With the current price of Ethereum fast approaching the $1,000 dollar mark, many crypto-newcomers are keen to jump on the mining bandwagon using their own machines. Although it’s technically possible to do this with your home or office machine, the question of whether ETH can be mined with a CPU is secondary to the question about whether you can do so profitably.
In terms of dollars and cents, the amount you’ll earn from mining Ethereum is influenced by a number of factors. These include the mining difficulty, which generally increases over time. Like most cryptocurrencies, Ethereum isn’t pegged to fiat money or backed up by any asset. This means if you’re mining for profit, your earnings are set by the rate determined by your chosen coin exchange.
Other factors which might influence your decision to mine Ethereum include your ‘hash rate’, which relates to the number of calculations your machine can perform at any given time. Generally speaking the higher your hashrate, the greater processing power you can contribute to the network, which increases the reward you’ll receive in ETH. The mining algorithim used by Ethereum, Ethash is designed specifically to be ASIC-resistant, in that unlike with Bitcoin, there’s no real advantage in using custom mining devices with specialised chips to mine ETH.
This said, it’s unlikely that the average laptop or desktop machine CPU will make you rich any time soon. The best way to find out for yourself is firstly to benchmark your computer to determine its current hash rate using specialist software or an online tool such as Bitminter’s testing page. You can then run these numbers through Etherscan’s own mining calculator.
In the example above, the hash rate for an 2.5GHz dual-core Intel Core i5 CPU was entered (roughly 0.25 MH/s). The CPU in this instance is installed in a Mac Mini server, mid 2012 which consumes around 13 Watts when idle. We’ve also assumed that electricity costs are around ten cents per KW/h. All other factors being equal, it would be very difficult to make a profit mining Ethereum using only the CPU.
Unless you have 300 years to spare to mine blocks on your own, you’ll also need join a collective ‘mining pool’ who would deduct a small commission from your profits, eating further into your margin. If you use renewable energy such as solar power or plan to keep your machine running 24 hours a day anyway for work purposes, you can save on electricity costs but this would only generate a few cents a month.
This is generally the reason we recommend doing careful research before you start mining as currently the most profitable ETH is to be had for users with custom ‘rigs’ using dedicated GPU’s. By way of example a rig running a single graphics card equipped with an AMD R9 390X GPU would have a hash rate of around 30 MH/s which would generate a weekly profit of around $20 at the above rates. In reality, miners connect multiple graphics cards to the same rig to maximise their profits.
Having said this, graphics card manufacturers have realised how desperately miners need their GPUs and have priced their devices accordingly. The AMD R9 390X for instance retails for around $600 currently on Amazon. If you already have a machine that you leave switched on 24 hours a day anyway, your startup and running costs are already paid. So far we’ve also discussed proftiability in terms of dollars and cents.
If instead you adopt a ‘buy and hold’ strategy on the small amount of Ethereum you mine with your CPU, you may make a generous profit. Ethereum has climbed in value over 11,000% in the past 12 months and if the trend continues, you may be happy you didn’t immediately cash out the small amounts of ETH you mine. There are also competing cryptocurrencies such as Monero, which can be mined using a CPU.
Above all, remember that CPU mining is an excellent way to familiarize yourself with ETH mining and we strongly encourage you to do this before investing in expensive hardware. If you think you’re ready for investing in expensive hardware, though, we have all the information you might need to get started.