Calculating the profitability of its mining rig - Part 3 ( end )

We are now arriving in the financial part of the mining activity, which will allow us to take note of the profitability of its mine rig.

In addition to the technical knowledge that mining requires, you will also need some financial notions in order to know what you are putting your feet. In clear, here is the question of calculating the costs related to mining activity and knowing when you will reach the threshold of profitability.

Although the crypto-currencies market is subject to fluctuations, it is still recommended to use financial tools that have demonstrated their value (profitability threshold, initial financing plan and cash flow chart) in order to assess the viability of its mining project over time.

This is what we will now discover in this tutorial devoted to the notions of financial management that you must master to sharpen your strategy and know where you are going.

Make initial funding plan

First of all you need to set a budget that will allow you to buy everything you need for mounting your mining rig.

Use the buying guide that I have published on this blog and that will make you aware of the elements (necessary or accessories) necessary for your mining activity.

For reminder here are the basic elements necessary to mount a mining rig :

Using this list you will be able to set up your financing plan and encrypt the total cost of your initial investment before you begin to undermine anything.

Calculating the profitability of its mining rig

The monitoring of its electricity consumption and therefore the ensuing financial charges are to be taken into consideration for any good minor who wishes to attain profitability one day.

In fact, if you hadn't understood it, you would consume more or less electricity depending on the material that will comprise your mining rig.

Since the graphics cards are the most energy-intensive, you will need to monitor their consumption in real time and use a price schedule normally provided by your electricity supplier.

To track the real-time consumption of your mining rig I advise you once again to obtain a wattmeter.

The wattmeter is an electrical outlet with an embedded consumption meter on which you will connect your mining rig. This will allow you to monitor your electricity consumption daily and to support the monitoring of your charges.

Here is for example a price structure proposed by the company EDF :

Example of rate grid provided by the electricity supplier EDF and which will allow you to calculate the electricity costs generated by your mining activity

Using this pricing schedule you will know precisely the price to pay for each kW consumed each hour by your mining rig.

You will also need to be aware of the subscribed power (which is normally mentioned on your electricity bill) in order to know the price to pay for each kWh consumed.

On this invoice provided as an example you can see the subscribed power (6 kVA) as well as the protection setting (30 A) and refer to the tariff schedule in order to know the price of the kWh

For example for a mining rig consisting of 5 graphics cards of the type NVIDIA 1060 GTX and whose actual consumption during mining is about 140 WH (i.e. 0140 kWh)

0140 * 24 (1 day of mining) * 30 (1 month of mining) * 5 (number of graphics cards) = 504 * 0.15640 (price of kWh TTC for a subscribed power of 3 kVA) = $78.82 of electricity charges

Assuming that the crypto-currency mined is of the ethereum and considering that the value of the price of the latter is for example of $200 and that I could have mined 1.80 ETH during the month I come to the following calculation:

1.80 ETH * $200 (price of the ETH euro currency given as an example) = $360 – $78.82 (electricity charges) = $281.18 profit

Of course if the price of a crypto-currency falls to such an extent that it does not allow you to cover your electricity costs it is said that this crypto-currency is not profitable to undermine.

It is then advisable to turn to another crypto-currency to undermine so that its mining rig is profitable.

The site coinwarz also allows you to consult a ranking of the most profitable crypto-currencies to undermine, of course this changes constantly. You will be able to refine your mining strategy and avoid wasting money unnecessarily in the mining of a cryptocurrency that would no longer be profitable.

Coinwarz provides you with a ranking (updated in real time) of the most profitable cryptocurrencies to undermine

Once again know that the price of crypto-currencies is fluctuating over time and that your calculations may be distorted however I believe that it is necessary to know these notions in order to simulate a future mining activity and know the risks to take before embarking.

Estimating profitability through the Coinwarz website

The site coinwarz offers you an online calculator that will allow you to estimate the profitability of your mining rigin a simple way.

To recall the threshold of profitability is a financial term that corresponds to the time during your mining activity where the money you have brought back your mine rig will cover the cost of the latter.

You can calculate the profitability of your mining rig for each type of cryptocurrency known

We will remain on the example of the mining of ethereum to understand the usefulness of the calculator.

This calculator proposed by Coinwarz and which is very handy will allow you to instantly know the profitability of your mining installation

To use the calculator you will need the following data:

  • The hashrate power generated by your mining rig that depends on the model and the number of available graphics cards
  • The power consumption (expressed in watts) of your mining rig (use the value displayed by your wattmeter for better accuracy)
  • The cost of electricity (see tariff schedule provided by your electricity supplier)
  • The total cost of your mining rig
  • The costs levied by the mining pool

In order to understand the usefulness of the calculator we will resume the data provided as an example in the previous part of the article

Therefore, enter the following values:

  • for the hashrate: 20 MH/s * 5 = 100 MH/s (hashrate generated by a graphics card type 1060 GTX)
  • for power consumption: 140 Watts * 5 (number of graphics cards ) = 700 watts (total mining rig consumption)
  • for electricity cost (power cost): $0.15640 or $0.18 (price of kWh TTC for a subscribed power of 3 kVA and to convert to US dollars)
  • for the total cost of the mining rig: $1400 or $1595
  • for the costs of the mining pool (Nanopool): 1%

After clicking on the "calculate" button, you will get the following result:

The calculator provided by Coinwarz allows you to have a real picture of the profitability of your mining rig, to use as often as possible

With our example and the data entered we now know that the threshold of profitability will be reached in 454 days approximately.

You can also see the income generated (in u.s. dollars) by your mining rig daily, monthly and annually.

Of course this result is subject to revision considering once again the evolution of the course of the ethereum over time. However this allows you to see a little clearer in terms of profitability before investing in a mining rig.

Discover the Blockfolio app to manage its crypto-currency portfolio

Here is a tool that I consider indispensable to the minor (who must also act as an investor), I want to talk about the Portfolio Manager.

Indeed the Wallet Manager is a tool that will allow you to know in real time the evolution of the value of all the crypto-currencies that you have in your possession.

This will allow you to instantly know over time whether your investment is profitable or not.

To manage your first portfolio of crypto-currencies I advise you to obtain the blockfolio application available on Android Smartphone and iPhone.

After you have downloaded, installed and started the application you can immediately visualize your wallet as in the image below:

An example of a portfolio that I currently manage with the blockfolio app via my Android smartphones

It is also interesting to be able to follow the evolution of its portfolio in graphic form as in the image below:

Thanks to the graph provided by the application you can follow the evolution of its crypto-currencies portfolio in a practical way 🙂

However if this is the first time you start the application you will have nothing to see, so you will have to add crypto-currencies that you have in your possession.

To be pressed the "+" symbol in the top right corner using your touch and you should get the following screen:

You will be able to search and add a new crypto-currency in your wallet via this screen

For example if you got 10 ethereum on your ethereum wallet and you want to plot the value of these in your wallet. All you have to do is to:

  • Type ETH in the search Barret "search for coin" and select ETH/EUR
  • Check "buy"
  • Select the Exchange platform (which will provide the value of the ethereum course)
  • Indicate the amount of ethereum.

Your screen should look like this:

then you just have to press "Save" so that your wallet automatically updates.

In conclusion

Thanks to this last part you will have essential financial notions in order to know the viability of your mining rig and perform financial simulations closest to reality.

Because again it is here question of investment and hire money to earn more money. So you have to arm yourself with effective financial tools to always know where you're going and whether it's worth the effort to get started.

So I hope to have made you aware of the financial aspect of mining so that this experience is profitable for you and that you can ultimately earn money. 🙂