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My understanding, from a relatively old source, that it used to be that hobbyists would get bitcoins from mining on their private computers, but that more recently there was a heavy shift to e.g. Iceland where geothermal electricity is cheaper.

What is the expected value of mining bitcoin with spare computrons from laptop including an NVidia Geforce GTX, in the USA near Chicago as far as utilities go? If the expected value is (say) 105% of electricity burning up, what are the chances of breaking even? Does it have (say) a 10% chance of doubling an investment, or are we talking a financial lottery ticket where one minute's mining could theoretically return thousands of dollars worth of BTC, but the expected amount of crunching to get the winning lottery ticket is impractically long?

I've seen some discussion suggesting that Bitcoin is even more volatile than traditional currency, and I'd be a bit surprised at being told, "It's entirely worth it; go ahead." However, I wanted to ask, and confirm my expected answer about whether mining bitcoin is profitable in a reasonable amount of time.

Thanks,

Nate Eldredge
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Christos Hayward
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  • Christos, I believe it's out by like a factor of 100 (!) these days to try it with an everyday home computer. As everyone has pointed out this (good) question should be migrated. – Fattie Aug 26 '20 at 11:45
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    @Fattie: You're a few zeros short. A factor of 10000 or 100000 is closer to the mark. Compare for instance the hash rate per unit energy figures (MHash/J) between graphics cards and ASICs, where the best of the latter are barely profitable if electricity is very cheap. – Nate Eldredge Aug 26 '20 at 22:36
  • @NateEldredge , an excellent point ! – Fattie Aug 27 '20 at 10:23

3 Answers3

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No.

The cost of electricity will far exceed the value of the bitcoin you generate. People who are using specialised ASICs in regions with low electricity cost barely break even. Your laptop wil do far, far worse than that.

  • @AustinHemmelgarn I have no idea what makes you think that I am implying that is the sole factor. I've stated several times that it isn't. –  Aug 26 '20 at 20:02
  • @JimmyJames I'm not saying that the difficulty of production is irrelevant, I'm saying that it's not the sole factor that makes BTC valuable as you seem to be implying. My point is that there is demand as a result of it's availability as a means of exchange, and without that it would be no better off than other cryptocurrencies that are equivalently difficult to mine. – Austin Hemmelgarn Aug 26 '20 at 19:41
  • @AustinHemmelgarn That's all well and good but really has no bearing on my point. In order for bitcoin to remain valuable, a pre-requisite is the difficulty of production. All the things you mention could still remain true and bitcoin's value would still drop dramatically if production became cheap. If you are denying this, then I'm interested in why you believe bitcoin would be immune to the laws of supply and demand. –  Aug 26 '20 at 18:35
  • @AustinHemmelgarn It wouldn't be usable as a means of exchange if it didn't have value to someone. Imagine if a new technology came out tomorrow that made it several orders of magnitude easier to mine and the rate of new bitcoins was thousands of times greater. What impact do you think there would be on the price of existing coins? This isn't a novel idea. Increasing difficultly is built into bitcoin for a reason. –  Aug 26 '20 at 18:14
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    @CaiusJard For a currency to "have value", it is necessary, but not sufficient for it to be hard to mine, In other words, it it's not hard to mine, it won't have value (since anyone can find them), but simply being hard to mine is not enough (on its own) to give it value. –  Aug 26 '20 at 17:41
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    @JimmyJames No, it's not just the difficulty of producing it that results in the high value, it's also valuable because it's one of the few cryptocurrencies you can actually use outside of entirely private transactions. That's a lot of why other cryptocurrencies with similar levels of difficulty in mining have almost no value in comparison, you can't really use them anywhere except in private transactions with other people who mine them. – Austin Hemmelgarn Aug 26 '20 at 17:01
  • @CaiusJard You are correct in your assertions: if people didn't believe it to be valuable, it wouldn't have any value, regardless of the effort. My point is that the reason that people do (currently) think is is valuable requires that it be difficult to create and/or clear transactions. If it suddenly became easier to generate bitcoin and the value remained, you would have a corresponding increase in supply. –  Aug 26 '20 at 16:52
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    @JimmyJames I'm not sure I completely agree with the comment as pitched; there are other currencies that are as difficult to mine, but the real world value of them is nowhere near bitcoin. Bitcoin's value essentially also derives from the same psychological effect as does anything else that humans consider to have value (that it has value because people believe it has value) – Caius Jard Aug 26 '20 at 16:16
  • I agree with this answer but we can take this further. In order for bitcoin to work, it must be costly/difficult to mine and clear transactions. The scarcity (and hence the value) of bitcoin is solely based on this effort. –  Aug 26 '20 at 15:57
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    @s1lv3r Even if that were to come true, you can simply purchase the coins for less now. –  Aug 26 '20 at 15:43
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    Is it even possible to answer this question with 100% certainty? If a single BTC is worth a billion in 50 years, it would have been a good idea in retrospect, even if there are more cost-effective ways of mining as of today ... IMHO an complete answer to this question would include some calculations/projections following this line of thought ... :-) – s1lv3r Aug 26 '20 at 15:38
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    @JimmyJames Yes, but the fact that it is usable as a means of exchange in it's own right (that is, without implicit conversion to other currencies) helps keep it valuable. Again, other cryptocurrencies are similarly difficult to mine, but have only a tiny fraction of the value of bitcoin because they can't really be used as-is. I'm not saying this is the sole reason BTC is so expensive, I'm saying it's a contributing factor to it being so expensive. Assets have no value on a market if nobody else wants them and they have no practical use. – Austin Hemmelgarn Aug 26 '20 at 18:24
  • @jimmyjames I note you've deleted your original comment where you did imply it was the sole factor.. – Caius Jard Aug 27 '20 at 06:00
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BrtH's answer is 100% correct, but does assume you don't need the waste heat. If you're already using electric heat (not heat pump, actual dumping of electricity through resistors) or gas heating at comparable prices to heat your dwelling space (perhaps because the ambient temperature outside is so low that heat pump can't operate; if it can work you'd be better off saving up to buy one), then you break even on electricity for free, and only have to consider "wear" and whether you'll make any appreciable mining output at all. In this case there's a small chance it might make sense, but probably as some other proof-of-work coin you can exchange rather than as bitcoin itself.

R.. GitHub STOP HELPING ICE
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  • @JimmyJames well, it's rare to live in places where it's always cool, but there are lots of major cities where every dwelling needs heating most of the year. – Peteris Aug 26 '20 at 19:47
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    Maybe if you live somewhere where it's always cool. –  Aug 26 '20 at 18:39
  • Well, it's summer here, so I don't need waste heat for space heating... but maybe I could attach the heat to a generator. Maybe if I made it efficient enough, it could generate more electricity than is used, and I could make a profit selling the excess energy. (-: – Christos Hayward Aug 27 '20 at 12:25
  • No, a heat generator cannot help. Only actually wanting all the waste heat can help. – R.. GitHub STOP HELPING ICE Aug 27 '20 at 12:45
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    I'd also like to point out that you're wandering off into perpetual-motion thinking which is guaranteed to get you wrong conclusions. – R.. GitHub STOP HELPING ICE Aug 27 '20 at 22:40
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Maybe

Using a Bitcoin Profitability Calculator you can find this out by yourself.

This site lists the hashing rate for a GTX 1050 for various algorithms. It doesn't list a hashrate for mining bitcoin, though (our first hint). But even taking the highest hash rate in the table (12.45MH/s) and entering it in the above calculator shows you could expect to mine 3E-9 bitcoins* per month, effectively nothing (and worth nothing).

A GTX 1050 consuming 70W** would consume 50.4KWH of power in that month, assuming a cost $0.1/KWH you would spend $5.04 in electricity, and would have next to no income from it.

As per above, NO, mining bitcoin with a GTX 1050 is not profitable.

What about renting your hashing power?

Using a NiceHash Profitability Calculator you can figure this out by yourself.

For an example, I used the calculator to see how much Bitcoin could be generated by an NVIDIA GTX 1050. It said that that particular graphics has an expected earning 0.00096969 BTC in one month*. At current prices, this is worth $11.10 (all figures in USD)

Using the same figures for power as the previous example of $5.04/month leaves you with a profit of $6.06/month. You're not going to pay back your computer anytime soon with that, but you're not in the red either.

What about other cryptocurrencies?

Also worth mentioning that there are other cryptocurrencies which are more profitable than bitcoin with GPU mining. Here's an article on the Top 12 Best Cryptocurrencies to Mine Using GPUs in 2020.

To Conclude

Mining Bitcoin by yourself is not profitable, but renting out your hash rate could be, and mining other cryptocurrencies could also be profitable. Leaving me with an answer of maybe.

Footnotes

*Note that revenue is based on actually mining a bitcoin. If you mine by yourself you gain either nothing or an entire Bitcoin (and the vast majority of the time you'll get nothing). If you join a large enough pool, the pool has a higher chance of getting the bitcoin than you do on your own and you will be rewarded proportionally to what you contributed to the pool, meaning your earnings will get closer to the expected value stated above. Most miners join pools to have a more stable income, but be aware that pools take a fee in the form of a percentage of your payout.

**This is for the graphics card alone. Your entire computer will be using more. If you have a power meter it might be worth measuring how much power your particular computer consumes when mining bitcoin.

Aubreal
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  • @CaiusJard in terms of having to earn bitcoin to have revenue, if you join a large enough pool it becomes pretty consistent and less of a luck issue. Also, the first word of my answer, in bold, is "Maybe". Hardly an endorsement of guaranteed anything. – Aubreal Aug 26 '20 at 19:14
  • I was merely pointing out how it reads; it reads like you say "maybe it will profit", and then launch into some figures that sound like they occur all the time (like interest from a bank) leaving the "maybe it will be a profit" tied to "maybe because it will pay X per month so if you can make your costs Y...". Don't shoot the messanger; I'm just trying to tell you how I, as a third person, perceives it to read. I think it's a good answer if it makes it more clear that, in essence mining is gambling with no guarantees – Caius Jard Aug 26 '20 at 19:18
  • @CaiusJard I understand what you mean. I'll edit to make it clearer. – Aubreal Aug 26 '20 at 19:23
  • Assuming you are right and ignoring the rest of the computer, assuming the version of that card selling at about $160 online right now, that's 25 months to break even. What's the lifespan of such a card running at or near full capacity? –  Aug 26 '20 at 16:34
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    You didn't use a bitcoin profitability calculator. You used a NiceHash profitability calculator which has nothing to do with mining bitcoin. – David Schwartz Aug 26 '20 at 16:31
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    @CaiusJard This is correct, but in my experience generally not an issue. Even the smallest pools back in the day had acceptable variance in finding blocks, and schemes like Nicehash are not reliant on finding blocks, but instead on finding buyers for your hashrate. –  Aug 26 '20 at 17:19
  • But be careful not to pitch your answer so as to give an impression that mining bitcoin has a guaranteed return. In order to win your fraction of a bitcoin you have to contribute to a mining pool that succeeds in solving a block. Mining bitcoin is a lot like playing the lottery, and joining a syndicate doesn't mean you'll win every month – Caius Jard Aug 26 '20 at 16:36
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    @CaiusJard Your statement is really not true. There are mining pools that pay per hash or offer a pay per hash option. Most people don't want this option because they make more by taking just a small amount of risk. F2POOL, for example, guarantees a particular minimum reward per share generated that is roughly equivalent to your 2.5% less than your expected yield from the block reward if solo mining. (You also get a share of the transaction fees, but that's based on an algorithm that has some risk for the miner.) – David Schwartz Aug 26 '20 at 22:47
  • You should write an answer, David – Caius Jard Aug 27 '20 at 05:00
  • @NateEldredge that's why I mentioned that "there are other cryptocurrencies which are more profitable than bitcoin with GPU mining." and linked an article that listed a dozen of them in my answer. – Aubreal Aug 27 '20 at 13:27
  • @DavidSchwartz thanks for the feedback, I edited my answer to add a bitcoin profitability calculator alongside the nicehash calculator and make it clearer. – Aubreal Aug 27 '20 at 13:54