Profitability of mining in 2024

Extraction of cryptocurrencies with the help of computer equipment has not yet lost its relevance. But the profitability of mining in 2024 depends on many factors, such as the total hash rate of the collected farm. Special calculators allow you to calculate the amount of income from the extraction of digital assets.

Relevance of cryptocurrency mining in 2024

In 2024, the mining of virtual coins is very much in demand. Miners have already mined more than 19 million BTC – find out how much to mine 1 bitcoin.

This assumption is supported by 2 facts:

• The cost of graphics cards (graphics processors – GPUs, or GPU) and other components remains at a high level. The price of some models exceeds the manufacturers’ recommended price by 5-6 times or more. This trend continues c 2019.
• Miners are very quickly buying up new models of supercomputers (asics, or ASICs). It is not uncommon to buy out the first batches of equipment in manufacturers’ online stores 1-2 years before the official start date of deliveries.

Types of mining

Mining cryptoassets can be done in different ways and computer equipment. In 2024, there are 4 main types of mining:

• On video cards.
• On supercomputers.
• On cryptoasset mining farms.
• On cloud mining services.

Mining farms

This type of cryptoasset mining is more often engaged in experienced users. In this case, a mining farm does not necessarily have to be very large. It can consist of just a few cheap regs or asics.

Usually the price of mining farms varies greatly. The minimum is about $3000. Only with such investments, you can profitably mine in 2024 with the help of farms. The maximum limit is equal to the capabilities of each individual investor.

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Online mining

It is possible to mine virtual coins through cloud services. However, it is not recommended to invest savings in this type of cryptomining in 2024. Many cloud mining services are fraudulent. They charge customers but do not provide them with earnings.

The most common fraudulent scheme of services for cryptomining through the cloud is to forcibly terminate contracts with users. To do this, attackers come up with different pretexts. For example:

• Increasing complexity of cryptomining.
• Insufficient contract collateral on the part of customers.

As a rule, the pretexts invented by fraudsters are deceptions. Attackers mislead mainly beginners and seek to “pull” as much money out of them as possible.

Analyzing the prospect of mining

Before calculating the profitability of cryptocurrency mining, you should first consider several factors. For example:

• Possible risks and problems.
• Features of the mining equipment.
• The complexity of crypto mining.
• The size of the minimum investment.

Possible problems and risks

They depend on the assets chosen for cryptomining. For example, as of May 12, 2022, the profitability of bitcoin mining is reduced due to an unforeseen collapse of quotes. At the same time, Bitcoin’s price drop was followed by a decrease in the value of many altcoins as well.

As of May 12, 2022, the quotes of all cryptocurrencies are at the stage of a long natural market correction after updating the historical highs in the fall of 2021.

There is also a halving mechanism built into the Bitcoin blockchain. It halves the reward for cryptomining every 43-48 months. And although bitcoin quotes usually increase after halving, the price hike doesn’t happen immediately. The nearest halving is expected in the spring of 2024

There are problems with etherium crypto mining as well. In the second half of 2022, Ethereum blockchain participants expect the network to transition from the Proof-of-Work (PoW) consensus mechanism to Proof-of-Stake (PoS). After its completion, Ethereum will no longer need a high hashrate.

Technical Features

During the mining process, computer equipment is under high load. For this reason, before buying mining equipment, you need to consider its capabilities. Unsuitable equipment often fails. If the used equipment breaks down quickly (it will be ruined in less than 12 months of operation), the payback of mining in 2024 may be zero or even negative.

The main problem is severe overheating. You need to buy an additional cooling system and constantly monitor the temperature of the equipment used.

Complexity of mining

To get a reward, the miner of BTC coins needs to calculate a valid (valid) cryptographic hash function of the next link of the Bitcoin digital chain. The blockchain has an average time of 10 minutes to find it (may vary in other PoW networks).

As the total computing power grows, the time to solve new cryptographic functions starts to decrease. To keep the hash time at the same level, digital network developers integrate automatic algorithms to increase the mining complexity. If an individual miner does not steadily increase their processing power by purchasing new hardware, their profits will start to decrease.

Minimum investment

The amount of investment depends on the preferred type of cryptomining. The information is presented in the table below.

Payback and profitability of mining in 2024

Before you get a net profit from mining crypto assets, you first need to recoup your investment. The payback period depends on the following main factors:

• The price of the equipment.
• The hash rate value of the purchased computer equipment.
• The complexity of the cryptocurrency network with PoW.

It is worth considering the price of a conditional unit of hashrate in the purchased mining equipment. For example, the information for popular bitcoin asics is presented in the table below.

Based on the information obtained, it becomes clear that a unit of computing power of the first model costs less. For this reason, its profitability in the process of crypto mining is higher.

It is recommended to study this information before buying any mining equipment. The price of hashrate affects the speed of return on investment.

What you can save on

The relevance of cryptocurrency mining in 2024 is very high. This determines the corresponding prices of many computer components. However, there is a method of preserving part of the investment when assembling miningrigs. Participants in the crypto community often save on 4 types of components:

• Processors. A mining ring does not need a powerful processor. During mining, the CPU does not experience high computational loads. Even AMD Athlon series CPUs can be enough for a medium-powered mining ring.
• Cooling systems. Modern video cards have built-in coolers. Also, popular models often have 2 impellers for air cooling of built-in radiators. For this reason, increasing the speed of built-in fans through programs like MSI Afterburner usually eliminates the need to buy separate coolers.
• RAM. In 2024, 4 GB of RAM is enough for stable operation of budget rigs. For mining installations with a price from ₽500 thousand to ₽1 million, it is recommended to buy 8 GB DRAM. However, to build even more powerful regs, it does not make sense to buy 16 GB of RAM or higher.
• Additional equipment. Often the weight of a budget mining rig is small. For this reason, it is not necessary to buy materials to build a large strong frame. You can try to mount the ring on a stand made of improvised means that you have at home.

Additionally, for mining installations of 4 graphics cards or less, you can avoid buying impulse noise suppressors. Their purchase will be almost useless.

You can also look for legal methods of saving money on electricity. One of these is the installation of a two-tariff meter of the day/night type. In some regions of the Russian Federation, the price of 1 kW during daylight hours is greatly inflated – often by 3-4 times. This is explained by high daytime loads on city power grids. At night, 1 kW of energy can cost as little as 2 rubles.

Usually, mining equipment works around the clock. For this reason, installing a dual-rate meter can reduce electricity costs by about 20-50% (depending on the region where the farm is located).

What you should not save money on

When assembling a mining rig, you should not spare money to buy the following components:

• Motherboard. This component should have a high potential for powering the installed graphics cards. You should also look for motherboards with the number of PCI Express interfaces (connectors for connecting GPU) from 6 and higher. In the future, this will allow you to expand your rig with new GPUs. However, if the technical capabilities of the purchased motherboard will not be enough, the whole mining installation can quickly fail.
• Power supply. It provides power to the entire rig. It has a fuse that triggers in case of strong voltage spikes. But the rated power of the power supply should still be enough for the mining rig with at least 10 percent reserve. Otherwise, the rig can burn down completely due to a normal power surge.
• Video cards. Do not buy used GPUs, as well as irrelevant and weak GPU models that are not designed for high loads. Usually such GPUs fail quickly (in 1 year or less) and do not have time to “repay” the investments of investors.

Calculation of payback on Nvidia graphics cards

Before buying mining equipment, you need to know the terms of “return” on investment and net profit. Special calculators like WhatToMine are suitable for calculating payback. With their help, you can find out the potential amount of income in different cryptocurrency networks under current conditions.

Calculations through the CryptoCalc calculator for GPUs from the IT company Nvidia for May 12, 2022 are shown in the table below (taking into account the payment of average commissions of mining pools and electricity taxes).

Payback calculation on AMD graphics cards

The information obtained through the CryptoCalc service for GPUs from the manufacturer AMD as of May 12, 2022 is presented in the table below (taxes and commissions included).

Calculating payback on ASICs

To understand whether bitcoin mining is profitable now in 2024 (or other cryptocurrencies), you also need to determine the potential monthly profit when using asics. Calculated taking into account commissions and electricity taxes, the figures are presented in the table below.

Payback on mining farms

Rigs are made up of multiple graphics cards. For this reason, mining farms have a high price tag. But they generate even more profit. As a result, the ROI of rigs made of identical GPUs is equal to the ROI of mining crypto assets with only 1 of the same graphics card.

Algorithm of actions at the start

The profitability of mining on video cards in 2024 is quite high. But on average, mining with ASIC equipment has even higher profit margins. As a result, high profits motivate beginners to engage in cryptomining. However, it requires some highly specialized knowledge, so it can seem complicated. For example, even before starting, you need to perform the following steps:

1. Create a cryptocurrency wallet.
2. Identify a mining pool.
3. Select and install mining software.
4. Customize the software and hardware.

Only after performing the algorithm can you start cryptomining. At the same time, the sequence of actions in the fourth step depends on the selected software.

Creating a wallet

A vault is needed to receive coins for cryptomining. In fact, any wallet is suitable. Users can even apply hardware vaults. They are very reliable, and it is almost impossible to hack them.

The stages of creating a digital vault depend on the chosen software or a cryptocurrency machine like SafePal S1. For example, the registration of Blockchain Wallet (for saving bitcoins and other SHA-256 coins) is done according to the following algorithm:

1. Go to the official service.
2. Click on Wallet in the header of the site.
3. Click on “Start” on the loaded page.
4. Fill in the opened order form and click on Create Wallet.
5. Confirm the specified e-mail address.
6. Verify your identity using your passport or ID-card.

After the sixth step, the created wallet will be ready to work. Through it, you can buy cryptocurrency and manage your existing assets or receive mined coins to the vault address.

Choosing a pool

Digital platforms for co-mining (not to be confused with cloud services) affect the final income of crypto miners. For their services, pools take a portion of client profits – the commission. Usually, the value of service fees is equal to 1.5-2% of user income. However, some mining pools charge a commission of up to 7-10%.

At the same time, services for joint crypto mining establish their own algorithms for issuing client rewards. However, the essence of all mechanisms is the same. Services issue client rewards in fair shares. If a miner owns 3% hashrate of the total computing power of the pool, he will receive a corresponding bonus – 3% of the platform’s earnings (minus the built-in commission).

There are 2 main payout schemes in total:

• PPS. This algorithm is favored by clients because of its greater fairness to miners. However, the PPS scheme does not take into account the achieved result. For this reason, the algorithm is characterized by high fees. Sometimes they reach 7% (rarely). Platform managers with this algorithm are forced to provide commissions with large reserve funds to pay rewards to customers in unforeseen situations.
• PPLNS. This scheme is characterized by lower fees – 2% on average. This is due to the PPLNS algorithm taking into account the results achieved – the time spent. For the protracted mining of new blocks, miners receive more cryptocurrency than usual. But the PPLNS algorithm works in the opposite direction.

As a result, due to the high commissions of some mining pools, beginners often wonder if it makes sense to mine cryptocurrency now in 2024. The answer is yes. Mining digital coins remains profitable. You just need to identify a good mining pool.

When choosing a platform for crypto mining, it is important to consider 3 factors:

• The magnitude of the service’s commissions.
• The mechanism of payment of rewards.
• The reputation of the pool.

Installing a program for mining

Crypto mining is only possible through special software like Hive OS. This is due to the lack of methods of direct connection to blockchains. Also, the software helps to customize the equipment of mining farms and monitor the performance of the latter.

Some pools have proprietary software or web interfaces.

Using Hive OS as an example, the installation of software for cryptocurrency mining with video cards is done according to the following algorithm:

1. Open the software website.
2. Go to the OS tab.
3. Open the “Installation” section.
4. Scroll through the opened page to the GPU item.
5. Click on the software image download method of interest (Torrent or ZIP).
6. Wait for the download to finish.
7. Copy the software image from the downloaded archive to any external media (preferably an SSD-disk or USB-drive).
8. Use Rufus or similar software to install Hive OS.

After installing Hive OS using the image, a new disk will be available in the explorer of the operating system you are using. Launching it will open the interface of the installed software. But before using Hive OS, you need to register an account on the official website.

Final settings and startup

After installing the cryptominer, you need to connect your hardware to it through the main software interface. However, some mining pools like Antpool allow you to avoid resorting to third-party software to connect your computer hardware to the blockchains of interest. For example, Antpool has its own web interface and allows you to connect to digital networks through it.

After setting up the software and equipment, crypto mining will start automatically.

Is it worth mining in 2024

After the sudden collapse of the leading cryptocurrencies on May 12, 2022, the situation in the market of digital assets is characterized as very unstable. As a result, many beginners began to ask the question, “Is it worth it to start mining today in 2024?”.

Due to the decrease in quotations of leading virtual assets like BTC and ETH, the profitability of crypto mining has indeed decreased. But participants of popular blockchains with Proof-of-Work mechanism still earn a lot of income from mining.

If it became unprofitable, users would stop mining digital currencies.

The future of mining

Back in the fall of 2021, EMCD CEO Michael Jerlis suggested that crypto mining will exist for a very long time. For example, in his opinion, even after the last BTC coin is mined in 2140, users will continue to operate on the Bitcoin network. However, the rewards of crypto miners will only consist of transaction fees for processing Bitcoin transfers. At the same time, the value of such fees will constantly grow.

The workability of blockchains with PoW algorithm depends on miners. If all crypto miners leave, these networks will cease to exist. Also, developers of digital chains with Proof-of-Work provide mechanisms to incentivize miners. Strangely enough, among the main algorithms is halving. In fact, it provokes only the growth of market quotations of cryptoassets. But as a result, the profit of miners also increases.

Summary

In 2024, the mining of cryptocurrencies remains relevant. This is due to the high profitability even after the unexpected collapse of the virtual asset market on May 12, 2022.

In 2024 it is possible to profitably mine cryptocurrencies using 3 methods:

• On video cards.
• On asics.
• With the help of mining farms.

It is also possible to mine cryptoassets on processors. But CPU-mining often brings very low profits, and payback periods often reach 10 years.

Before buying computer equipment, you need to consider potential problems and risks. It is also worthwhile to make calculations of profitability and payback in advance. This will avoid unprofitable mining and spending money on solving problems that have arisen.

Frequently Asked Questions

Author: Saifedean Ammous, an expert in cryptocurrency economics.