If you have come across this article, I’m sure you’ve been following cryptocurrency rather closely in the past few months.
With the recent bitcoin surge at the start of 2021, we don’t blame you for trying to jump into the game now and find a way to make some money.
While most people are going to simply buy cryptocurrency and then hold it or day-trade it, there are other ways to go about obtaining these coins.
This is a process that is known as GPU mining. GPU mining will help get your cryptocurrency without paying for it, presenting you with a solid way to get passive income.
Don’t think you are going to go to sleep and wake up with a full bitcoin however. GPU mining is extremely intensive, and it is quite slow as well so your returns are going to be minimal. The question to ask then is GPU mining worth it in 2021?
It definitely was worth it back in 2017 when the first crypto bubble existed, so it’s now time to take a look at mining again and see if you can profit off of it. Before we talk about that though, let’s give people a brief description of what GPU mining is.
What is GPU Mining?
Crypto mining is the process of solving complex cryptographic equations using the power of your computer. When the equations are solved, you are given a bit of the cryptocurrency as a reward. However there is a catch to this which we will discuss later.
To get involved in crypto mining, you are going to need an application-specific integrated circuit (ASIC) and a CPU or GPU.
While CPUs can mine for crypto, compared to the power that GPUs have nowadays, they are extremely inefficient, therefore you should stick with the GPU for mining.
When bitcoin mining or cryptomining, your GPU is going to be using all of its current power to process and solve the complex math problems that are on the blockchain.
In all instances, you are not going to be the only one working on one of these equations. There are going to be thousands of people working on it at the same time and they are all competing with each other.
We do want to note that if you plan on using you are going to be GPU mining, you are going to be putting your GPU under an extreme load.
It is going to get quite hot and its fans are going to have to work extra hard to keep it cool. In most cases, GPU mining shortens the lifespan of a GPU and can cause it to burn out sooner than it normally would.
What Can You Mine?
When it comes to the process of cryptomining, not every cryptocurrency can be obtained. As we alluded to above, you can definitely use your GPU for bitcoin mining.
Other popular cryptocurrencies that can be obtained via GPU mining are Etherium, Monero, and Litecoin.
We do also want to mention that Dogecoin can be obtained through crypto mining and it has been quite the fun coin to watch. If you were able to mine some of it before the massive spike, then congratulations on the profits that you achieved.
Is GPU Mining Worth It?
After reading what we just wrote, you might be wondering, in what world is GPU mining not worth it? Well, there are a ton of different factors at play when it comes to GPU mining. First you have to look at the price of the GPU itself.
Because of the massive spike in cryptocurrency in 2017, GPU prices shot up as well.
It makes sense when you look at things, as GPU mining is how you obtain cryptocurrency.
This led to a huge shortage in GPUs as both gamers and miners were trying to get their hands on the latest cards.
Even in 2021, we are still looking at extreme GPU shortages with Nvidia’s latest card the 3080 being extremely hard to obtain.
With GPU prices still sitting on the upper end and with the returns on bitcoin halving, it is valid to ask if it is worth it to carry on with GPU mining.
We are going to say that the short answer to that question is a resounding yes, but there is definitely much more to it than that. Let’s dive in a little further to talk about GPU mining and how you can take advantage of it.
You Might Not Get Anything
Remember when we mentioned there was a catch to GPU mining. When solving these problems, the answer is a 64 digit hexadecimal number that is known as a hash.
The first miner to stumble upon this answer is going to be given the reward, therefore there is a lot of luck involved when it comes to cryptomining.
We also mentioned that you are not alone when mining. There are thousands of people out there mining and most of them take part in mining pools. Instead of working alone, these people pool their resources together with other miners to create more processing power.
If this group of miners’ GPUs solve the code, they will get the reward and it will be divided equally between them.
In most cases, if you are not working with a mining pool, you are not going to be getting anything as you simply cannot compete with the processing power that these groups have.
As mentioned above, if you want to stand a chance to make money with GPU mining, you are definitely going to have to join a mining pool.
Keep in mind that there is a 2% fee that the host of the pool charges if your group just so happens to get the rewards.
The larger your mining pool, the more the bitcoin is going to be split, therefore lowering the percentage you receive. These mining pools are quite large as well, so you can expect your reward to be split across thousands of different people.
When bitcoin was created the people set out to halve the rewards of mining after 210 000 blocks. At first, the initial reward for solving a chain was 50 BTC, this then lowered to 25, then to 12.5 and so on.
Currently we are sitting at a 6.25 block reward with it expected to halve again in 2024. The diminishing returns on bitcoin means that it is less lucrative than it once was, but still can generate some profit if you join the right mining pool.
The first thing we want to talk about is the hardware that is going to be needed for GPU mining.
You might think you can just buy the top of the line equipment, but that is definitely not the way to go about things. You want to pick out a GPU that is not only going to be price efficient, but also have the power to contribute and solve the equations on the blockchain.
The Nvidia GeForce GTX 1070
The Nvidia GTX 1070 released in May of 2016 and while there was an immediate rush of gamers trying to get the latest cards, there was a storm brewing in the distance.
By the next year bitcoin had almost doubled in price and it wasn’t done yet. Near the end of 2017, bitcoin and other cryptocurrencies exploded like no one had ever seen before.
To take advantage of all of this, people rushed to stores to buy GPUs so they could take part in crypto mining. What did this mean for regular consumers?
The latest video cards were essentially unobtainable with them selling out immediately to those who were looking to make some money. The NVIDIA GTX 1070 hit that perfect spot in terms of raw power and price.
It was able to mine for bitcoin and compete with stronger cards, while being at a much cheaper price point. It didn’t just stop at the 1070 however.
The Nvidia GeForce 1080 Ti released soon after and had more VRAM and power to it, albeit at a higher cost. It was another great card to get your hands on for GPU mining. While it is still known as the best mining GPU, others have come out to take its place.
Nvidia Comes Out With New Cards
At the end of the day, the recent demand for Nvidia GPUs for cryptomining was fantastic news for the company.
Knowing that the demand for these GPUs would be high, they placed an outrageous price tag on the latest GPUs. While gamers were saddened by these prices, those looking to use them for GPU mining didn’t care.
The Nvidia GeForce RTX 2070 and Nvidia GeForce RTX 2080 Ti were both fantastic cards when it came to mining. They definitely had more power than the 1070 did, however the extreme price point did make it a little more difficult for people to profit off of mining.
Not to be outdone, AMD had their own cards which were highly efficient for both gaming and mining that were soon scooped up by miners.
The AMD Radeon RX 5700XT boasted extreme power that could be put to work in the block chain and the AMD Radeon RX 580 GTS was another fantastic card, especially for those who were on a budget. Cards were hard to obtain at this time and because of this, prices went through the roof.
Fast Forward to Today
In the present, we are still in this weird position where it is hard to obtain graphics cards for GPU mining.
The two main reasons are: shortage of semiconductors and the boom in scalpers reselling and buying stock of GPUs and other hardware.
There are a ton of scalpers out there who are looking to buy these cards and sell them to someone at a much higher inflated price. Unfortunately it looks like we are going to be in this situation for a while.
We are also in a spot today where computers have been created solely for the purpose of cryptomining.
These machines can run you several thousand dollars as they are built to be performance beasts. Don’t expect to use them for anything other than mining however as they are not made for that.
The big downside towards GPU mining is the extreme amounts of power that you are going to be drawing. Not only are you going to have to have a PSU that can support the amount of power draw, but you are also going to have to afford the cost to keep it running.
The power consumption of a mining rig for crypto mining actually isn’t that intense, with it using about 1,000 watts of power consistently. To give you an idea of how much that is, a vacuum cleaner uses about 2,000 watts of power.
Where GPU mining gets you is with the constant power draw. You are leaving your PC on 24/7 to do this and therefore, that power consumption is going to add up quickly. On average, you are looking at about $100 added to your electrical bill to pay for the mining rig.
Let’s say you don’t want to fork over the money for a GPU or a mining rig and don’t want to worry about electrical demands but still want to find a way to get involved with GPU mining. You can still get involved through mining contracts.
There are large centers around the world filled with mining rigs solely dedicated for cryptomining.
These places will offer contracts in which you help to pay for the electrical costs for these machines. In return you are given a return on your investment.
Think of it as the same way you would invest in a stock market, or even cryptocurrency for that matter. You are definitely going to want to look around and find a crypto mining contract that you can get behind.
So Is It Profitable?
After all that you might be sitting here and wondering, is GPU mining profitable? The unfortunate answer to that situation is that it is impossible to tell.
With the fact that successfully completing a block is up to luick more than anything means you might not get anything for a few days. Adding in the cost of your rig and power consumption, you are looking at expenses.
That being said, there still are plenty of people who are profiting off of mining rigs. This isn’t 2017 where everyone was making a killing with their machine, but there is still money to be made in the market if you join the right mining pool and get the right equipment for GPU mining.
We will close by listing the pros and cons of GPU mining so you can decide if you want to get in on it.
Overall, we’d say if you have the money and resources to spare for GPU mining, it certainly is worth it. There are stories going around about people having their GPUs paid for in the first couple of months by crypto mining.
While we can’t guarantee that the same will happen for you, we will recommend giving it a go. While it might sound like we are harsh on GPU mining, overall we want you to be aware of all of the downsides to it, as we are sure you already know the pros.
We don’t know how long the crypto bubble is going to last this time around or if it even is going to pop at all, so get in on it while you can.