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Surviving the Ethereum Merge

The following is an excerpt from: PC Magazine

Indeed, in a new window) shows that GPU-based mining for any cryptocurrency is currently unprofitable if you do so from California. It only becomes a money-making venture with a few coins if you live in a state with low electricity costs. But even then, profitability is in the pennies, well under the several dollars you could make mining Ethereum in the months before the Merge, depending on your hardware setup. 

Mining profitability

The grim situation is causing some to declare(Opens in a new window) that “GPU mining is dead.” The non-existent profitability has prompted many in the mining community to turn off(Opens in a new window) their rigs in an effort to save on electricity costs. Others are preparing to sell their idle PC graphics cards to buyers on Facebook and eBay. “No one is profitable at the moment,” says one miner, who preferred to keep his name private. “I’ll start selling the equipment soon. I have around 50 GPUs.” 

The biggest takeaway isn’t the fact that the profit generated has fallen in the toilet, it’s that electricity costs kill any chance of it being profitable.

This comes from the Texas Tribune:

Cryptocurrency miners line up to come to Texas, and rural counties are welcoming them

Eager to bring new jobs to their towns and boost their tax base, rural Texas counties are courting companies that produce cryptocurrencies…

…By March, Rodriguez had quit farming cotton — something he called “just another job” — and began training to work in a cryptocurrency mine.

The county had exactly what London-based Argo Blockchain was looking for: plenty of open land and easy access to affordable power, thanks to a large wind farm built there more than a decade ago.

Texas political leaders have been promoting the state as a destination for companies producing bitcoin and other digital currencies, touting the state’s reputation for low taxes and cheap power. Around 30 have come in the past decade, and dozens more have expressed interest in moving to Texas.

Anyone who has been in the business for any period of time is very cognizant of the importance of keeping energy costs low, but this article gives a pretty good look into the mindsets of the crypto mining operations that are looking to guarantee their profits. This next paragraph from the Tribune underscores why there is a growing movement to regulate crypto mining power usage:

The computers require large amounts of electricity. The scores of crypto companies requesting permission to connect to the power grid would use nearly as much electricity as the city of Houston, according to Texas’ power grid operator, the Electric Reliability Council of Texas.

Texas Tribune

To make reasonable money from crypto mining, you need an ASIC or a GPU. Many of the most popular choices cost $1,000 or more. Depending on the cryptocurrency you mine and how its price changes, breaking even on your mining device can take six months, a year, or longer. And these devices eventually become obsolete or break down.

Electricity costs are another important consideration. Crypto mining is usually energy-intensive, and you won’t make much money without cheap power.

You’re probably better off using the money you planned to put in a mining device on a good cryptocurrency investment. That could be something as simple as buying the cryptocurrency you were planning to mine or checking out cryptocurrency stocks.