Drop in Energy And Cryptocurrency Prices Makes Ethereum Mining Less Profitable

Drop of Energy And Prices Cryptocurrency Makes Ethereum Mining Less Profitable
Photo by Karolina Grabowska from Pexels

For the first time since 2020, rising energy prices combined with a sharp drop in the price of Ethereum have rendered GPU mining unprofitable for many miners.

Ethereum mining has become unprofitable for many miners connected to a standard energy grid for the first time since 2020. While energy prices are soaring, the cost of Ethereum has dipped below $1,250.

Electricity costs over $0.22 per kWh in states like New England, Connecticut, Maine, Massachusetts, New Hampshire, and Rhode Island.

Miners will pay roughly $1.85-$2.13 per day in power if they use a single Nvidia 3090 overclocked to create 130mh/s.

At today’s price, a good Ethereum reward for the same GPU is only (0.001625 ETH) $2.03. As a result, every miner paying more than $0.245 for power is now paying more than the value of Ethereum being mined.

At this point, turning off the mining machine and purchasing Ethereum spots with the money saved on electricity becomes more cost-effective. Mining using GPUs has become increasingly less profitable over time. The best cryptocurrency to mine with a GPU is still Ethereum, which means the others are much less profitable. The graph below depicts the profitability of Ethereum over time.

Alternatives To Mining

A GPU can be used to mine a variety of alternative coins. The others, on the other hand, are far lower. Using a single Nvidia 3090, Ergo generates -$0.06, RavenCoin -$0.58/day, Ethereum Classic -$0.66, and Firo -$0.70 at $0.245kwh. When Ethereum ultimately switches to proof of stake, these are the competitors for GPU hash rate.

According to Cryptoslate, The problem is that as the number of miners on the network grows, the mining difficulty rises drastically, necessitating a significant increase in the price of the tokens to be remotely profitable.

Either the difficulty must be reduced, or the price must rise above $1,400 for Ethereum to become viable again. Should energy prices fall below $0.24kwh to meet average expenses in other parts of the US?