A common believe amongst the crypto community is that mining cant be profitable because the difficulty will rise so fast that you will never reach ROI. As this may be true for ASIC mining, it is certainly not true for GPU mining.
The advantage of GPU mining is that you have a long list of coins that can be mined, their difficulty will vary depending on the market conditions. For example, you can switch your mining operation amongst these 4 coins and always mine the lowest difficulty coin:
- Ethereum
- Zcash
- Ethereum Classic
- ZenCash
You also have to take into consideration which coin you think will rise in value, for instance if you were mining Zencash this year, you would have received good profits when the coin tripled in price recently. This pump was so high that most ZenCash miners reached ROI way before expected (Ninja ROI).
Difficulty and Price Relation
Another interesting fact is that difficulty is not always 100% related to price. Sometimes price will jump so fast that it will take some time for difficulty to catch up, other times the price drop will be subtle but the difficulty drop will be steep, thus making the coin attractive for miners.
Let’s look at the example of Ethereum Classic this past month (October 2017). The price has dropped from $12.80 to $10.87, that is a 15% decrease, most buyers must be kicking themselves right now as they have experienced quite a big loss in a month. However, miners can contain their losses in October as they are now able to mine 29% more, as difficulty has dropped way more than the price of ETC.
So if you have been wondering whether to mine or not but are too afraid of the Difficulty Monster, don’t be, mining can be profitable and is a good way to hedge your crypto investments.