Mining Profit Calculator
Mining profitability is revenue from block rewards minus the cost of the electricity used to earn them. Electricity is the cost that never stops, your share of the network falls as others add machines, and the reward itself is cut on a schedule.
Revenue against the power bill
Defaults are a large modern machine at an ordinary domestic electricity price. The result is negative, which is the point.
Daily profit is revenue − (kW × hours × price). The breakeven output is the electricity price at which the machine exactly covers itself, which is the number that decides whether mining is possible where you live.
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How the number is built
Mining is a business with one dominant cost. A machine converts electricity into a chance at block rewards, and the arithmetic is the value of what it earns against the value of what it consumes.
Daily profit = revenue − (kilowatts × hours × price per kWh)
The power term is the one people underestimate, because a wattage figure is abstract and an electricity bill is not.
A worked example
Take the defaults: 4.50 a day of revenue, a 3,000-watt machine, electricity at 0.12 per kWh, running continuously.
The machine draws 3 kW for 24 hours, which is 72 kWh a day.
At 0.12 that is 8.64 a day of electricity.
So the daily profit is 4.50 − 8.64 = −4.14. The machine loses 124.20 a month, before the cost of the machine itself, before cooling, and before any consideration of what the coins are worth when sold.
The breakeven electricity price is 4.50 ÷ 72 = 0.0625 per kWh. That is the number to compare against your actual tariff, and it is the reason industrial mining happens next to cheap generation rather than in houses.
What moves against you
Revenue is your share of the network’s total capacity, times the rewards issued. You control the numerator by buying machines; you control nothing about the denominator.
Which means revenue decays by default. As others add capacity, difficulty rises and the same machine earns less for the same electricity — so a calculation that is marginally profitable at purchase is usually loss-making some months later without anything having gone wrong.
And the block reward is halved on a published schedule. Unlike difficulty, this is known in advance — a machine that breaks even now will not after the next reduction unless the price has risen to compensate.
The only term that can move in your favor is the coin price, which makes mining a leveraged bet on it with a fixed cost attached.
Mining versus simply buying the coin
The comparison almost no mining calculator makes is against the obvious alternative: spending the same money on the coin itself.
A machine costing 3,000 buys 3,000 of coin instead. The coin has no power bill, no depreciation, no difficulty adjustment working against it, and no heat to remove. It also earns nothing on its own, which is the case for mining.
So the question is whether the machine’s lifetime profit exceeds what that 3,000 of coin would have done. At the default figures the machine’s daily profit is negative, so the comparison is settled before it starts — the coin wins by the entire cost of the electricity.
Change the electricity price to 0.04 and the machine earns 1.62 a day, or roughly 591 a year before depreciation. Against a 3,000 machine with a three-year competitive life, that is 1,773 of gross profit for a 3,000 asset that is then worth very little. Mining is a bet that the coin price rises enough to cover the gap — which means it is a leveraged position on the coin, with the leverage supplied by a fixed cost rather than by a broker.
The costs the arithmetic leaves out
The machine itself is not in the daily figure. A unit costing several thousand and lasting a few years before newer hardware makes it uncompetitive is a substantial monthly depreciation that the profit line above ignores entirely.
Nor is cooling, which is not optional. A 3,000-watt machine puts 3,000 watts of heat into a room, and removing that heat costs more electricity.
Nor is noise, space, or the fact that a domestic circuit may not carry it. These are not arithmetic problems and they end more home mining operations than the arithmetic does.
And the coins have to be sold to pay the bill. Selling mined coins regularly means paying a transaction cost regularly, on a schedule set by the electricity company rather than by you.
The original data
Of the 24,971 unique videos in the finance search study this site keeps, crypto appears in 411 instruction-shaped titles at a median of 24,684 views, and staking — the low-energy alternative — in 6 at 35,757.
The question: It is profitable at the current price. Buy the machine?
Whether the machine pays for itself is the question that matters, and it matters more here than in most subjects, because the purchase is large and irreversible.
The answer is that profitability at the current price is the wrong test. Difficulty rises, the reward halves on schedule, and both work against you from the day the machine arrives. The question is whether it is profitable at a price and difficulty a year from now, and the honest version of that calculation usually recommends buying the coin instead of the machine.
When it fails
The failure mode is that the cost is fixed and the revenue is not. Electricity is billed at a rate that does not care what the coin is worth, so a price fall converts a marginal operation into one that loses money every day it runs — and switching off means the machine’s purchase cost is being depreciated for nothing. Neither choice is good, and the arithmetic offers no third option.
The second failure is a calculation done once. Difficulty moves continuously and the figure needs rechecking, not filing.
A third is excluding the hardware cost. A positive daily profit that never repays the machine is not a profitable business.
A fourth is ignoring cooling. It adds to the largest cost line rather than to a small one.
A fifth is using a commercial electricity rate you do not have. Industrial operations pay a fraction of domestic prices, and most published profitability figures assume theirs.
And a sixth is treating it as an income stream rather than a leveraged position. Mining is a bet on the coin price with a fixed cost attached, and buying the coin directly has neither the depreciation nor the power bill.
Related
Mining covers what the process does and how difficulty adjustment works. Bitcoin is the asset most of this hardware is pointed at. And crypto is the wider asset class, including the alternatives that need no electricity at all.
The breakeven electricity price is the only number that matters and almost nobody leads with it. At the defaults here the machine needs power at about six cents to break even, and ordinary domestic rates are roughly double that. That single comparison answers the question for most people before any discussion of hardware.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.