When you start to explore your options with mining cryptocurrency, there is a substantial amount that you will want to learn if you want to be successful. You need to learn about the various mining hardware options, along with colocation, how the mining operation will work, and whether you should join a pool, for example. You will also see quite a bit of information that talks about watts and kWh when it comes to this field and the machinery in use, and you might be wondering why this might be important to digital currency.
Your Profitability
The answer tends to be rather simple, actually. The mining rigs that you are using need to have power to run properly and to do their job. Different rigs, depending on how powerful they are, will consume a different amount of power during their operation. Naturally, you will have to pay for this power, and if the price of electricity in your area tends to be high, it means that you are going to be paying more than other miners who live in areas with cheaper electricity. Ultimately, this is going to affect your profitability.
While this might not be the first thing on the mind of new cryptocurrency miners, it should certainly be one of the factors that you consider heavily when you are setting up your mining rig.
You will want to run the numbers for just how much it is going to cost you to run your system from your home. Consider the kWh price in your area, with the number of watts consumed by your rig on a daily basis. You will find that all of the mining hardware devices will have an indication of their power usage in their specifications. The Antminer S9, for example, uses 1,350 watts.
When you are calculating, make sure that you understand just how the companies in your area are charging. There are different rates depending on the area. For example, the rates vary based on whether it is a residence, an industrial area, or a commercial business.
What If Your Rate Is Too High?
Many people who want to get into mining digital currency find out that the rate running the machines in their area is simply too high to be truly profitable. Even those who can make a profit might be discouraged at just how much they have to pay for power and how much that is cutting into their profit.
If that is the case with you, keep in mind that you do not have to mine in your own area. This means that you can look for other areas in your state, other states, and other countries to find lower electricity rates. You can find areas that have low rates, and then you can work with a colocation company to have your mining machines set up to start mining in those areas. This means you will be using far less electricity in your setup, and that means you can make a faster and better profit.
If you were to continue mining in an area with high electricity rates, it would mean it is going to take you much longer to break even on your mining hardware costs. Even after you have broken even, there will still be money that is essentially lost if you are paying too much in electricity.
As you can see, understanding the kWh is essential when it comes to mining for cryptocurrency. Make sure these calculations are a part of your process when you are getting ready to purchase your hardware.
