How to Estimate Mining Profitability Before You Buy Hardware
A simple framework for running the numbers, including the costs most beginners forget.
The core formula
Mining revenue is roughly your share of the network's total hash rate, multiplied by the coins issued per day, multiplied by the coin price. Then you subtract your costs.
Daily revenue = (your hash rate ÷ network hash rate) × blocks per day × (block reward + average fees) × coin price
Daily profit = daily revenue − electricity − pool fees − other running costs
Gather your inputs
- Hash rate and power draw from the manufacturer's spec sheet.
- Electricity price in dollars per kWh, including delivery fees and taxes on your bill.
- Network hash rate and difficulty from a reputable block explorer.
- Pool fee and payout method.
- Hardware cost including shipping and any import fees.
Calculate your power cost
Monthly energy (kWh) = watts ÷ 1,000 × hours per day × 30. Multiply by your price per kWh. Our estimator does this for you.
Stress-test your plan
Run three scenarios: a good case, an expected case, and a bad case where the coin price falls and difficulty rises. If the bad case wipes out your budget, the risk may be too high.
Costs beginners forget
- Hardware loses resale value quickly as newer models arrive.
- Downtime from repairs, power cuts, and network issues.
- Cooling, noise control, and electrical upgrades.
- Taxes. The IRS generally treats mined coins as income at fair market value when received. Keep records and consult a CPA.
Find your break-even
Work out the electricity price at which your daily profit is zero. If your rate is near or above it, mining at home is unlikely to make sense.