Almost all GPU mining farms are unprofitable at this point. This was to be expected in the dips. After the 2013 surge the exact same thing happened. Suddenly the prices got so low that running the GPU farm became a break even at best and at that point you might as well shut down the machines. In this situation a lot of miners will keep going figuring that they will keep stacking up coins and then the prices will go up but there will be a lot of miners who aren't as well capitalized who will be forced to sell out of their coins and out of their rigs pressing the prices lower and lower and lower.

The picture above is a thumbnail from VoskCoin. He recently made a video saying his 50 GPU Farm was earning less than $10 / day. He is a good honest guy and his YouTube channel in my mind is one of the top 5 most valuable channels on YouTube in the crypto space.

Once again he is a great guy and I hate to see this happen to miners but people over extend and then when crypto drops like a guillotine suddenly they have mined coins that lost 90% of their value and they have a bunch of computer hardware that is a depreciating asset.

Suddenly there ends up being an oversupply of GPUs on the secondary market so they have depreciated worse than they would have during normal times.

Mining Rules For Small To Medium Sized Farms

1. Never buy ASICs. You won't get a good price and you will end up with paper weights.
2. If crypto is in a parabolic phase don't FOMO into buying more rigs. The profitability will always work its way back to ZERO and you will likely end up worse than the people FOMOing in who are just purchasing coins.
3. Don't bother building out a mining farm unless you have power under $0.06 / kwh. That is even pushing it. You really need to be under $0.04 / kwh. If you are paying residential power at $0.10 /kwh you can forget about it. You are going to take a beating.
4. Don't mine in hot climates. The ambient temperature around your rigs ends up being a big deal and if you have to spend too much cooling down the area and getting airflow it is going to eat at your profitability even more.
5. That pretty much leaves us with mining in Eastern Washington, Minot North Dakota, and a few other places in the United States where power is cheap and the climate isn't too hot.

In Conclusion

A prolonged period where mining is unprofitable can cause the prices to be held down longer because people can't pay their electricity and pay off their equipment. They attempt to sell coins to do this but the power bill keep catching up to you.

As prices stay low more miners get crushed and have to call it quits. The only miners who can survive are the ones with the deepest pockets, the best supply hookup for equipment, and the cheapest power. Even they get to a point where they are at a break even or a loss during the worst of times.

I hate to say it but until we see the majority of miners washed out we might not hit bottoms on the prices.

Is GPU mining dead?

No, it will eventually come back but in a slightly different form. Different algorithms and different GPUs will rule the landscape. In 2013 / 2014 we didn't mine with Nvidia cards. We were all using AMD R9 Series Radeons. Eventually ASICS get built for the coins everyone was mining and so coins have to switch algorithms or new coins kind of take over that have different algorithms that don't have ASIC chips manufactured for them yet.

I love mining but history seems to repeat itself. Mining ends up being about timing as well. You have to sell your rigs and sell your coins when the prices are way otherwise when it comes down you can get crushed.

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