Cryptocurrency mining requires constant vigilance in order to change operations to optimize profits and stay competitive in highly dynamic environment. Poolin has brought something new to the table of open access resources.
With a growing number of new ASICs having different properties, it’s important to understand how each piece of hardware reacts under changing circumstances. The fluctuation between demand volatility, energy / hardware prices, network difficulty and block rewards keeps everyone attentive. Mining operators need accurate information on the output of each ASIC in order to measure profit margins and manage energy bills effectively.
Poolin developed a Mining Profit Estimation tool to give miners a compass that takes their local variables and points to better configurations by comparing different hardware. Their tool leverages their role as the leading mining pool by drawing real data — updated on a daily basis — from their large user base to provide the most accurate indicators of each of the related ASIC attributes.
The tool is divided into three sections: the header, the cryptocurrency toolbar, and the ASIC comparison toolbar. At the top of the calculator, next to the header, there is a search bar that shows a particular ASIC model or supplier. In the top right corner, the energy cost toggle calculated in kilowatt hours (KWh) is set at $0.03 USD, i.e. three dollar cents. You can use the plus and minus buttons to adjust the price by a fifth of a cent ($0.002) given the local cost of electricity.
Below the header is the toolbar for cryptocurrencies. The toolbar is preset to list the most common ASICs used in Poolin’s pool, and you can also choose to see “ALL” available ASICs based on their profitability. Then there is the option to choose between the different coins available to mine such as Bitcoin, Litecoin, Ethereum, Decred, Dash, Nervos, Bitcoin Cash, Zcash, Ravencoin and Bitcoin SV.
When selecting a coin, a sub-menu appears providing an adjustable price range, a maintenance cost alternative, and that network’s hashrate. The “Correct Miner Data” button opens a new window to submit revisions using real mining data that are incompatible with the data in the results of the tool. This option allows the user to provide direct feedback on their hardware’s hashrate and power consumption, which is then reviewed by the Poolin team.
Under the Bitcoin sub-menu for the cryptocurrency toolbar, there is also an additional option to factor in the upcoming change in the Bitcoin block reward. Halving the block reward is a significant epochal occurrence in Bitcoin, also called “halvening,” which illustrates Bitcoin’s value proposition as a deflationary money supply. For miners, this is especially important as the income would be halved, rendering old less energy-efficient equipment unprofitable. This occurance will take place in block number 630,000, which is expected to happen about mid-May of this year.
The main part of the tool provides a comparison of the different ASIC attributes separated into eight columns. The y-axis of the table, on the left, lists the manufacturers and models of ASIC.
- Average hashrate of each machine, measured in hashes per second.
- Power consumed per day, which is measured in watts (W).
- Unit Power measures the number of watts consumed per basic hashing unit; in the case of Bitcoin’s SHA256 algorithm, a terahash (T) = 1 trillion hashes.
- Gross revenue per day, i.e. the dollar value of how much cryptocurrency that machine mines in twenty-four hours.
- Energy cost per day given by the cost of electricity and how much energy that machine consumes.
- Ratio between the miner’s daily profit and their electricity costs, i.e. what percent of profit is eaten by the electricity bill.
- Break-even gives the minimum price of the cryptocurrency necessary to keep mining at a profit.
- Net profit estimate per day given a particular electricity cost and currency price.
The break-even or “shutdown price” is probably the most important metric as it contains all the other data points. Over the years, mining hardware manufacturers have developed increasingly powerful ASICs that have increased the hash rate and thus the mining difficulty. Miners have to sell part of their cryptocurrency earnings to cover the cost of electricity. Each model of mining equipment has a different threshold because of its unit power (watts consumed per terahash), but all of them are bound by the ratio between the price of electricity and the price of cryptocurrency.
The lower the price of electricity, the less cryptocurrency the miner needs to sell, but if the price of cryptocurrency is lower, the miner will sell a higher portion of his profits to cover his/her electricity bills.
As there are always new miners on the market, older machines operate until they hit this level, at which stage the ASIC is no longer competitive and is shut down. Thus, the break-even or shutdown price is the equilibrium between the difficulty of the network, the output of the miner, the cost of energy, and the sale price, which together determine the price of the development of bitcoin.