Ethereum (ETH) Staking or Mining | Which is More Profitable? (SURPRISING RESULTS)

Boxmining avatar Boxmining
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Ethereum (ETH) staking or mining- which is more profitable? Ethereum is the cryptocurrency used on the Ethereum network. The launch of Ethereum 2.0 introduced the idea of staking. But which one is mor...

AI Analysis

Here's a full summary of the video comparing Ethereum staking and mining profitability:

This video dives into a head-to-head battle between Ethereum mining and staking to figure out which one is more profitable for generating passive income. It’s a super practical look, as the presenter actually buys and sets up a dedicated mining rig, then compares its potential earnings against the passive returns from staking 32 ETH, factoring in all the costs and assumptions like electricity prices and equipment depreciation. The results are quite surprising and highlight that a major factor shifts the scales.

* The video kicks off with the presenter unboxing a "box mining" rig from Taobao, which is essentially a pre-assembled case with a motherboard, SSD, and power supply, ready for GPUs. This unit cost a surprisingly low $267 USD, which is a steal considering a powerful PSU alone can cost more.
* This new mining rig is a significant upgrade from older, "haphazard" open-air metal frame rigs, as it's more enclosed and designed to be less obtrusive and noisy, making it easier to place in a spare room.
* Setting up the rig involved installing an NVIDIA RTX 3070 graphics card, which was a bit tricky due to the motherboard's loose fit and initial "no post" issues, eventually resolved by connecting a VGA cable and installing an OS.
* A key concern with the rig is its extreme loudness, as it uses industrial fans, making it unsuitable for a regular living space. The presenter notes it sounds like a "wind turbine."
* For mining profitability, the presenter calculates with four RTX 3070 GPUs (due to power constraints on the 1650W PSU), costing around $2,640 USD for the GPUs and the case. This setup is estimated to produce a total hash rate of 212 MH/s.
Using Hong Kong's residential electricity cost of $0.17 per kilowatt-hour, the daily revenue from this mining setup is about $7.55, but the profit* after electricity costs drops significantly to a disappointing $2.65 per day. The presenter admits he's "a little bit disappointed" with these numbers, feeling it's a lot of effort for such a small daily return.
* He emphasizes that low electricity costs are crucial for mining profitability; at $0.02-$0.03 per kilowatt-hour, the daily profit could jump to $6.67 per unit, making mining "bananas" profitable. However, this isn't his reality in Hong Kong.
* Moving to staking, an upfront investment of 32 ETH is required, which translates to about $17,000 USD at the time of recording.
* The presenter's current staking node (running on Allnodes) generates about 0.0141 ETH per day, which is approximately $7 USD in daily revenue. The operational cost of running a staking node is minimal, around $10 per month or $0.35 per day.
* To make a fair comparison, the presenter scales the mining profit to an equivalent investment of $17,000. If you invested that much into mining rigs (roughly 6.4 units), the daily profit would be around $17.80, which is significantly higher than the $7 from staking.
* However, the major differentiating factor is equipment depreciation for mining. Graphics cards lose value over time, especially as new generations are released. The presenter assumes a conservative 70% depreciation over two years for mining gear.
* In contrast, with staking, your initial 32 ETH remains intact, and you earn additional ETH on top of it.
* After a two-year projection, even with a higher daily profit from mining, the depreciation of the hardware means the total return (including the value of the remaining gear) is estimated to be less profitable than staking, which retains the full value of the initial 32 ETH plus earned rewards.
* The presenter concludes that for him, given Hong Kong's electricity prices, staking is the better option for passive income. It's much easier to deploy and manage (just a few clicks) compared to the noise, physical effort, and depreciation risks associated with mining.
The overarching takeaway is that unless* you have access to extremely cheap electricity (like $0.02-$0.03/kWh), staking is generally the more profitable and less hassle-intensive path for earning passive income with Ethereum.

Transcript

So this monster of a beast just arrived in my mailbox. Holy crap, it is huge. And guess what it is? It's literally box mining. This is one of the things that really piqued my curiosity because, you know, in the past, I've done mining in different ways, right? So in the past, I've started mining in my PC, just kind of normally speaking. But you need to wait for that to scale, right? You can't just have one GPU. That's not enough. You know, it's just like $2 a day. You need to have six, right? An...