Last updated January, 2018
This is a common question among people just looking at getting into gpu mining ethereum, and it’s a question I can’t give you a simple one-size-fits-all answer.
Building a gpu mining rig is a very personal decision, based on many different variables. Here are some questions that I hope will help you along the way to help you decide whether or not it’s worth it to build a mining rig.
How much money do you have to risk?
One of the dumbest things you could do is buy or build an ethereum mining rig with money you can’t afford to lose. Cryptocurrencies as a whole are still very volatile, and unpredicatable. It’s happened time and time again where the whole market, or even Bitcoin specifically, can lose as much as 30% in one day! If you have a college fund and you think you can double it via building a mining rig, don’t. It could very well double, but it could also cut your college fund in half.
In general, the more volatile the market, the higher risk it includes – which of course is why it has the potential for higher gains. Please be smart about it thought, and only put money in that you can afford to lose. Yes, if you lost it all tomorrow it would hurt, but it wouldn’t take food off your table or put you behind on mortgage payments etc.
What do you think a specific cryptocurrency, or the crypto market as a whole will do?
This is an important question to ask before jumping into buying parts for an ethereum mining machine. Take a while to figure out your numbers. If you are confident the cryptocurrency market could explore in 2018, then it could be more profitable, and a lot less work, to simply buy some coins instead of investing in a gpu mining rig.
If you think the coin price will stay flat, or even decrease over the next 6 months etc, then mining can be more profitable than simply investing in the coins.
Building, maintaining, and running a gpu mining rig is a lot of work, but it is also a lot of fun, and can be profitable too. If you don’t have the space/time/money to get into GPU mining, then consider investing instead. Plus, tax benefits for simply investing can be better – if you’re mining, it’s likely the IRS will count that as income and tax it at a higher rate than simply investing in cryptocurrencies. Investment gains are taxed at the lower rate of capital gains.
Do you support cryptocurrencies, or are you just looking to make a quick buck?
If you want to be part of the cryptocurrency and blockchain revolution, then a small mining rig is a great way to help decentralize and secure your favorite coin. Being part of it lessens the sting of losing money, or even not profiting as fast as you first calculated that you would.
If you don’t like cryptocurrencies, and you just want to get rich quick, then you probably are not going to enjoy mining through crypto market downturns when you don’t make any money.
Are you looking to start a business?
If you’re looking to start a business, then building a cryptocurrency mining rig can be a great option. Typical ‘offline’ businesses are lucky to see a 10-20% return on investment per year. In fact, anything that pays back the original investment in 10 years is considered decent. With cryptocurrencies, currently a well thought out zcash mining rig can pay back your original investment in as little as 100-200 days! Even if it was to increase to take a whole year to pay it back due to crypto coin price decreases or mining difficulty increases, that’s still way better than a typical business. What’s the risk of this worth to you compared to the normal returns of other businesses?
Can you buy mining GPUs?
Finally, with the current rage of building GPU mining rigs, it is very difficult to find a video card for your rig that is in stock, and if you can, they are typically twice the MSRP. If you can find some, and all your calculations check out, then go for it! I started small with 2 GTX 1060 6GB gpus and haven’t looked back.
Happy GPU mining!