When you start doing mining, the last thing that passes through your mind is if it is profitable. When you start with it, it is more research than anything. Soon, you will realize that it could be profitable. And why not, today (May 2nd, 2017) Ethereum price is around 82 USD (116 CAD approx)!

In 2016, I was able to build a Mining Rig using Mageia. I must confess it was working, I was able to produce about 4 ETH's monthly. But at that time, ETH price was about 15 USD, and in December I decided to turn it off. It was not profitable at all, not to mention the negative cash flows it was producing.

One of the big issues of this activity is the negative cash flow it produces. Bills must be paid on time, in other words, the power bill. It will pass some days or months before you can cash your tokens. So, because of this, I will propose a way to decide when it is convenient to turn on your rig and when it is not. I will not talk about the technical aspects, for example when you turn on or off automatically the rig based on the Ethereum price.

The Cost of the Electricity in Ontario

For all who are not familiar with Ontario, Canada. The company that manages the electricity is Hydro. When talking about how much the kWh costs, it is tricky. There are three time zones, each time zone has its own price that it is well defined. My last bill has the following rates:

  • On-Peak at a price of 0.087 CAD/kWh
  • Mid-Peak at a price of 0.132 CAD/kWh
  • Off-Peak at a price of 0.18 CAD/kWh

The details about this rates can be found at the Time of Use webpage (in my case from HydroOttawa). Oh my god! I am reading that rates are going to low on May 1st, 2017! Because the rig it is turned on all time, it is fair to say that:

  • On-Peak is 6 out of 24 hours, equivalent to 25%
  • Mid-Peak is 6 out of 24 hours, equivalent to 25%
  • Off-Peak is 12 out of 12 hours, equivalent to 50%

I have verified this with Summer and Winter rates. The hours assigned to each peak-zone are the same. With this data, we can do a weighted average which it is: 0.14475 CAD/kWh

This is the easy part. The tricky part is the delivery charges. According to the Delivery Charge from Hydro Ottawa, it is 3.35%, but when I was doing my maths, I couldn't get a closer number. So, after taking some past electricity bills, I did a very simple linear equation:

f(x) = ((x - 572.62) / 34.11) * 0.93 + 34.21

This formula will give me a proportional projection of the delivery charges per kWh.

Is It Profitable?

In 2016, I was able to mine 4.5 ETH's monthly with a 24 MH rig. So, to keep conservative numbers, let us round it to 4 ETH's per month. 4 ETH means 464 CAD of monthly income.

My rig, according to the power supply, uses 750 Watts, which it means it is 0.75 kWh. You can do your own conversions by googling it, I found this Watt calculator.

So:

  • 0.75 kWh * 720 hrs (30 days) * 0.14475 CAD/kWh = 78.165 CAD
  • f(0.75 kWh * 720 hrs) = 33.32 CAD

Giving me a total of 111.48 CADs. This means I am profitable!

If I am producing 4 ETH monthly, 111.48 CAD / 4 ETH = 27.8714061 CAD/ETH is the minimum price the Ethereum must have to mine. I think I forgot to apply the HST and the Ontario Rebate, which it is 5%. So, applying this 5% the magic number is 29.2649764 CAD / ETH (21.33 USD / ETH approx as for May 3rd). So if the Ethereum is below this price, I rather turn off my rig.

UPDATE 1: Since May 2017 (approximately), Ethereum had a major difficulty adjustment. I stopped doing 1 ETH each week, instead, it was 1 ETH every two months. Anyway, I continued the mining, ETH price was going north.

UPDATE 2: Since September 2017 I stopped the ETH meaning. I switched to ETC, which I am doing 1 ETC every 5 days with the same hardware. 1 ETC worths from 11 USD to 17 USD.

Good luck!

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