GPU Mining No Longer Profitable After Ethereum Merge

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Just one day after the Ethereum Merge, where the cryptocoin successfully switched from Proof of Work (PoW) to Proof of Stake (PoS), profitability of GPU mining has completely collapsed. That means the best graphics cards should finally be back where they belonged, in your gaming PC, just as god intended. That’s a quick drop, considering yesterday there were still a few cryptocurrencies that were technically profitable.

Looking at WhatToMine (opens in new tab), and using the standard $0.10 per kWh, the best-case results are with the GeForce RTX 3090 and Radeon RX 6800 and 6800 XT. Those are technically showing slightly positive results, to the tune of around $0.06 per day after power costs. However, that doesn’t factor in the cost of the PC power, or the wear and tear on your graphics card.

Even at a slightly positive net result, it would still take over 20 years to break even on the cost of an RX 6800. We say that tongue-in-cheek, because if there’s one thing we know for certain, it’s that no one can predict what the cryptocurrency market will look like even one year out, never mind 20 years in the future. It’s a volatile market, and there are definitely lots of groups and individuals hoping to figure out a way to Make GPU Mining Profitable Again (MGMPA hats inbound…)

Will anything every recapture the highs of Ethereum mining? Perhaps, but I wouldn’t bet on it. I also wouldn’t be against it. It will either happen or it won’t, and I’m not going to worry much more about it.

In the meantime, here’s a quick rundown of the current profitability — or non-profitability — of the current generation graphics cards.

Of the 21 current generation graphics cards from the AMD RX 6000-series and the Nvidia RTX 30-series, only five are theoretically profitable right now, and those are all just barely in the black. This is using data from NiceHash and WhatToMine, so perhaps there are ways to tune other GPUs to get into the net positive, but the bottom line is that no one should be using GPUs for mining right now, and certainly not buying more GPUs for mining purposes.

Sure, you could make the argument that cryptocurrency valuations might go back up again in the future, and so you could mine at a loss until that happens. But if you really believe that, why bother investing potentially thousands of dollars into PC hardware to mine at a very low rate, when you could just invest directly in whatever coin(s) you happen to like?

As we noted in our recent GPU price check right before The Merge happened, it’s difficult to imagine any scenario in which a lot of the former mining GPUs don’t end up being sold at secondhand markets like eBay in the coming months. Factor in the warehouse space, power costs, personnel to run everything, and other infrastructure considerations, and even ultra cheap power doesn’t make GPU mining sensible. It’s a good time for mining farms to either pocket their earnings and sell off their remaining inventory, or cut their losses and close up shop.

Buying a used graphics card looks like it’s set to become far more tempting in the near future, in other words. Our advice: buy from an established seller on a market (like eBay) that allows for returns. Conversely, don’t pay cash to someone from Facebook Marketplace that you have to meet in a parking lot, and definitely don’t send anyone BTC or ETH for a used card.

This is all great news for gamers, who for the most part have spent most of the last year making do with whatever card they had before the the cryptocurrency boom of late 2020. It means AMD and Nvidia aren’t going to be able to charge high prices for any GPU that they hope to sell in large quantities. We might see RTX 4090 and RX 7900 XT launch with initially high MSRPs, but just like the RTX 3090 Ti and RX 6950 XT quickly fell below their launch MSRPs, the same will happen with the upcoming Nvidia Ada and AMD RDNA 3 GPUs.

If you’re looking to build a new gaming PC or upgrade your existing graphics card, just wait a little longer and definitely don’t buy any graphics card for more than $500. Prices on existing GPUs will continue to drop, and the new stuff is right around the corner.

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