How to Find Most Profitable ASIC Miner?

In 2018 many new ASIC miners are being released in the cryptocurrency space, each designed to mine a specific algorithm/coin and with varying profitability over time. With all these new miners it can be difficult to work out which is the most profitable, and which you should buy.

Below we go through how to find the most profitable ASIC miner, and how exactly you work out its profitability.

ASIC miners are optimised for certain algorithms

In-case you're not familiar with ASIC miners, they're not like GPUs where you can mine many hundreds of different proof-of-work cryptocurrencies. An ASIC miner is very good at mining one specific proof-of-work algorithm, and so is only efficient at mining coins on that algorithm.

The Antminer Z9 for example is very good at mining Equihash, so would be very efficient at Zcash mining. But if you tried mining Bitcoin with this the efficiency would be very low. Some ASICs can mine several algorithms, but the vast majority are limited to just one.

Factors affecting ASIC miner profitability

Before you calculate profitability of an ASIC, you need to be aware of the general space around that ASIC miner, as if you're not careful the profitability could drop very fast (e.g. a calculation might say that the current return on investment after 1 year is $50k, but then in a few months it could drop to $0). Factors you need to be aware of:

  • Efficiency vs existing hardware. When an ASIC is released, generally it will be more powerful than any existing hardware. If it's significantly more powerful though, like when the Antminer D3 and Antminer A3 were released, it can cause the difficulty of associated coins to rise very fast. For the D3, Dash's difficulty rose so much in the months following its public release that right now this miner is no longer profitable for most people.
  • Generation & architecture. An ASIC will be built on a particular architecture, where the Antminer S9 for example is built on '16nm' architecture, and the GMO Miner B3 is built on 7nm architecture. Generally speaking, the smaller this number is the higher the potential performance. The architecture can indicate 2 things; if it's very old, whatever the next generation is may be much more efficient (e.g. a potential Antminer S11 could be much more efficient than the S9), and if it's very new but only slightly more efficient than existing hardware this can indicate that a manufacturer is new to the space and still perfecting their manufacturing process (such as GMO, where their next generation miner might be more efficient).
  • Price & difficulty. When you calculate the profitability for an ASIC miner, you'd generally use the current price and difficulty in your calculation. Be aware that these change constantly, so the longer you try to estimate profitability the less likely it is for your calculation to be realistic. Estimating the return on investment over say 1 year using the current price & difficulty just isn't practical, as difficulty changes every 2 weeks for say Bitcoin, and price can increase or decrease as much as 5-10% in a single day.

ASIC Profitability calculation

To calculate the profitability of an ASIC miner, you first need to get some data ready beforehand. The data you need:

  • Your electricity cost in kWh (generally this would be between $0.08-$0.25 depending on where you live).
  • The hashpower of your ASIC miner in H/s (e.g. 1kH/s is 1000H/s, 1TH/s is 1000000000000H/s).
  • The power usage of your ASIC miner.
  • The algorithm you can mine with your ASIC.
  • The difficulty & block reward for the coin you're mining (this is specific to a coin, e.g. different Equihash-based coins might each have a different difficulty & block reward).

With these things you can then calculate profitability in lots of different ways. A common method for calulating ASIC miner profitability:

  1. First multiply your hashpower in H/s by the block reward for your target coin (let's call the result of this X).
  2. Next you need to multiply the difficulty by a scaling factor depending on the coin you're mining. If you're mining a SHA256-based coin you might use a scaling factor of 2^32 (4294967296), if using Ethash or CryptoNote you don't need a scaling factor (you can reverse engineer this scaling factor by looking at existing profitability calculators). Let's call the result of this Y.
  3. Divide the result from step 1 by the result from step 2, e.g. X/Y. The result of this equation would be the number of coins you get per second, so if you want to work out how many you'd get per day you might multiply this by 86,400 (as there are 86,400 seconds in 1 day).
  4. Steps 1-3 work out your reward in the form of block rewards. You also get a share of transaction fees which you need to add to this (this varies all the time so most calculators don't include it, you can just estimate it if you want as say 1-4% extra on top of block rewards, or as high as 10% if there are lots of transactions on a particular coin).
  5. If you plan to mine in a pool, some pools charge a fee. Make sure you subtract this fee after steps 1-4.
  6. If you want to see the fiat value of mined coins, you just need to multiple your result by the value of 1 of that coin. e.g. if 1 Bitcoin is worth $5,000, just multiply the number of coins mined by $5,000.
  7. The final step is to take into account electricity. To work this out per hour, you'd multiply your electricity cost per kWh by the power usage of your miner in kW. You'd then multiply this by 24 if you wanted it per day. Subtract whatever this electricity cost is from your result in step 6 (making sure you use the same fiat currency for both steps).

Based on these steps, you can work out the coins you'd get per day for any ASIC miner, and then compare them against each other (we have our own comparison here!). Do keep in mind though that this is an estimate, it's not exact. There are other more accurate ways to work out profitability, but just for the purpose of estimating profitability this method should be fine.

Also be aware that the above calculation uses the current difficulty and price. Over time both of these things will change, so you might want to use a web-based calculator instead that can do more advanced estimations. We posted a separate guide listing various calculators here, or alternatively click here to go directly to our own calculator.

DISCLAIMER: This site cannot substitute for professional investment or financial advice, or independent factual verification. This guide is provided for general informational purposes only. Bitcoin Kit is UK-based and not regulated by the FCA (Financial Conduct Authority). The group of individuals writing these guides are cryptocurrency enthusiasts and investors, not financial advisors. The ideas presented are our analysis, learning & opinions on a range of cryptocurrency topics. Trading or mining any form of cryptocurrency is very high risk, so never invest money you can't afford to lose - you should be prepared to sustain a total loss of all invested money.

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