Beginner Tips Regarding GPU Crypto Mining: Spring 2022 Edition

This is a non-sponsored article by an independent cryptocurrency enthusiast/miner/community member, Rustbelt.

Hi there! If you’re reading this you are probably interested in mining but not sure where to look for good advice. Instead of asking a bunch of questions on the discord or taking days to google and put things together, we’ve organized a short guide getting into mining. This is not financial advice. This is not designed to tell you how crypto works or what exactly you should do. But this is to give info about the basics and a way to think about the future of mining going into 2022. Barring any drastic change this guide should be reliable information until Ethereum goes to to proof of stake. Why the timeline? See below:

  1. If you’re just now getting into mining, the window for really scaling up into a twenty, fifty, or even hundred GPU mining farm is over. The ongoing chip shortage, supply chain issues, and demand has made the price of GPUs skyrocket to the point where the only chance you have at breaking even (not profiting) is to buy a founder’s edition NVIDIA 3060ti or 3070 card. The website is a good estimator of your daily profit. You would have to plug in your own electricity costs, but at $.15/kwh the 3060ti founder’s edition would take just under four months to pay itself off, assuming Ethereum remains around $4000 USD per Ether. Most retail sellers will not have full hashrate GPUs in stock any more and LHR GPUs, even at MSRP, will not provide as short a timeframe to a full return on investment (ROI).

  2. Why is there a window? Well because Ethereum, by magnitudes, is the most profitable proof-of-work cryptocurrency out right now. There are other currencies that use proof-of-work (meaning that the actual calculation is done on hardware) like Ethereum Classic, Ravencoin, or Ergo. However, these currencies are not as profitable right now. The bigger issue is that the majority of the GPU hashrate (meaning the all of proof-of-work capacity on a cryptocurrency’s network) in crypto is on Ethereum. Ethereum is planning to transition away from proof-of-work by June at the latest. That date may change, but as of mid-December 2021 that is the latest deadline for the end of proof-of-work on Ethereum and the transition to proof-of-stake may actually come earlier. If you want to know more, look up things like “mining difficulty,” “blocks,” “DAG size,” and “ASICs.” The long and short of it is that there are so many GPUs in the world that can mine the most profitable cryptocurrencies. Older coins like Bitcoin, Litecoin, and Dogecoin can’t be mined using GPUs. That means that all of the GPUs that are mining Ethereum will be forced to switch to other coins. As of mid-December, there is roughly fifteen times as much hashrate on the Ethereum network than Ravencoin, for example. The rate of payout for proof-of-work coins is largely based on how many people there are mining, so if everyone mining Ethereum goes to other coins, it means that the rewards for the other coins will decrease quite drastically. There may be a time after spring 2022 in which it’s profitable to mine another coin, but the expectation is that miners who have not paid off their GPUs may sell them off to cover their losses, causing a dip in GPU resale prices. This is all speculative, though.

  3. Before you ask “really?” Yes, really.

  4. So what do you do? Well if you want to get into crypto right now it may be a better call just to buy a good coin and stake it. Here’s a good guide on what it means to stake a cryptocurrency. If you already have a GPU, here is a good guide to get started on HiveOS or Nicehash.

Are you curious about how Cryptocurrency (specifically Ethereum) works? This visual breaks it down quite well.
Feel free to come check out #crypto-and-mining in!

Disclaimer: Nobody knows the future, and getting involved in cryptocurrency can be a very high risk. Do not play with more money than you can afford to lose!