A few weeks ago, we published a commentary on the exploding cryptocurrency craze and its impacts on the PC hardware market. Today, as we predicted, the GPU market has been entirely crippled, leaving AMD, Nvidia, and their board partners unsure of how to proceed. Rather than beat that dead horse as other outlets are doing, we're going to look at whether all the folks who've bought up the worldwide supply of GPUs are actually getting rich off of them as they likely hoped they would.
Rather than use the published "stats" on how much money you can make mining Ethereum, which is likely what drove the craze in the first place, we're going to give you some cold, hard numbers, based on component prices, energy prices, Ethereum prices, and yes, real-world hashing rates, as recorded on our Radeon Fury, GTX 1080, and GTX 1080 Ti GPUs. We're going to provide two sets of numbers, one for the day Ethereum hit its peak, and one for today, July 8, 2017. And just to prove that we really do know at least a little about the subject, below is a screenshot of our dual GTX 1080 Ti rig mining Ethereum earlier today. For the record, the GTX 1080 Ti is the fastest mining card on the market at about 31Mh/s at stock speeds. While overclocking the core does nothing to increase its mining speed, a big boost to the memory clockspeed gets us up to about 34Mh/s. No other card can achieve that.
But the GTX 1080 Ti isn't cheap, so don't go thinking you should buy one to mine on. Indeed, let's talk about hardware costs for a moment, and how mining has affected them. In May of 2017, a Radeon RX 580 4GB sold for $200, a GeForce GTX 1060 6GB sold for $230, a GeForce GTX 1070 sold for $390, a GeForce GTX 1080 sold for $500, and a GeForce GTX 1080 Ti sold for $700. As of July 8, 2017, you can no longer buy the RX 580 or GTX 1060, although they're going for about $400-$450 in the grey market, and the cheapest GTX 1070 is $485. The GTX 1080 can be purchased relatively easily, as long as you're willing to pay $570 or more, and the cheapest GTX 1080 Ti cards are going for $720, which all things considered is a pretty good deal.
Now let's talk Etherum prices and mining costs. Ethereum is currently going for $246/coin, down from its peak of $399/coin on June 13. Energy costs vary widely, but we're going to use $0.16/kWh as an average rate. There are also several fees involved - first, the mining software, like Claymore Miner, has a hidden, "small print" fee of 1%, which most people have probably never realized, because they're pulled out before you even see your hashrate. The Nanopool fees (you basically must be part of some pool or another) are also 1%. The "banks" like Coinbase that convert Ethereum to dollars for you are collecting a currency conversion fee, which can vary from 1.5% to 4%.
But there's another element to all this that has not been reported on, and it's pretty close to what we'd consider a scam. Nanopool's developers are skimming a whole lot of Ethereum right off the top, because the default minimum payout is 0.2 Ethereum, which would take a GTX 1060 nearly a month to mine, and even the manually adjusted minimum of .05 Ethereum takes about a week. Nanopool likely knows a lot of people are going to bow out before they ever hit their minium, and everyone is going to stop mining short of their next payout threshold at some point. Essentially, they're running a bank - they get use of your Ethereum until the day that you claim it, but due to the minimum "withdrawal" levels, you are definitely going to leave a whole lot in the vault when you quit. Heaven forbid you change wallets (yes, that's another element of the mining scam) - you'll abandon anything in the previous wallet that's under the minimum payout threshold. And because payments are made automatically, you can't just hold onto your Ethereum until you're ready to withdraw. You get that minimum payout whether you want it or not, leaving behind a bank account full of pennies. Folks, that's just part of the scam.
OK, time to take a look at the numbers, first as they existed on June 13, and then as they existed less than four weeks later, after the mining craze had spiraled out of control:
Based on our own mining work using the GTX 1080, Radeon Fury, and GTX 1080 Ti, we've extrapolated a number of numbers that you'll never find printed anywhere. You'll see Mh/s hashrates posted (and boasted about) everywhere on the Internet, as if they were some glorious frame/second figure in the latest game, but they really don't mean anything until you convert them to Ethereum. Based on our mining experience, we've calculated the incredibly small fraction of Ethereum that you can mine per second based on the hashrates. We've then converted this to a daily amount, calculated costs, and provided a profit figure that subtracts out costs. But take a look at the last two columns: minimum days to payout, and minimum days to recoup the purchase price of the video card. While buying a video card simply to mine with may have made some sense in early June, it's downright idiotic today, especially given that most people are buying GTX 1080 cards at this point, which are terrible mining cards. Assuming that Ethereum maintains its current value, which it most likely will not, it would take a year and a half to recoup the purchase price of a GTX 1080 bought today. And look how many days' worth of Ethereum (i.e., cash) people are going to potentially be giving up when they walk away from this misadventure.
As always, we'll be following the PC component market closely in our DIY PC Buyer's Guides, but due to the scarcity of mid-priced video cards, we've been forced to stop updating a number of the gaming PC buyer's guides, as there simply is no way to build them. And things are going to get worse before they get better, as the DRAM market just took another hit, with 1/6 of worldwide production abruptly taken offline when Micron's fab facility became contaminated in an accident. As a website dedicated to providing sound tech buying advice, we have to be frank with our readers: given current GPU pricing and scarcity, along with the high price of RAM and SSDs, conditions are simply terrible for those looking to build their own PCs.