Posted on August 14, 2017 by The CrownCrypto Team

CrownCrypto’s Guide to Mining Profitability

For many people, mining is a source of income. In recent months the value of many cryptocurrencies have increased by a significant amount! As a result the people who have been mining cryptocurrencies have seen huge increases to their net worth and mining has become profitable enough to become a job for many. Since then, many are flooding the market with mining rigs that they’ve converted from their home computer in pursuit of semi-passive income. In order for you to get a piece of the pie it comes down to one thing – turning a profit. If mining isn’t profitable for you and your computer, then it probably doesn’t make sense to be doing it as a means of income.

How do I know if I’m Profitable?

Finding out if you’re profitable is just a matter of simple math:

Revenue – Expenses = Profit

It may seem simple, however, many people who are new to mining overlook a lot of costs associated with mining and don’t take a look at the whole picture. Many make the mistake of seeing that they mined 1 ETH last month so obviously they made a ~$300 profit right (current value of Ethereum=$301.20)!? Umm… no, not really. Mining isn’t free money. There are a few factors we have to take into account before we calculate profit.

Upfront Costs

Before you even start mining, you have to have a few things. For one, you need a computer that is strong enough to mine cryptocurrencies. Currently mining requires a pretty decent Graphics Processing Unit (GPU) to be competitive at mining and have a decent hashrate. You don’t need the top of the line GPUs which will run you $700+, like the Nvidia GTX 1080 Ti, but even the middle-ground GPUs like the Nvidia GTX 1060 will run you $200+ and we’re only talking about single GPUs here! Nevermind rigs with Motherboards (MOBOs) that can hold 6, 8, or even 12 GPUs!

So, for the sake of easiness we’re going to use the very first rig that I ever built (plus I know all of the REAL numbers for it). I originally built it for Virtual Reality and Gaming then dual purposed it for mining:

Operating System: Windows 10 Home Edition

Motherboard: GIGABYTE GA-Z270-HD3 LGA1151

Memory: 16GB DDR4 RAM

CPU: i7-7700K


Storage: 1TB SSD

Power Supply Unit (PSU): EVGA Supernova 650W G2

Which when all said and done cost me about $2,000 for all the parts listed, tower, mouse, and keyboard. I excluded the tower from the list because most mining rigs are open air and also I bought a really expensive tower that was completely unnecessary, but I needed it for the visuals obviously! If you really must know it was the NZXT S340VR Elite Computer Case in Matte Black and it looks badass!

So, there we are. We have a decently powerful rig for both gaming and mining! It has powerful enough GPUs to give me a solid hash-rate as well as output video and games in 4k resolution. We’re already $2,000 in the hole without even starting to mine. What’s next?

Electricity Costs

When your computer is mining, it is sucking a LOT of power! Unless you have an energy independent home, you’ll need to take this into account because it can be pricey. You’ll need two things to accurately calculate how much your mining rig is costing you.

  1. Electricity Usage Meter
  2. Your Electricity Bill

The absolute easiest and most accurate way to do this is to plug your computer into the Electricity Usage Meter so that you know how many kilowatts your rig consumes in a month. Then you can calculate the power consumption like this:

Kilowatts Consumed x Your Electricity Rate = Monthly Cost

This is what I did with my rig. In one month of mining with both GPUs I consumed ~130kwatts. In Southern California we have pretty expensive electricity at about $0.15/kwh at the base and $0.25/kwh at the highest tier of power consumption. Fortunately and unfortunately I live in a pretty good sized house with 4 roommates. So, I love good sized house we’re in, but since there’s 4 of us all with TVs, Fridges, PS4s, etc. we are almost always in the highest tier. So my electric expense looks like this:

130 kilowatts x $0.25 = $32.50

It is costing me about $32.50/month to mine with my 2 GPU rig. Electricity isn’t a one time cost either; it is paid every single month and needs to be deducted from revenue every single month. Add that to the list of expenses.

Mining Fees

Most of the time both your mining software and your mining pool will have some kind of fee, usually 1-3% but I’ve seen some as high as 5-6%. That right there is cutting straight into your profits. Go with mining software that has low mining fees like EWFB’s CUDA Miner for Nvidia GPUs or Claymore’s Miner for AMD GPUs.

For a Mining Pool, I recommend going with They are pretty well known and respected with only a 1% fee. Or, go with our partners over at MiningSpace that have NO FEES for a limited time! It’s free to use them right now, so why not?

Diminishing Mining Power

You may not think of this as an expense, but it is something that you should keep in mind. As more miners flood the market the network hashing rate rises significantly. If the hash rate gets too high, blocks are found too quickly and too many coins are released into the market. To prevent this, there is a block difficulty that rises (and can fall too if there isn’t enough hashing power) to accommodate for the increased hashing rate. It increases the difficulty of solving a block which means it will take longer. This extends the time between coins being released into the market to the happy medium of around every 10 minutes for most cryptocurrencies.

So, as the difficulty rises and demands more hashing power from the network to release blocks on time, your “hashing share” of the network hashing power gets smaller and smaller. As a result, the amount of coin that you’re paid out per block decreases as difficulty increases, which of course is cutting into your profits more and more over time. Of course you can prevent this by increasing your hashing power with hardware upgrades… adding to your expenses again.

Income Tax

Did you really think Uncle Sam was going to let you have all of this income without any taxes? Of course not! According to the IRS, you’re supposed to treat cryptocurrencies like a stock as far as income. Capital gains taxes and the like are applied to cryptocurrencies. So be mindful of this and which tax bracket you fall into.


To maximize your revenue you’re supposed to always be mining the most profitable coin for your rig, even if you don’t particularly want that coin. If you don’t want that coin, you’re still supposed to mine it because it is the most profitable, but immediately convert it to whatever coin you DO want so that you have the maximum value going towards your desired coin. There is only one mining software that is always mining the most profitable coin for you, Nicehash Miner. The only problem with it is that you’re paid exclusively in bitcoin and they have pretty hefty fees.

If you don’t want to use Nicehash, then you’re a bit out of luck unless you can manage to do it manually. Outside of that, your best bet is to use existing profitability calculators to help determine which coin you should be exclusively mining for maximum profits. Two calculators that help you with this are:

  1. WhatToMine
  2. CryptoCompare Mining Calculator


Once you know all of these figures, you can then calculate WHEN you will be profitable. Take the cost of your rig and divide it by your monthly profitability. This will tell you how many months it will take to pay off your rig and start seeing real profit. The only pitfall is that is assuming everything stays the same, especially the difficulty. So keep that in mind.

Mining cryptocurrencies can be profitable, but there is more to it than just free money. There are several variables that need to be taken into account before you can determine if something is profitable and sustainable. If it is only going to be profitable for a short time, is it still worth it? When will I make a return on my investment? How long until my planned rig will be obsolete? These are all very valid questions to ask and answer before deciding to start mining. Luckily, we’re working on software that will make that question much easier to answer.