The mining equation
Every mining calculation reduces to the same comparison: the value of the coins your hashrate earns, against the cost of the electricity it takes to earn them.
after pool fee = revenue × (1 − pool fee)
daily electricity = watts ÷ 1000 × 24 × cost per kWh
daily profit = after pool fee − daily electricity
Revenue per terahash per day is the variable that does all the work, and it is set by two things you do not control: network difficulty and the coin price. When difficulty rises, the same machine earns fewer coins. When the price falls, those coins are worth less. The two frequently move against miners at the same time.
A worked example
A 200 TH/s machine drawing 3,400W, at $0.07/kWh and $0.055 per TH per day, on a 2% pool:
| Daily revenue after pool fee | $10.78 |
|---|---|
| Daily electricity | $5.71 |
| Daily profit | $5.07 |
| Monthly profit | $154.34 |
| Payback on $3,000 hardware | 592 days |
Now change one input. At $0.14/kWh the same machine earns $0.64 a day and pays back in over twelve years — which is to say, never, because difficulty will have moved long before then.
Electricity is the whole business
Halve your power cost and profit roughly triples in the example above. No other input has that leverage, which is why industrial mining migrates to stranded hydro, flared gas and curtailed wind rather than competing for grid power at retail rates. A home miner paying residential tariffs is competing against operations paying a third as much for the same electricity.
- Efficiency beats raw hashrate. Joules per terahash determines your cost per coin. A faster but thirstier machine can earn less than a slower efficient one.
- Difficulty only trends one way. Budget for your revenue per TH declining over the life of the hardware, because historically it has.
- Count the hidden costs. Cooling, noise mitigation, hardware failure and the space itself never appear in the headline calculation but are all real.
Mining versus simply buying
The honest comparison for most people is between buying a machine and buying the coin directly with the same money. Mining wins on cheap power and loses on expensive power, and it carries hardware risk that holding does not. If you are weighing a scheduled purchase instead, the DCA calculator models that alternative.
Common questions
How do you calculate mining profitability?
Multiply your hashrate by the current revenue per unit of hashrate, subtract the pool fee, then subtract the cost of the electricity your hardware consumes over the same period.
What electricity price makes mining unprofitable?
It depends on your hardware's efficiency and current network difficulty, but modern machines generally struggle above roughly $0.10 to $0.12 per kWh, and older hardware fails much sooner.
Why does my profit keep falling?
Network difficulty adjusts upward as more hashrate joins, so the same machine earns fewer coins over time. A falling coin price compounds the effect.
What is a realistic payback period?
Under a year is good, one to two years is common and anything longer is speculative, because difficulty increases will usually erode the returns before the machine pays for itself.
Should I mine or just buy the coin?
With very cheap electricity mining can beat buying. At retail power rates, buying the coin directly usually returns more and carries no hardware risk.