Ethereum (ETH) Staking or Mining | Which is More Profitable? (SURPRISING RESULTS)
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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...
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 more profitable? We calculated the costs of buying mining equipment (hash rate), electricity costs etc. and the daily profits from Ethereum staking and mining.
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0:00 Introduction
1:47 Mining: What is it? How to get started.
8:27 Mining: Approximate cost and profit calculations.
12:21 Staking: Approximate cost and profit calculations.
13:25 Mining vs Staking: Profit calculations compared (estimate only).
16:14 Mining vs Staking: Some factors affecting profitability.
17:32 Mining vs Staking: Verdict- which one is more profitable?
●▬▬▬▬▬▬▬About▬▬▬▬▬▬▬●
🔷 What is Ethereum Mining?🔷
Ethereum is one of the easiest cryptocurrencies to mine, using idle computer resources to earn daily revenue in Ethereum (ETH). This is especially true if you have a high end computer, as they usually have the necessary hardware to mine Ethereum. In order to get mining, you’ll need a Graphics Processing Unit(GPU). GPUs are usually in gaming computers and high-end computers (eg MacBook Pro or Dell XPS). Miners frequently sell mined Ethereum on top cryptocurrency exchanges or Over-the-Counter to generate passive income.
👉 Learn more about Ethereum mining:
https://boxmining.com/ethereum-mining-guide/
🔶How to Stake Ethereum 2.0?🔶
Staking on Ethereum 2.0 is finally live. However, the process of connecting your Ethereum (ETH) coins can be a bit tricky. It’s not all about sending 32 ETH to the contract. Doing so would end up with you losing your funds. You can stake Ethereum 2.0 by using AllNodes, a non-custodial platform for hosting nodes.
👉 Learn more about Ethereum 2.0 (ETH 2.0) staking:
https://boxmining.com/eth2-staking-guide-allnodes/
#Ethereum #Staking #Mining #Cryptocurrency
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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...
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? And then when you have six and you guys need to stack these and you need to be like 600, right? So this is the start of that. But anyway, so what is this? This is a box that you can literally put GPUs inside. So it's kind of like a empty shell. It's very heavy too. I totally should not be manhandling it like this. But anyway, that's life. But this is something that I kind of saw. I can see in the back where you can just put your GPUs inside and you can start mining. And in this video, I'll be answering some dying questions. Like, is it even safe to buy random hardware like this from China? And secondly, I'll be answering the very important question. Which one is more profitable? Mining or staking? So anyway, stay tuned for this episode. I'm super excited to show you guys what the results are. And also, if you haven't done so, remember to subscribe and everything. All that cool stuff. Click like too. So back in the day when I got into mining, I used something like this, which is kind of like very haphazard, right? It's just a metal frame rack that you stick GPUs in. And, you know, your power supply is exposed. It's not the most pleasant thing to have in your living room when you're kind of have guests over and you're like, what's that? You know, what is this monster? And why is it so noisy? So I'm hoping with this that I can just kind of shove it into some sort of spare room. It's easy to pack. Maybe you can even put stuff on top of it. So this is what kind of piqued my curiosity. I found this on Taobao. So this is kind of the Chinese version of AliExpress. I'm not really sure if they kind of delivered this overseas, but it kind of really made me curious when I saw it because it's like a neat container to put everything inside, right? And kind of what's so neat about it is it kind of gets rid of you have to buy stuff. So if you understand Chinese here, it tells you, yo, they've got a motherboard inside. They got an SSD inside. They've also got a power supply that's plenty powerful case here. So it's like got a 1,650 watt power supply. So literally in many aspects and many reasons why I bought this right now is because it's getting a little bit chilly in here. So 1,650 watt space heater. We're also going to compete and see like wool mining, right? Because this channel is called Box Money and it goes back to the roots a little bit. Will mining out compete staking? You know, as if so, and the future of this channel more geared towards staking and should we just lose mining altogether? Because which one's more profitable, right? You want to do what's most profitable with your time, right? So I got this GPU. We're going to start testing this out on this channel. We're going to start doing that competition. But first, let's take a look at what's kind of inside. I just opened the machine up and see what's inside. All right. It doesn't seem to be too complicated inside. So this is what comes out of the machine straight away. Okay. So inside the machine, you have the power supply. It doesn't really say brand on here. So this is kind of the heart of the power side of the unit, but it has a lot of connectors. So the whole idea, I mean, everything is kind of connected in terms of a computer side. So all you really have to do is kind of plug and play these graphics cards inside. So what else is inside? The motherboard is already set up. It's on the D1000 BTC. It should be ETH, right? I'm sure the marketing department had a little snafu there. You can't really mind BTC on graphics cards. But anyways, that's being technical. All right. So everything else is hooked on here for us. It's like, it's not really complicated. There is an SSD connected inside. So to probably use something very cheap. I mean, if you think about it, so in terms of pricing, this was roughly, so this whole entire unit itself was $267. I mean, come on. And there's like, there's PSUs or power supplies that cost more than that. So this is definitely a steal, definitely a bargain for what you're getting, like in terms of pricing. It already includes like everything you need to get to get started. So that's the kind of the beauty of these Chinese made products. They're like razor thin margins, right? Razor thin margins. Now, does it have RAM? Let me see. This is unexpected. So it uses laptop RAM. So I'm not sure why you need to save space on here. I mean, it uses four gigabytes of DDR3 and it's made by Kunion. So what I'm going to do right now is I'm just going to start installing a single graphics card. So this graphics card is kind of the first of many, I would say. It has enough space for six of them here. In terms of power supply, I think it doesn't have enough power for six of the new modern ones. So the new modern, you know, third generation NVIDIA graphics card, they'll be consuming around 300 watts of power. So if you multiply by six, that's 1,600, sorry, 1,800, not 600, 1,800 watts of power. And that's more than this power supply can handle. So very likely I'll go for either four or five graphics cards here, depending on availability. What I'm going to slot in, what I'm planning to slot in is the 3070. It's kind of, it's kind of like maybe making sure it fits in the space. All right, it seems to have to remove this little kind of integral, this structural frame here. So now I can slot this in. All right, so lucky for me, they did come with an accessories box to kind of include all the screws to get everything started. So I've got the graphics card inside already. It's kind of, I felt kind of weird to put it inside. I felt like because this motherboard is kind of like a sloppy motherboard, it doesn't clip in as usual. So I kind of have to, you know, kind of just make sure that it's really in before I kind of get started. In terms of the power supply, it has a lot of these PCI Express power ports. It does look like a big disaster. Like, it's not like a modular power supply where you know where it's connected to. Like, here you're just hoping for the best. All right, I just powered it on and it definitely sounds like a wind turbine in here. It is, it's because like they're using these industrial fans. All right, so I just powered it on. My hair is a mess because I was running around, but it seems like it's not posting. It's not, it doesn't want to post. So it might be the case that it prioritizes a VGA connection on the back of the motherboard. So I'm going to try that out. Fingers crossed it works. It might also be that I played with a RAM just now and I just broke it. So we'll see. All right, success. I just posted. It doesn't have, it seems like it's, I say, please select a proper boot device. That means it doesn't have the Windows inside installed in there, but that's okay. I mean, we're going to be able to install our own Windows. We can even install some for a mining OS. I'm not concerned. So long as it posts, we're good. One of the concerns here is obviously the noise. I'm pretty sure you can hear that in this recording. It is super loud. It's definitely not designed to be placed inside a regular room. It's, it's a server machine, right? So I guess, you know, that's the beauty of it. All right. Now comes the most important part for any miner, which is the math. It's the funnest, funnest, funnest part of all this. All right. So what do we have here? So what's the plan? So the plan is to fit in the RTX 3070, and this is the price I can get it in Hong Kong. So this is kind of the one that I can just go downstairs and pick that up at $4,999 Hong Kong dollars, which roughly is around $593 USD. And I tested this myself, and the hash rate is around 53 right now. So that's, we'll keep that in mind for when we do the profit calculations. Now, this case that I bought is bought from China. And it's in terms of renminbi, it's $1,750. So USD, it's $267. So that's kind of the cost of the unit. I'm going to say I'm going to put four in there for now. So like I said, it's mostly due to power constraints. All right. So roughly speaking, it'll cost around $2,640, not including shipping, of course. You probably have to add a little bit on for shipping. And we can expect the hash rate to be around four times of this. All right. So 212 mega hash per day. So now comes the calculation part. So you have in terms of ETH hash, 212 mega hashes per day. Voltage, I'm going to put roughly to 1,200 right now, just for calculations. I'm going to hit the calculation button. So this is going to calculate the profitability for this unit. Wow. It's not that good. Okay. So I'm looking at these numbers. This is for Ethereum. So in terms of a revenue, in terms of how much I'm going to make per day, it's roughly around $7.55. But in terms of the profit, right, because I'm burning electricity like nobody's business, that's roughly around $2.65 for my projected unit per day. All right. To be honest, I'm a little bit disappointed at these numbers. I mean, they're not phenomenal by any means, right? If I'm going to make $2 per day, it's a lot of effort and a lot of fighting for graphics cards to make that. Obviously, I'm using numbers that are not optimized. I think we can probably push these numbers a little bit more to optimize them, maybe squeeze another 10, 20% performance out. And it could be possible. I'm going to run these calculations again for Team Red for AMD graphics cards. Reason why I didn't do that at first is because there's very little availability of that in Hong Kong. It's like it's pretty much none. So I'll rerun these once the graphics cards become available so we can figure out what the profitability of that is. And the other reason why it's not super profitable is because of the cost of electricity. So we're factoring the cost of electricity at around $0.17 per kilowatt hour, which roughly is what Hong Kong is charging for residential power. So this is where miners want to move to countries with very cheap power. So say, for example, if you get a super good deal, and I've heard of these good deals before where it's like around $0.03 or even $0.02 is how low you can go for the price of electricity. But if you can actually get this cheap of a power, you can be making around $6 for one of these units. And, you know, depending on how you scale, it might even be better because you can probably squeeze a little bit more performance out for each graphics card. I'm using the most conservative estimates here. So anyways, you can squeeze a little bit more out and that will be kind of bananas. Right. So anyways, for me personally, my spreadsheet, I'm just going to use the numbers I have because I am going to mine in Hong Kong. And, you know, the electricity causes as it is. Now, is it competitive relative to staking? This is one of the biggest questions I'm asking myself here. So what can we expect on the staking side? So staking needs 32 EF. So the upfront costs a lot more. All right. So upfront cost here is around, at this current point, $17,000. Now, what do you expect to make from staking? So in terms of profitability, so this is my node that I started on as I'm running this on all nodes. And you can see that the profitability of this, I'm just going to go here to my node itself. You can see roughly we're making around 0.0141 EF per day. All right. So that's ETH to USD. So it's around $7 per day. So that's the revenue. In terms of cost of running the node, node costs, because the node doesn't really take a lot of power. Roughly, it's around $10 per month. So it's equal to 10 divided by 28. Let me just say it's 28 days. So it's right now it's running at 35 cents per day. So now obviously we have to make it comparable, right? So it's the same kind of investment amount. All right. Now comes some more fun maths. Okay. So let's say because these numbers were not initially comparable profit per day, because the invested amount is not the same. So I'm just saying, if you invested 32 ETH into mining, what would your profit per day be like? So I kind of just scaled it up. So we get roughly $17, $17.8 profit per day. So it's actually, you actually get more profit per day in mining than staking. However, however, you do have deprecation of mining equipment costs. Because when you're mining, you're using these graphics cards. And over time, they become less and less valuable, especially, you know, gamers don't want them anymore. New generations are going to come out, you're going to have deprecation of gear. But whilst with staking, on the other hand, your 32 ETH will still be 32 ETH at the end, right? That's the beauty of staking. You're not really using up your ETH to do so. So this is where the math gets a little bit harder. And there's a lot of assumptions here. So you got to kind of bear with me for some assumptions that you take. So in terms of the pure revenue, so I guess not, I guess pure revenue from mining. So you get profit per day times, I'll say two years. So 730 days. So you get around 12K, almost 13K in terms of that revenue. In terms of staking side, you'll only get around 5K. So that's after five years. But after five years on staking side, you're going to be this plus your initial 32 ETH, which is 23K. Right? So that's what you're going to be left with. Now on the mining side, I'm going to make a huge assumption. I'm going to assume that the gear deprecates by 70%. I mean, that's gaming Harvard. Let's assume that NVIDIA makes some cool graphics cards. So we're going to add the initial invested amount times 0.3. So yes, 0.7 was lost in the process. So let's see. So total after two years, if you're mining, you end up with very little gain. Yeah. So you end up with 18K on this side. So yet again, this is with heavy assumptions. I mean, if you're a good salesman and you manage to sell something, your mining gear at like 50% of its original price, then you're going to get better numbers here on that respect. So taking into like, if you're, you know, if deprecation is very strong here, I would say that mining after two years is not as profitable as staking. Am I surprised by these numbers? A little bit. I would have thought that mining because it's more effort involved would be more profitable. I was kind of hoping that, but I think the key, one of the key reasons why it's not profitable for me, right? And this is, these are numbers are geared towards me because I'm not, you know, buying cheap electricity in China, et cetera. This is because of the expensive electricity costs in Hong Kong. But I think if you, if you kind of dialed up the numbers, if you said, you know, if you have two cent electricity for miners, let's say your two cent electricity, your profit per day would be around 6.67. That will make a drastically big difference. 6.67. That will make a huge difference. Right. So yeah. So mining would be, I'll just put that 6.67 into this calculator and boom, you're going to end up with like way more money on the mining side of everything. But yeah, I think, so that's the key here. So if you have very cheap electricity, you're going to have, it's going to be more profitable to mine than to stake. But if you have, say, if you have to pay residential electricity prices, then sucks to be you. It's going to be a little bit hard to break even after two years, depending on how, how fat, how well you sell your gear. So that was a thought experiment. That was interesting for me, especially because I really wanted to see which path to go down. Right. I'm to the point where I've tested the waters for both staking and for mining. And honestly, I really wanted to know which side was more profitable. Where can I get my passive income from? At this current point, it does seem like staking is a better option, especially because like the node costs are like bare minimal right now. And it's just much easier to deploy on mass as well. I mean, at the end of the day, clicking a few buttons is much easier than just like installing a bunch of these miners because that thing is loud. But anyways, anyways, guys, I hope you guys enjoyed this video. I hope it was educational. It was different content from I usually put out and hope it was fun. And I hope it was worth my time at the very least. And if I guys want to watch more videos about mining, leave a comment down below. I want definitely want to show you guys how this mining stuff works. And also, if you guys want to watch more videos on staking, I have them here. There's a full guide on how to stake your Ethereum 2.0 node. It does seem to be the better option at this point. So if you guys are interested in passive income, well, check out that staking guide. With that, guys, thank you so much for watching. Hit those likes, hit the subscribe button. Off the next video.