum that would equal to about $700 a month worth of ethereum. Then subtracting the $100 electric charge, I will be left with a $600 profit each month. But, I did have to make an initial investment of $2,638 to purchase my machine and get it running. So at current prices it will take me about 4 months before I enter pure profits. Naturally if the price of ethereum would go down it would take me longer to turn a profit.
But I am expecting the price of ethereum to rise even more, which would make me profitable much faster. In the future I am hoping to add a 3rd gpu and possibly a 4th. I'm trying to maximize my ethereum accumulating before the price goes up even further. I also plan to lend out my mined eth to platforms like BlockFi to boost my earnings even more.
So are you interested in getting into Ethereum mining? It is rather expensive to initially get started, and I want to know if you think it is worth that investment or risk!?
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As always, thank you for reading!
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