Ethereum Mining And If Mining Ethereum Is The Right Choice For You
Before we get too far into the discussion of whether or not Ethereum mining is right for you, please read our Ethereum Mining guide and learn how Ethereum mining works.
With Ethereum Mining, there’s a few ways you can start setting up a mining rig but to start with, you’ll need to start with GPUs. CPUs or conventional desktop computers can mine Ethereum but their efficiency output will be so small that it will not be worth your time, even under the constraint that you could potentially be receiving “free” electricity.
A GPU Mining Rig can take some time to construct but it will be the necessary first step to seeing whether or not you can run your Ethereum mining operation profitably or not. Knowing the profitability of your operation is everything and requires several things that you need to consider:
- How much money does the initial investment cost for the GPU Mining Rig?
- How much does the electricity cost in my area per Kilowatt hour?
- How much time and maintenance will it require to mine Ethereum efficiently?
- How long will my miners last before they become outdated/obsolete technology?
- What is the opportunity cost to simply owning cryptocurrency or Ethereum?
- What is your personal outlook on the view of Ethereum Blockchain technology and the Ethereum price?
Historically, in many scenarios, simply having owned cryptocurrency as a store of value have vastly outperformed similar amounts of fiat currency spent on mining operations to then mine cryptocurrency such as mining Ethereum. This is known as opportunity cost. It is the cost of choosing one decision when there are other profitable decisions as well in this particular case. Just because one thing can make you money doesn’t mean it is the best thing that can make you money. And it is important to choose the best thing that can make you money.
Let’s go over the considerations as to whether or not Ethereum mining is right for you:
Do you have the appropriate amount of start up capital to invest into GPU mining equipment for Ethereum? The more money you have to invest into the project, typically speaking, the better your projected outcomes will be. This is due to economies of scale. Basically, the more of something you own, you can start to buy in bulk and manage in bulk which will increase your rate of return and efficiency in the ownership of the units. So the better capitalized you are for your mining Ethereum project, the more confident you can be that mining Ethereum is the right choice for you.
Electrical cost is the next most important consideration. There is this handy electrical cost calculator. With mining Ethereum or mining other cryptocurrencies, it’s predominantly the idea of turning electricity into coins. And the cheaper the electrical cost is for you the better of your Ethereum mining operation will be. With electrical costs as well, it is important to consider how cheap electricity is not just for you as a person, but relative to what other people around the world are paying so that you can compete with them effectively.
Next, you will need to decide how much time and money you are going to invest into this project and how much time and money you have to spend in the first place. If this will be your sole career then great! You have all the time in the world to optimize your mining operation and be the King of Ethereum production! However, many people have real life time constraints and restrictions and it is important to be realistic about how much time you can devote to your mining operation as many things can and will go wrong along the way and it is important to be attentive to your Ethereum mining farm.
Don’t Overlook Ethereum’s Growth Potential (Or Lack Thereof)
One largely overlooked consideration with Ethereum mining has to do with your future perception in Ethereum Blockchain technology. When you own Ethereum mining hardware, you are making a bet in the Ethereum technology itself, because your fiat-based reward can only reward you as much money as the underlying Ethereum coins themselves are worth. The higher the price of Ethereum the higher the reward you will get for mining. So if you are not personally a big believer in the underlying technology or potential of the coin, don’t invest your time and money into the technology. And vice-versa. If you think that Ethereum has big investment potential then spend a lot of time with Ethereum mining as this can be a growth and growth industry where you multiply your wins by return on investment from mining equipment but additionally from the increased Ethereum asset value price.
If all of the above sounds like a hassle and not quite what you initially bargained for, don’t sweat. Like a lot of things, they may sound easier or cheaper than they realistically actually are in practice. And that’s part of the reason why we invented MintDice, the world’s best Ethereum casino. There are many casino games where you can test your luck to win Ethereum or even win Ethereum and earn Ethereum with our games of skill on MintDice including our Ethereum crash game.
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Ultimately, there’s many ways out there to get rich with Ethereum so pick the best one that suits you and have fun!
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