Is it profitable to mine altcoin in Australia
Do you know what “altcoin” means?
Altcoin means “alternative to Bitcoin”. They are also digital currencies same as bitcoin. As of this moment (8 August, 2017) there are over 1000 different altcoins. Each one of them has a different technology and story behind them. Some countries has introduce their own coin like “Dubai Coin” which is obvious, “Arctic Coin” which introduced by Russia and “NEO” for China.
Some of the coins you cannot mine and some you can. The most popular ones are Bitcoin, Ethereum, Monero, Zcash and Litecoin, etc. For the purpose of this article, I will not discuss how to do the mining but just discuss about the profitability of mining these coins.
First, you might want to know “Is it profitable to mine Bitcoin?”
The simple answer is NO. You can refer to this article below.
If bitcoin is not profitable to mine then is it profitable to mine altcoins, and I will discuss with you and focus on mining in Australia. Since I live in Australia and I know how much it cost for electricity. The calculation and figures below are in Australia Dollars.
Cost of equipment – mining rig
I will just give an example of using one mining rig with 6 video cards.
To build your mining rig, you will need the following.
- CPU $250
- Motherboard $150
- Power supply $170
- Riser Cards $80
- Rig $100
- SSD hard drive $75
- Mouse and keyboard $25
- RAM $100
- Video cards x 6 $3000
Total= 3950. Lets round it up to $4000 as the cost of the equipment.
Electricity use by the mining rig
The mother board and the CPU would draw around 50 Watt.
Each video card will draw 90 Watt.
Total power consumption is 50 + (90 x 6) =590 Watt. For easy calculation I will make it 600 Watt.
The electricity cost where I live is around $0.21 per Kilowatt. (You can check you electricity bill.)
The electricity use per day = 600 x 24 /1000 Kilowatt = 14.4 Kilowatt
Cost of electricity per day = 14.4 x 0.21 = $3.024
I have used my own computer to do some experiments. I will give you a conservative figure for the earning. I will exclude the CPU mining in my calculation.
Earning per video card is $2
Earning for 6 video cards = 2x 6 = $12
Earning per day = earning – electricity cost = $12 – $3 = $9
Return on investment (ROI)
At you can see, I can make $9 per day with this setup. How long will it takes to get my investment back.
ROI = Setup Cost / 9 = 4000/9 = 450 days
Which is approximately 450/30 = 15 months
So the conclusion – Is it profitable to mine altcoin in Australia?
You see electricity cost is a major factor in the profitability of mining altcoin. In my calculation, it eroded a quarter of the earning. In some countries the electricity cost is very low, then it would very profitable.
The other reason why it is not so good in Australia is because of the cost of hardware is more expensive than in USA. Like the video cards which sold in USA is around US$340 and is equal to roughly A$400, but if you are to buy it in Australia it will cost $500. A huge $100 different and six video cards will cost $600 more. Not to mention all the other parts like CPU and motherboard.
Even though it takes 15 months to break even. I would say it is still worth doing if you consider the long term prospect of mining. Here are the reasons:-
- After you earn back the initial investment after 15 months, from then on it will be pure profit. Since the video cards should be able to run for 3 to 5 years.
- The value of the altcoin increase and your profit will increase. Just take Ethereum as an example, it has increased like 100 times in a very short time and I foresee many of these altcoins will increase in value in the future.
- It is a passive income, you don’t have to do much after you set it up. You just need to check it once a while to see if they are all running well.
- Some people reported they are able to get their return on investment in around 6 month’s time. Which is possible if the coin you are mining increase in value.
- Although some coins have increase in mining difficulty, but you can always pick other coins which are more profitable.
If you are not the kind of people who have the patience to wait for a long term gain, you can invest your $4,000 in buying the coins you want in the exchange. I recommend Coinspot, it is a good Australian company and you can read my review – CoinSpot Review.
The price of the digital market is very volatile and the price could swing up and down very quickly. The result is you can make money quickly but you can also lose money. As for mining, you will get a stable income and you won’t lose all your money even if mining becomes unprofitable. Because you can sell your hardware and get back some of your money.
I like mining because you can scale up your earning and invest more money. If you are able to invest $40,000 for hardware, you earning will increase to $90 a day.
If you have any brilliant idea on how to make more money and think my calculation is not correct, leave me a comment below.