By now, nearly everyone has heard of cryptocurrency. However, many don’t realize that much of the processing at its foundation is done on individual computers or small cryptomining farms in homes and dedicated businesses. Is cryptomining worthwhile for you? Here are a few pros and cons.
Not Always Profitable
While any PC with the right specifications can be used for cryptomining, it’s important to understand that it consumes a significant amount of energy to do so. In many cases, it costs more in electricity to mine cryptocurrency than you’ll receive back, making it a nonstarter. Make sure you know how much you pay for electricity before getting started. In some cases, mining is more likely to make sense. If you have solar panels, for example, there’s a good chance you’ll be able to make more from mining than you would from selling the electricity back to the grid.
Up-Front Investment
You’ll also need to factor in how much you’re willing to invest. If you already have a gaming PC with a relatively powerful GPU, you can get started right away. If you’re looking to purchase a graphics card, on the other hand, factor in how much you can expect to profit and how long it will take to cover your investment. It’s important to remember that cryptocurrency prices can fluctuate wildly, even over a short period of time. You may come out ahead, or you may find yourself struggling to recoup your investment if prices crash. Bear in mind that used GPUs and other PC components still maintain some of their value even after a few years of use.
Heat Generation: A Pro and a Con
A powerful PC can often efficiently mine cryptocurrency, but you’ll want to factor in the cost of heat generation. Fundamental laws of physics mean that mining cryptocurrency will heat your home, which can have a significant impact on your cooling costs if the temperature is warm. If you live in a region where you frequently need to heat your home, however, mining can actually cut back on your heating bill a bit.
Note, however, that most heating systems are far more efficient than generating heat through electricity, so the extra you pay in electricity to mine won’t be fully offset by lower heating bills. A notable exception is if you use a space heater in a room. A gaming or mining PC will operate about as effectively as a space heater, making the decision to mine a potentially reasonable one even if it’s not strictly profitable in terms of the money generated compared to the cost of purchasing electricity.
It’s Complex
While you don’t have to become a pro at cryptocurrency algorithms, you’ll want to become familiar with how it works. You’ll also need to make sure you know how your software works and how you’ll store your cryptocurrency. Fortunately, there are websites that make getting started with mining fairly straightforward. Be aware, however, that scams are widespread, so make sure you’re only working with trustworthy companies.
Mining cryptocurrency isn’t a foolproof get-rich-quick scheme, and it’s possible than even a modest investment won’t turn a profit for quite some time. However, if you have a GPU already, it’s worth taking a look to see if cryptomining can net you a bit of extra cash. Just make sure to take a comprehensive look—it’s easy for drops in cryptocurrency value and increases in the cost of electricity to make a previously profitable venture a money sink.
If you are interested in getting started, head on over to our mining guide!
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