GPU crypto mining now uneconomical
The perfect storm of dropping value and spiking energy prices.
All is not well in crypto land. Bitcoin is the lowest it’s been in two years, and at the time of writing continues to drop. The CEO of Coinbase has warned of a crypto winter and laid off 1,100 staff. The latest news is that the days of profitably mining Ethereum with GPUs could be behind us now as well, depending on where you live and how much you pay for electricity.
Cryptoslate has highlighted the fact that the falling Ethereum price, combined with increasing energy prices, has made it unprofitable to mine the cryptocurrency for the first time since 2020. Basically, you simply won’t make money at the current price of Ethereum given the price of electricity.
To prove the point, they use an overclocked Nvidia GeForce RTX 3090 capable of generating 130MH/s, which will net you something like 0.001625 ETH a day. At the time the article was written, Ethereum was at US$1,250, which equated to US$2.03 a day from mining. As we write, Ethereum has dropped down to US$1,108, so you’re looking at just US$1.80. “At this point, it becomes more cost-effective to turn off the mining rig and buy Ethereum spot using the money that would otherwise be used on electricity.”
Will we see miners moving away from Ethereum? Probably not straight away, as plenty of miners are in it for the long term, but if the price drop continues, then we’d expect to see the Ethereum Network Hash Rate start to drop off even further. Right now it’s sitting at the same level it was in March, though that still represents a sharp fall from its recent high back in May.
Obviously, this mainly affects smallscale miners, not the big mining farms that have commercial or industrial energy deals. Still, the general messaging that your money is better spent just buying coins as opposed to trying to mine them is music to our silicon-starved ears.
This “crypto winter” could be perfectly timed for the release of the next-gen AMD and Nvidia cards; unless they’re really good at mining of course. Or that results in a glut of second-hand GPUs on the market, leaving many unsold current-gen stock on the shelves, and the new cards get delayed.