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Should I Start Mining Cryptocurrency

crypto mining things to consider

Many people are interested in mining crypto, but there are a few important things to consider before investing

When cryptocurrency is making headlines it usually means the price is booming and wild stories of overnight riches are circulated every day. Along with the hype, a rush of people who are brand new to the crypto scene start asking themselves the question, “should I start mining?”

You may have seen the TikTok kids showing off their fancy mining rigs, but there are a lot of factors to consider that aren’t shown in those videos. Mining can be fun and profitable, but it’s not for everyone. There are some very important things to consider before you make the investment, and jumping in without doing your due diligence is the absolute best way to lose a lot of money.

Back in the early days of Bitcoin, mining was done on CPUs using whatever old computers you had laying around. One popular option was to take an old laptop, load up the mining software, then hide it away in a closet to quietly work its magic. The Bitcoin which was mined on those laptops was worth almost nothing back then, but those who held on without selling have a small fortune today.

Related: Storing Bitcoin and Crypto

The good old days of CPU mining are long gone from the Bitcoin universe, and most other popular cryptocurrencies as well. CPU mining has been replaced with new methods which are more efficient and specialized: GPU mining and ASIC mining. Both forms of mining are very different from the early days of CPU mining, and their requirements are also much more involved.

A GPU Mining Rig
A GPU Mining Rig

An ASIC Mining Rig
An ASIC Mining Rig

Ventilation and Cooling

Both GPU mining and ASIC mining generate a tremendous amount of heat and require ample ventilation. Each mining rig is the equivalent of a small electric space heater. Even a single rig will raise the temperature of a room by several degrees in just a few minutes. Heat is the enemy of electronics and can cause them to overheat and prematurely fail, which is why proper ventilation is an absolute necessity.

Air conditioning is not a viable option in most scenarios because the added cost will cut severely into profitability. In some cases, it may cause it to be completely unprofitable and lose money. Swamp coolers can work well, but they require maintenance and can only operate in arid regions.

Related: Crypto Mining for Gamers

Open-air ventilation systems are the most common. This generally consists of a fan system that takes in cold air from outside the building to run over the machines, and then the hot air is pushed out the end of the building. To facilitate this, basic tunnels are often constructed out of plywood or other insulating materials to help control the airflow.

Some people have reported success mining in underground structures which naturally remain cool year-round, such as basements and wine cellars. If you’re lucky enough to have access to one, it might be viable for a small amount of equipment. However, the costs of constructing such a facility typically require far more investment than is worth it for a small-scale operation.

Where you are in the world can also have a huge influence on whether or not it makes sense to mine. Hot regions of the world can make mining difficult to impossible. Mining in cold regions is far more attractive, and in some cases the extra heat produced can be put to use in some other beneficial way.


Both GPU mining and ASIC mining produce noise, but the noise level produced per rig can be very different.

GPU mining is usually quieter, but it varies greatly depending on the fan used on the GPU itself. Cheaper GPUs are typically noisier and less efficient than the more expensive GPU models that have larger fans and more effective heat sinks. The hum of a few GPU fans is usually bearable, but over time it can be irritating. It’s best to place GPU miners in an isolated room that is far enough away so the noise can be escaped.

ASIC miners are almost always very loud. Some have described them as sounding like “miniature jet engines” or a “giant swarm of electronic bees”. A miner can produce anywhere from 75-85 decibels of noise. This amount of noise is highly unpleasant and can cause headaches or even hearing loss after prolonged exposure. It can easily be heard through several walls, making this a less viable option for home miners.


Both GPU mining and ASIC mining require a very high amount of electricity to operate. Electricity is the single greatest cost associated with mining, so it is important to have a competitive electricity rate before you even consider mining.

In 2021, the average residential electricity cost in the United States ranges anywhere from $0.09/kWh to $0.30/kWh. The average industrial electricity cost in the United States ranges anywhere from $0.05/kWh to $0.25/kWh.

The most competitive mining facilities around the world typically operate with an electricity cost of $0.03/kWh, and sometimes lower. Large mining facilities benefit from economies of scale to the point that they can negotiate deeply discounted rates in areas with an oversupply of electricity.

If you’re in an area with cheap electricity, you might be able to profit enough to make it worth it even if you don’t have the volume to negotiate lower power from the electric company. If you’re in an area at the higher end of the cost spectrum, it’s probably worth reconsidering your investment.

Electrical Wiring

GPU mining using 220v is generally better because it can be more efficiently utilized by the power supplies. However, mining can also be done on 120v wiring, which is the standard in US households.

ASIC mining usually requires 220v wiring. Sometimes it can be done on 120v wiring (despite the warning that says to use only 220v), but it’s not a good idea since the cables can get very hot, sometimes to the point of melting.

Both GPU mining and ASIC mining operate more efficiently on 220v, meaning you will consume slightly less power on the electricity meter for the same amount of profit. If you only have a couple of rigs, it doesn’t make that much of a difference, but if you have a small farm it adds up.

You can generally have no more than one miner per electrical circuit. A circuit is not the same as a plug socket. A single circuit is often used in a typical residential household for all the outlets in a room, and sometimes multiple rooms. If you try to put more than one miner on a single circuit, it will immediately trip the breaker.

Installing 220v wiring and additional circuits is all possible, but naturally, this comes with additional costs. Unless you’re good friends with an electrician, or you can do it yourself, the investment in additional circuits can cost thousands of dollars. If you’re thinking about mining at home, you can’t use all the circuits for mining because your house also needs electricity. If you exceed the capacity of your breaker box and need more circuits, an additional breaker panel can be added. However, this will also cost thousands of dollars, and generally requires approval from the electric company before it can be installed.

Hardware Costs

The cost of the mining hardware is the largest upfront investment that has to be made, and this is not a one-time occurrence. Even if you purchase the newest equipment that’s available, it is generally only good for mining for 2-3 years before it is obsolete.

GPU mining uses standard consumer hardware, and this means it can be sold in secondary markets after it is no longer usable for mining. Used GPUs still hold a fair amount of value as long as they have not been burned out or damaged from mining.

ASIC miners are specialized for the sole purpose of mining. After they are obsolete for mining, they no longer are of any use. Their resale value drops to almost nothing since only those with the lowest electricity costs in the world will be able to continue using them.


Mining is a reward system that is incentivized through competition. You are in competition with other miners both for the rewards and for the resources used for mining.

During a bull market, the costs of GPUs and ASICs skyrocket. Both are perpetually sold out worldwide, and those available for sale have huge markups. It can be very difficult to get hardware at a reasonable price anywhere.

Sometimes it is possible to get a better deal on hardware by purchasing in bulk, but this requires a large pre-order before the hardware is even produced, generally in the order of a six-figure investment. The order has to be placed in cash, is non-refundable, and manufacturers sometimes will not even commit to a shipment date.

During a bear market, the drop in cryptocurrency prices also causes the reward to drop. Those with the lowest electricity costs and hardware costs always have an advantage. They may remain profitable when other facilities are forced to shut down.

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There is a saying, “during a gold rush, sell shovels”. This refers to the California Gold Rush in 1849. People came to California from all over to prospect for gold, but very few got rich, and many lost money. Most of the people who made money were those who “sold shovels” and other required equipment at record high prices to those who rushed in thinking they would get rich quick.

The best time to invest in mining equipment is during a bear market since there is a surplus of cheap mining equipment on the market. A bear market is also the worst time to sell your used equipment since everyone else is also selling. Plan your strategy accordingly.

Due Diligence

One of the most important things to understand about cryptocurrency mining is that, unlike mining the Earth for valuable materials, there is much less guesswork involved. Using some basic math you can quantify how much you can expect to make each day. Looking at some historical data, you can make projections about how profitability will be in the future even if the market goes up or down.

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If you’re serious about mining, planning is absolutely essential. You need to remove the guesswork and rationally determine if the investment makes sense for you. Buying a bunch of expensive equipment before you’ve crunched the numbers and laid out a plan is how a fool loses money.

Should I Start Mining Cryptocurrency?

That depends…

  • Can you provide adequate ventilation and cooling year-round?
  • Can you provide a location where the noise will not bother anyone?
  • Do you live in a region with inexpensive electricity?
  • Have you calculated projections of what your profitability will be?
  • Can you continue operating if the price of cryptocurrency drops by 90%?
  • Have you put together a clear exit strategy if things go horribly wrong?

If you answered “no” to any of these questions, then it’s probably time to take a few steps back and seriously consider the possibilities. If you can answer “yes” to all of these questions, then it’s time to buy a shovel!


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