How to calculate the profit from mining cryptocurrencies?

If you have ever heard of cryptocurrencies, you have probably heard of mining. The only way most cryptocurrencies can function is through mining. Without miners, the blockchain cannot be verified, and it has to be done every time someone wants to make a transaction. Without this operation, it is impossible to know which transaction meets the rules and which does not. When you become a miner, you will be rewarded for this work, which is based on two things: Reward per block Transaction Commission. For example, whenever you decide to transfer bitcoin, ETH/Ethereum or any other currency you use, you will probably notice an additional fee, which may be called “transaction” or “mining” – it depends on your wallet. This fee is added based on which miner “cracks” the code and completes the block. While this reward is not significant at all, the main reward is the “block reward,” which for bitcoin is 12.5 BTC/BItcoin, which equals a whole $76,250.

The economics of mining

It is relatively easy to start mining, especially if you already have a desktop PC with a video card. Creating a mining farm is the most costly part, as they can cost thousands of dollars. The next cost is the cost of electricity, although this should not be a problem if you avoid inefficient video cards (cards with low hash speeds and high power consumption). On this site you can calculate how much you will spend on electricity each month. Here you can figure out how many watts your computer will use and how many kWh you will have to pay per month. Once you’ve calculated the average monthly number of kWh, multiply that figure by the rates, so you’ll know the full cost. Subtract that monthly cost from the cost of wage currency, and you’ll get your monthly income. Double-check yourself both on automatic calculators and manually, the amounts should match, otherwise you will be in for a surprise in the end.

Calculation of cryptocurrency mining profitability

Profits from cryptocurrency mining depend on many factors: cryptocurrency prices, block fees, hash rates, electricity costs, maintenance costs, and so on. Due to the high volatility of each of the indicators, it is especially important to monitor and record your income on a monthly basis. To calculate your net profit from mining, subtract the costs from the total mined remuneration, which includes electricity costs.

In general, the formula looks like this:

Profit = total income – energy costs
Electricity costs = (power consumption) ✖️ (number of operating hours of equipment) ✖️ (electricity tariff)

And to find out how quickly the equipment will pay for itself, you need to divide the cost of the equipment by the net profit per month. This classic calculation scheme allows you to calculate the net profit from mining in just two steps. Well, if you do not want to count by hand, you can use the many services to calculate the profit. With their help, you can easily calculate the real profit from mining now and in the future for several months ahead.

The formula for calculating the monthly profit from mining:

M – W = P

M is the value of coins mined per day, they can be found, for example, on coingecko.
W – is the amount you will spend on electricity each month. You can use it to calculate
P – is your monthly income.

You can also determine your daily profit by entering the cryptocurrency mined per day in the M field and the daily energy usage in the W field, the same can be done for weekly calculations as well. In this case, to know the real profit, first you need to pay back the first investment in the farm.

Calculation of the required time to mine coins:

C / P = D

C – the cost of the mining computer,
P – is the same as above (monthly profit),
D – is the time it takes to pay off your computer costs, in months, weeks, or days. It depends on what you use for the first calculation.

Once you have paid off the farm, every cent you make over and above that will count as total profit.

Mining profit calculators

What To Mine Calculator (http://whattomine.com/) is the most useful calculator for mining. Here you fill in your video card models and the site calculates power, hash, and the most profitable coin under given conditions. It will even show you the best exchange rate for selling coins. In addition, the site will also apply reasonable overclocking to video cards, making the results even more accurate. Overclocking is extremely useful when mining, so think of it as o “free performance”. The only drawback to this site is that it has information on 11 different graphics processing units (GPUs) and none on central processing units (CPUs). Also, you can’t pay for pools. This site is handy for choosing the most profitable coin to mine.