The digital currency market is going through another phase of a deep correction. On January 10, 2022, bitcoin fell below $40,000 per coin for the first time in a long time, while the cryptocurrency Ethereum fell to $2,930. Admittedly, the bears have not yet managed to achieve more, or even hold on to that mark.

But it is premature to talk about a return of the bullish trend yet. It is very possible that cryptocurrencies will fall even further in value, as they already did in 2018/2019. In the current period, mining is still profitable, although it does not pay the same dividends as a year ago. And against this backdrop, many newcomers have the question, is it worth getting into mining 2022? Wouldn’t such business project be a complete gamble and a waste of money? Making forecasts is very risky and unrewarding business, but we will try to do it. We will rely on facts and common sense.

Mining in 2022

Of course, it would have been better to start mining cryptocurrency a year ago or even earlier. And we warned you about that when ETH was still at $130. The miners who got scared of the coming cryptozyma in 2018 and sold their equipment on the secondary market bitterly regretted it afterwards. But those who took a risk and started mining virtual coins back then are now doing very well.

Any investment in the blockchain industry, whether it’s mining or just buying cryptocurrency in the hope of further growth, is always a long term undertaking. Therefore, there is no need to invest your last bit of money in this venture, much less take out a loan from a bank secured against property. Cryptocurrencies are volatile and the price of any coin changes every few seconds. But there are still periods of stability, where exchange rate fluctuations are within certain limits. Let’s assume, that the year 2022 will be like that and based on that let’s try to calculate the feasibility of entering mining in current conditions.

Is it worth to start mining in 2022

So, what should a novice crypto-enthusiast do, who decided to make a contribution to the development of an innovative technology, and to increase his capital. Is it worth to buy hardware for the farm on video cards or it’s better to buy ASIC-miner. Or maybe just buy cryptocurrencies with this money, send it to a “cold” wallet and wait?

The question of whether it’s worth getting into mining right now is difficult to answer unequivocally. If you’re looking for a good place to put your spare cash so that inflation doesn’t eat it up in a few years, then you probably should. But don’t expect to get it all back in a year or even sooner. Those who want to make a quick profit are too late. You should have started about 15 months ago, when prices were much cheaper and anticipation of a future crypto rally was literally in the air. The situation is very different now. Video cards and other necessary components for building a mining farm have gone up in price by 150-200%, the complexity has increased, and the income of miners has gone down. And when big Ether goes to PoS, they will drop even more. The situation for those who mine Bitcoin and other cryptocurrencies on ASICs is no better. The cost of new models of integrated circuit devices has risen seriously, and the exchange value of digital coins has fallen. So don’t expect easy money gentlemen.

As for direct investments in cryptocurrency, we need to look at this issue separately. Of course, now is a better time than last November. Back then, bitcoin was worth over $60,000 and Ether was climbing to $4,700. However, there is no guarantee that the current stage of correction is coming to an end and the market will turn around again. When you buy mining equipment, you are investing your money in a real commodity, which you can then sell. Even with ASICs, which are limited by one algorithm or another, you can mine different coins. For video card miners, the choice of coins is even wider. If you have invested in a particular blockchain project, however, your fate is entirely up to its developers. Of course, you can also buy bitcoin without thinking too hard. That would be a very smart investment. But you can set up a mining farm and earn bitcoins from Nicehash, and sell your video cards later. The profitability of mining depends on many factors, both economic and political. Let’s take a closer look at them.

What affects the profitability of mining

The blockchain industry is more than $2 trillion in assets, and the powers that be are actively trying to take control of it. You have to be prepared for home miners in the Russian Federation to be treated like small businessmen and forced to pay taxes. Therefore, before you invest your money you need to make a business plan, taking into account the following aspects:

Dynamics of growth of mining complexity of the top PoW cryptocurrencies.
Prospects for further appreciation of these coins on exchanges and the general direction of the digital asset market in the next few months.
Possible release of new, more powerful ASIC miners and video cards.
The prospect of regulatory changes in your country, both to make life easier (which is very unlikely) and more difficult (which could very well be) for miners and the blockchain industry as a whole.
A possible increase in the price of electricity for households and the introduction of quotas for entrepreneurs. So far in Russia, Ukraine and Belarus the tariffs are quite low and a miner who consumes 1000 kW per month, pays the same electricity rates as a pensioner granny, who consumes 10 times less. But, alas, this is not forever.
One has to take into account the prospects of further increases in the price of computing equipment, due to the same shortage of silicon and other factors. And also the growing murmurings of the green movement about high energy consumption by miners accelerating global warming. Elon Musk can bring down Bitcoin with a single tweet, calling it an environmentally destructive cryptocurrency. Although his beloved Dogecoin is also mined on ASICs.

Many governments are seriously exploring the prospect of issuing state-owned cryptocurrencies (CBDCs) and some, following China, have already launched pilot projects for implementation. It is inevitable that they will see independent blockchain projects as direct competitors and will impose all sorts of restrictions on their activities. That is exactly what the Chinese authorities are doing right now. Under pressure, many large data centres have moved to other countries, including neighboring Kazakhstan. But when protests broke out in that country and the authorities announced the start of an anti-terrorist operation, the Internet was shut down across the country. It was the crypto-entrepreneurs who suffered first and foremost.

Well, now we will tell you how to calculate the profitability of assembling a mining farm or buying an ASIC-miner based on the current situation. What to consider and what to be wary of.

Payback period of a mining farm

When calculating the payback period of a GPU-ring, you need to immediately determine what kind of coin you will be mining and what you will be storing the earned money in. This is a very important question. Some people transfer everything to bitcoin right away, others keep Ether or invest in other alternative projects. Transfer all cryptocurrencies into a traditional currency, only if the market has reached another peak and it means that a correction is inevitably coming soon. Calculating the right moment is not easy, so it is better to leave at least half in cryptocurrency.

You need to choose a video card model, see how much it costs in shops now and calculate the number of units you want to buy based on your financial capabilities. Don’t forget to take into account the cost of the other components. Graphics cards alone will not work. Then you will need to calculate a cumulative hash rate of your mining farm and use WhatToMine online mining calculator or other alternative service to calculate your profit per 24 hours mining a particular coin.

You need to specify the name and the number of video cards, as well as the cost of electricity, and the service will print out the estimated profit for the day. By simple arithmetic you can at least approximately calculate the amount of profit per week, per month and so on. But the longer it is, the less probable it is that the real profit will correspond to these calculations. It can be either much less or much more.

What can’t be saved on in mining?

When putting together a farm, novice miners often try to save money on power supplies. They buy cheap, not very reliable models with a minimum allowable capacity. This is a gross mistake. You should buy power supplies from reliable manufacturers with 80+Bronze certification or higher. Don’t buy second-hand graphics cards, raisers or old motherboards.

What can I save on when mining?

Highly expensive video cards, are not always the best purchase option. Often, what is good for a gamer in mining does not matter at all. You don’t need to buy expensive CPUs and hard drives. You can save money on a framework for a mining farm by assembling it yourself. Instructions on how to assemble it are available in the thematic review on our website.

Once you have decided on the model of video card, look for a retailer where it is sold at a minimum price. The same goes for the rest of the components. You can try to save on electricity in a legal way by installing a day/night meter.

Calculation of the profitability of mining farms in 2022
As recently as two years ago, Dr Lisa Su’s products were considered the best option for mining. AMD cards were cheaper and were not inferior in terms of hash rate to their counterparts from competitors. But then Nvidia got its revenge and now the profitability of green and red cards is about the same, but more profitable coins are available to Nvidia miners. Here’s an example.

Payback on AMD graphics cards

At dns-shop.ru the ASRock AMD Radeon RX 6800 graphic card costs 134,999 rubles. Given the cost of the other components, a four RX 6800 video card mining farm will cost you around 600,000 rubles.

At the price of electricity of 0.06 $/kWh (4.5 rubles) such a farm at the time of writing the review brought in 805 rubles. At this rate, the payback period will be about 25 months, and only then will you start to make a net profit. Let’s now calculate the payback period of one of the flagship green models.

Payback on Nvidia graphics cards

In the same online shop dns-shop.ru video card GIGABYTE GeForce RTX 3080 Ti sells for 199 999 rubles. Including the rest of the hardware, a farm of four cards will cost you around 860,000 roubles.

At the price of electricity at 0.06 $/kWh (4.5 rubles), such a farm at the time of writing the review brought 1,030 rubles per day. With this scenario payback period of about 28 months, and only then will you start to make a net profit. Of course, you can try to pick up more profitable models (although these are some of the best), but it is unlikely to radically change the payback period in the current situation in the crypto market.

If all goes well, this period will be halved, but it could also increase. With the right settings and regular maintenance, video cards can last three years or even more in mining, but sometimes they fail much sooner. Keep in mind that the most profitable coin is Ethereum. In 2022, this cryptocurrency will become unavailable for mining and profits will decrease even further. Based on this, decide whether or not it is worth getting into mining 2022.

The relevance of ASIC mining

Now let’s calculate the profits of ASIC miners. A list of profitable models can be taken from https://whattomine.com/miners. Devices on integrated circuits for Ethash algorithm are better not to consider yet. They are expensive, and once Ethish moves to PoS the profitability will drop.

Let’s take the latest ASIC model for Bitcoin mining, Bitmain Antminer S19J On https://51asic.ru this model costs 970,000 rubles. According to the online mining calculator WhatToMine, with the price of electricity at 0.06 $/kWh (4.5 rubles) the equipment will earn 1,350 rubles per day.

So it will pay for itself in about 24 months. In addition, ASIC-miner is much noisier than a farm of four or even six video cards, which makes it difficult to operate in a home environment.

A list of useful resources for monitoring
A miner needs to monitor the market regularly. Coinmarketcap and Coingecko are good resources for this purpose. A list of mining pools can be found at https://miningpoolstats.stream, although this resource is sometimes unavailable lately.

We recommend creating an account on the trading platform https://www.binance.com/ru. Clients get access to a pool for mining BTC, ETH and LTC with daily payouts. Sign up, pass KYC and you’ll get every 24 hours you’ll be getting your mined cryptocurrencies to your exchange deposit and withdraw them in rubles to your Advcash wallet with zero fee.

A lot of useful information can be found on the Russian-language mining forum https://miningclub.info. You should download software for mining only from trusted sources, these resources are Bitcointalk and Github.com.

Conclusion

From the above, the following conclusion can be drawn. It is difficult to calculate the profitability of mining. We only see the current situation and do not know what will happen tomorrow. It is difficult to predict how the fate of this or that cryptocurrency will turn out, the competition is fierce. But the fact that the blockchain industry has become part of the global economy is obvious. Cryptocurrency mining is promising, but you invest at your own risk. However, the same can be said for any business project. It all depends on your skills and entrepreneurial talent.