Cryptocurrency mining in Germany is becoming questionable due to increased electricity tariffs. Is it profitable to mine on video cards at home?
One of the most popular earnings on cryptocurrency was, is and remains mining. However, in recent years, it is extremely dependent on the location in a particular country. And it’s all about electricity prices. For example, Germany has some of the highest electricity prices in Europe. Add to this a strong increase in utility prices after the start of the conflict between Russia and Ukraine, and we get the question: how profitable and relevant is cryptocurrency mining in Germany in 2022?
What is mining?
To begin with, we will briefly describe the very essence of cryptocurrency mining, so that any reader can understand the meaning of the article. Mining is the extraction of cryptocurrency using a computer or special equipment.
For example, you can use gaming graphics cards. They work at full capacity, spend a large amount of electricity in order to use complex computational algorithms to find a special code, close a block with transactions in the blockchain and receive a reward in the form of a cryptocurrency for it.
You can mine bitcoin, ether and many other cryptocurrencies.
Cryptocurrency mining in Germany: input data for the experiment
Let’s conduct a theoretical experiment to understand whether it is profitable to engage in home mining in Germany or it will only bring losses.
Let’s start by declaring some input data. Firstly, everything that will be written below is true for the so-called home or cluster mining. This is when anyone can build a small mining farm at home and have passive income on a small scale for themselves.
Secondly, we will use video cards for mining, and not special equipment. They are cheaper, less noisy and can be easily resold.
And thirdly, the mining farm will mine the Ethereum cryptocurrency. The most optimal for mining on video cards in 2022.
Cryptocurrency mining in Germany: basic data for the experiment
In order to calculate the approximate earnings from mining, there are mining calculators. They are all about the same. Let’s take the most popular option.
The following data is required:
- The power or hashrate of the video card (a value that will allow you to understand how fast the video card can mine cryptocurrency);
- The cost of electricity in Germany (kilowatt-hour);
- Energy consumption (how much energy all cards together will consume);
- The pool fee is an insignificant indicator that can be neglected in this experiment. Let’s put it at a conditional level of 1%.
For a theoretical experiment, you can take any video card that has good power. In this case, we will use the most common and relatively cheap AMD Radeon RX 580 8 GB video card. The power (hashrate), as well as the energy consumption of a given video card (or any other) can be viewed on one of the thematic sites.
In our case, the card has an average hashrate of 29. And the power consumption is 130 watts. One card costs approximately 300–350 euros. Imagine that we made a mining farm for 5 such cards, which is equivalent to 1700 euros on average. And also it is worth considering additional equipment about 300 euros. These are our costs.
However, in the case of Germany, remembering our costs is not necessary. And that’s why. According to official statistics Eurostat Germany has one of the most expensive electricity tariffs. Before the crisis (2021-2022), it was about 32 euro cents. We substitute everything into the calculator and get a disappointing picture.
Cryptocurrency mining in Germany: results of the experiment and why mining is unprofitable
When substituting the data that was described above (we take into account that, first of all, 5 cards give a power of 650 watts, each 130), it turns out that the maximum profit per month is $30. And no more than $400 per year, provided that the video cards do not break. And also there will be no force majeure circumstances. The payback of such a farm is more than 4 years. So this business is unprofitable.
So far, there is no fresh, official and extremely accurate data on the increase in electricity tariffs since the crisis began at the end of February 2022. But even if you take a conditional 41 eurocents, you will work at 0. And if the tariff goes up, then your home mining business will only incur losses.
As a result, it can be said that, given the data presented, given the constant increase in electricity tariffs, it is not profitable to engage in home mining on a small scale in Germany.
Of course, this does not mean that mining in Germany has completely died out. There are industrial mining farms worth hundreds of thousands or millions of euros. They work according to other laws and can make a profit. Or perhaps the craftsmen can find workarounds and loopholes. Look for other equipment, etc. And as a result, earn a little money on the extraction of cryptocurrency. But if we are talking about an ordinary person who wants to try himself as a miner for the first time with very little investment, in the current realities this is almost impossible.