Mining Calculator

Estimate your potential mining return and how to calculate your profit based on different scenarios

Estimating your ROI

Calculating the returns from mining can be complicated… let’s help you out

When estimating your return on investment, there are many different factors to consider. Whilst we can’t comment on your specific circumstances we can share some information on how us here at The GPU Miner calculate our own profitability.

Let’s look at an example!

To illustrate this, we’re going to working on the assumptions below.

HARDWARE

You buy 5 of our 200MH/s Pro Miners for £22,000 (ex VAT) to have 1GH/s of hashing power on the Ethereum network.

HOSTING 

We’re going to assume all 5 rigs are hosted and we’ve prepaid so access hosting at £85 per KW. As our Pro rigs are super efficient and using ONLY 850w each, the total power usage is 4.25 KW which totals £4,335 ex VAT per annum. This is an all-in fee covering rent, cooling, setup, basic maintenance and is headache and hassle free – and it’s cheaper than running it at home!

WHAT’S MY PROFITABILITY?

So… now we need to look at how much coins we mine. Now due to mining difficulty, the amount of Ether coins our 5 miners earn will change slightly over the course of the year. It’s hard to determine the exact amount of Ether coins but we will estimate the amount based on today’s factors – and simply acknowledge this could be MORE or less than the amount stated.

In the calculator below let’s enter 1,000MH/s or 1GH/s with a 1% pool fee. We are leaving power costs, maintenance fees and hardware costs blank – because we’re paying a fixed hosting fee and will account for everything separately. We’re ONLY INTERESTED in the amount of Ether coins mined over the year.



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Putting it all together

Now we can see the number of Ether coins we mine over a year we just need to pull it all together. As mining is a medium-long term investment we’re going to assess over a 2 year period.

COINS MINED PER ANNUM

When we did our calculation, it shows 28.5 Ether coins mined per annum x 2 years = 57 Ether coins

EXPECTED FUTURE SALES PRICE

This is where we need to make some assumptions… we’re selling in the future so we’re going to ignore any current mining profitability and the current price of Ether – see below for rationale. We now Ether’s previous high was approx $1,400, but in 2 years time we expect this to be surpassed and let’s say we expect it to rise to a modest $2,000 per coin.

$2,000 x 57 = $144,000 REVENUE which is £80,930 (April 18)

 

The bottom line

Revenue: £80,930

Running costs: – £8,670 of hosting

Profit: £72,260 in 2 years which is a 328% ROI with a payback period of 6.5 months.

We still have the hardware costs of £22,000, so even if we write this off at cost, profit is still a massive £50,260. However, this is hardware which is likely to have a resale value (let’s assume 25%) so actually, profit would be in the region of £55,710 on modest estimates. As soon as you recover your cost of capital, everything earned after is PURE PROFIT

Now… if the price goes well beyond $2,000 a coin (which is certainly can do given in 2017 the value of Ether rose more than 9,382%) then your return is even LARGER.  We haven’t even got into lending out your cryptocurrency or using it for short-term trading/arbitrage further enhance your ROI. There’s a lot to consider but the above offer a simple, clear overview of the potential return of mining cryptocurrency.

Should I base my calculation on the current price of Ether?

Absolutely not. Prices of cryptocurrency change every second, and in a matter of weeks you could see swings of 200% or more… so it doesn’t really make sense to base your return on the price of cryptocurrency today – because we ARE NOT selling today. Mining is a medium-long term investment and it takes time for your miners to accrue coins.

We are selling in the FUTURE when we expect the price to be HIGHER than it is today – otherwise, if we expect the price of cryptocurrency to be lower in the future we wouldn’t even invest in cryptocurrency mining in the first place…that would be a terrible decision.

Luckily, we’re smart and believe in the blockchain and the future. The amount of investment capital which has gone into blockchain companies looking to build decentralised apps and innovative new technology on the blockchain is MASSIVE. This alone is going to positively impact the price of cryptocurrency. Compounded with the industry becoming more accessible to the majority and regulation improving security the demand and adoption of cryptocurrency is going to increase — and you guessed it — this is a GREAT thing which is going to help drive up prices.

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Mining Calculator

Take a look at our mining calculator to estimate how much you could be earning whilst you sleep. A simple and clear calculation.

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